2023-002 - Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures (Significant Deficiency) Information on the Federal Program(s): Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 B-20-MW-06-0554 Assistance Listing Number: 14.871 Federal Program Name: Housing Voucher Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: CA120 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records; • Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); • Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: Community Development Block Grants-Entitlement Grants Cluster We determined the City did not comply with federal requirements for direct payroll charges. Payroll costs for all eight employees tested were allocated to programs based on percentages provided by management. These allocations were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Employee timesheets did not record the actual labor efforts expended on these grants. In April 2023, the City has required all Housing Department staff to retrospectively fill out timesheets pertaining to actual hours worked on the program during fiscal year 2023, The City performed reconciliation on Housing Department staff payroll charges to reflect actual hours worked. However, for the admin supporting staff did not use the same method due to the low percentage of the payroll charges to the grant. Housing Voucher Cluster We determined the City did not comply with federal requirements for direct payroll charges. Payroll costs for all five employees tested were allocated to programs based on percentages provided by management. These allocations were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Employee timesheets did not record the actual labor efforts expended on these grants. In April 2023, the City has required all Housing Department staff to retrospectively fill out timesheets pertaining to actual hours worked on the program during fiscal year 2023, The City performed reconciliation on Housing Department staff payroll charges to reflect actual hours worked. However, for the admin supporting staff did not use the same method due to the low percentage of the payroll charges to the grant. Cause: The City did not follow its adopted policies and procedures for ensuring employees’ compensation charged to federal programs was supported by contemporaneous time record or an after-the-fact distribution of employees’ actual time and effort expended on federal program activities. The City’s attempt in addressing prior year finding was not deemed sufficient due to lack of reconciliation for actual hours worked for payroll charges from Administrative, Finance, and Other Departments. Effect or Potential Effect: The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities. Questioned Costs: Community Development Block Grants-Entitlement Grants Cluster $41,821 Housing Voucher Cluster $15,986 Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-003. Recommendation: We recommend the City comply with federal regulation requiring that any employee funded by federal grant document the actual time they spend working on the grant’s objectives. Documentation must reflect “actual” time spent by employees on awards being charged. The City should develop and implement policies and procedures that ensure that employees’ compensation charged to federal programs reflect a contemporaneous or after-the-fact distribution of employees’ actual time and effort expended on federal programs. We also recommend the City enhance its internal controls over the payroll processes. Views of Responsible Officials: Management concurs the finding.
2023-002 - Allowable Costs/Cost Principles – Internal Control and Compliance over Payroll Expenditures (Significant Deficiency) Information on the Federal Program(s): Assistance Listing Number: 14.218 Federal Program Name: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: B-21-MC-06-0554 B-20-MW-06-0554 Assistance Listing Number: 14.871 Federal Program Name: Housing Voucher Cluster Federal Agency: Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Number(s) and Award Year: CA120 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records; • Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort); • Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.); and Utilize an "after-the-fact" review of the employee’s actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Condition: Community Development Block Grants-Entitlement Grants Cluster We determined the City did not comply with federal requirements for direct payroll charges. Payroll costs for all eight employees tested were allocated to programs based on percentages provided by management. These allocations were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Employee timesheets did not record the actual labor efforts expended on these grants. In April 2023, the City has required all Housing Department staff to retrospectively fill out timesheets pertaining to actual hours worked on the program during fiscal year 2023, The City performed reconciliation on Housing Department staff payroll charges to reflect actual hours worked. However, for the admin supporting staff did not use the same method due to the low percentage of the payroll charges to the grant. Housing Voucher Cluster We determined the City did not comply with federal requirements for direct payroll charges. Payroll costs for all five employees tested were allocated to programs based on percentages provided by management. These allocations were not supported by approved time samples or updated cost allocation methods/plan, nor were they reconciled to actual time spent on the various programs. Employee timesheets did not record the actual labor efforts expended on these grants. In April 2023, the City has required all Housing Department staff to retrospectively fill out timesheets pertaining to actual hours worked on the program during fiscal year 2023, The City performed reconciliation on Housing Department staff payroll charges to reflect actual hours worked. However, for the admin supporting staff did not use the same method due to the low percentage of the payroll charges to the grant. Cause: The City did not follow its adopted policies and procedures for ensuring employees’ compensation charged to federal programs was supported by contemporaneous time record or an after-the-fact distribution of employees’ actual time and effort expended on federal program activities. The City’s attempt in addressing prior year finding was not deemed sufficient due to lack of reconciliation for actual hours worked for payroll charges from Administrative, Finance, and Other Departments. Effect or Potential Effect: The City did not comply with the program’s requirements for allowable costs. There is an increased risk that employees’ compensation charged to the program may not have represented an actual time and effort expended on the program’s activities. Questioned Costs: Community Development Block Grants-Entitlement Grants Cluster $41,821 Housing Voucher Cluster $15,986 Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Yes. See prior year finding 2022-003. Recommendation: We recommend the City comply with federal regulation requiring that any employee funded by federal grant document the actual time they spend working on the grant’s objectives. Documentation must reflect “actual” time spent by employees on awards being charged. The City should develop and implement policies and procedures that ensure that employees’ compensation charged to federal programs reflect a contemporaneous or after-the-fact distribution of employees’ actual time and effort expended on federal programs. We also recommend the City enhance its internal controls over the payroll processes. Views of Responsible Officials: Management concurs the finding.
2023-001 – Activities Allowed and Allowable Costs Federal Program Information: U. S. Department of Education Passed through the State of Vermont Agency of Education ALN: - 10.555 Child Nutrition Cluster Criteria: The following CFR applies to this finding: 2 CFR 200.303 & 2 CFR section 200.430(i) Condition: During audit procedures, it was identified that the District overpaid the employee for 4 charges under this program and charged work to the program that was not specific to food service. Cause: The District does not have the necessary internal controls over compliance. Effect: Insufficient controls could result in unallowable expenses being charged to the program and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: There were 75 payroll charges tested. It was found that the employee was not paid the correct rate on 4 charges tested, and there were 3 charges where an employee was charged to the program that did not work specifically for food service. This is not statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implements internal control processes and procedures to ensure that they are following the criteria above. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the Mount Mansfield Unified Union School District.
Reference Number: 2023-007 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Human Services Federal Program: Rehabilitation Services - Vocational Rehabilitation Grants to States Assistance Listing Number: 84.126 Award Number and Year: H126A230044 (10/1/2022-9/30/2023) H126A230044-A (10/1/2022-9/30/2023) H126A230044-B (10/1/2022-9/30/2023) H126A210043 (10/1/2020-9/30/2022) H126A220043-22C (10/1/2021-9/30/2022) H126A230043 (10/1/2022-9/30/2023) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) charged unallowable payroll costs to the program. Context: For one of forty samples selected for testing, the Department made an overpayment to an employee of $113.00 in salary and wages. Cause: Controls were not operating effectively to ensure that allowable payroll costs were charged to the program. A step increase was improperly applied to the employee which resulted in an overpayment of salary and wages. Effect: Unallowable employee salaries and wages were charged to the program. Questioned costs: $113.00, the amount of the overpayment. Recommendation: The Department should review procedures and controls to ensure that only allowable time and effort costs are charged to the program. Views of responsible officials: The Department of Human Services (DHS), Central Office Payroll group will run reports biweekly to determine if any employees are on a leave without pay status greater than 10 days. This added reporting function will ensure that all DHS employees who are on a leave of absence without pay beyond 10 days have their PMIS histories updated upon each extension and return to work.
Finding 2023-001 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material Weakness in Internal Control / Noncompliance Program: COVID 19 Education Stabilization Fund (ALN 84.425D – ESSER II Formula, ESSER II Section 98c Learning Loss, ALN 84.425U – ESSER III Formula) Condition: The District was unable to provide documentation that identified wages, by employee, that were charged to Education Stabilization Fund grants. Criteria: As detailed in 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must, “Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated.” Cause: Management failed to maintain adequate documentation of wages and related fringe benefit allocations. Effect: Approximately $1,340,000 of expenses charged to Education Stabilization Fund were not able to be tested/substantiated. Context: Wages and the related fringe benefits were allocated to Education Stabilization Fund grants through a series of journal entries rather than the typical process of allocating wages via the payroll system based on hours each employee spent in each function or cost center. Documentation of how the journal entries were prepared was not maintained. Consequently, wages and the related fringe benefits allocated via journal entries could not be reconciled to payroll records. Recommendation: We recommend that the District establish internal controls to ensure that appropriate support for journal entries is developed and maintained. Management’s Resp: We are in agreement with this finding.
Finding 2023-001 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material Weakness in Internal Control / Noncompliance Program: COVID 19 Education Stabilization Fund (ALN 84.425D – ESSER II Formula, ESSER II Section 98c Learning Loss, ALN 84.425U – ESSER III Formula) Condition: The District was unable to provide documentation that identified wages, by employee, that were charged to Education Stabilization Fund grants. Criteria: As detailed in 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must, “Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated.” Cause: Management failed to maintain adequate documentation of wages and related fringe benefit allocations. Effect: Approximately $1,340,000 of expenses charged to Education Stabilization Fund were not able to be tested/substantiated. Context: Wages and the related fringe benefits were allocated to Education Stabilization Fund grants through a series of journal entries rather than the typical process of allocating wages via the payroll system based on hours each employee spent in each function or cost center. Documentation of how the journal entries were prepared was not maintained. Consequently, wages and the related fringe benefits allocated via journal entries could not be reconciled to payroll records. Recommendation: We recommend that the District establish internal controls to ensure that appropriate support for journal entries is developed and maintained. Management’s Resp: We are in agreement with this finding.
Finding 2023-001 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material Weakness in Internal Control / Noncompliance Program: COVID 19 Education Stabilization Fund (ALN 84.425D – ESSER II Formula, ESSER II Section 98c Learning Loss, ALN 84.425U – ESSER III Formula) Condition: The District was unable to provide documentation that identified wages, by employee, that were charged to Education Stabilization Fund grants. Criteria: As detailed in 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must, “Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated.” Cause: Management failed to maintain adequate documentation of wages and related fringe benefit allocations. Effect: Approximately $1,340,000 of expenses charged to Education Stabilization Fund were not able to be tested/substantiated. Context: Wages and the related fringe benefits were allocated to Education Stabilization Fund grants through a series of journal entries rather than the typical process of allocating wages via the payroll system based on hours each employee spent in each function or cost center. Documentation of how the journal entries were prepared was not maintained. Consequently, wages and the related fringe benefits allocated via journal entries could not be reconciled to payroll records. Recommendation: We recommend that the District establish internal controls to ensure that appropriate support for journal entries is developed and maintained. Management’s Resp: We are in agreement with this finding.
Criteria:The accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different bases; or an unallowable activity and a direct cost activity. Budget estimates (i.e. estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The system for establishing the estimates produces reasonable approximations of the activity actually performed; Significant changes in the corresponding work activity are identified and entered into the records in a timely manner. Condition: Salaries charged to the federal award were not supported by distribution schedule identifying the percentage of time each employee was working on the Federal award objective. Cause: The City charged salary expenditures to the grant baased upon percentages used in the grant application. Effect: The City was unable to provide supporting documentation that the costs charged to the grant were allowable. Questioned Costs: $697,935 Context/Sampling: The internal control and compliance testing performed included all salaries charged to the grant. Out of the items tested none of the salaries charged were supported by documentation supporting the allocation charged to the federal award. Prior Year: None Recommendation: We recommend the City review its policies and procedures related to the internal controls over payroll expenditures related to grants and implement a time system to capture appropriate salaries to be charged to the grant. Client Response: The City recognizes the importance of internal controls and plans to enhance procedures to ensure payroll expenditures related to grants are properly captured, documented and charged to the grant. Covid interruptions with related illnesses, early retirements and hiring difficulties all contributed to a negative impact on productivity.
Criteria:The accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different bases; or an unallowable activity and a direct cost activity. Budget estimates (i.e. estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The system for establishing the estimates produces reasonable approximations of the activity actually performed; Significant changes in the corresponding work activity are identified and entered into the records in a timely manner. Condition: Salaries charged to the federal award were not supported by distribution schedule identifying the percentage of time each employee was working on the Federal award objective. Cause: The City charged salary expenditures to the grant baased upon percentages used in the grant application. Effect: The City was unable to provide supporting documentation that the costs charged to the grant were allowable. Questioned Costs: $697,935 Context/Sampling: The internal control and compliance testing performed included all salaries charged to the grant. Out of the items tested none of the salaries charged were supported by documentation supporting the allocation charged to the federal award. Prior Year: None Recommendation: We recommend the City review its policies and procedures related to the internal controls over payroll expenditures related to grants and implement a time system to capture appropriate salaries to be charged to the grant. Client Response: The City recognizes the importance of internal controls and plans to enhance procedures to ensure payroll expenditures related to grants are properly captured, documented and charged to the grant. Covid interruptions with related illnesses, early retirements and hiring difficulties all contributed to a negative impact on productivity.
Condition Two employees were paid wages for activities coded to special education: For one of the two special education employees tested, Ha:San prepared an employment contract, however, they were not signed by the employee or a school administrator. For the other employee tested, Ha:San could not provide evidence it prepared or retained an employment contract to support the employee designation to provide special education services. For all seven timecards tested for both employees the timecards did not contain a signature from either the employee or a School administrator. Criteria Accounting best practices specifies that supporting documentation should be prepared and retained to support all transactions. The Internal Revenue Service explains "An exempt organization must keep books and records needed to show that it complies with the tax rules. The organization must be able to document the sources of receipts and expenditures reported on its annual return and on any tax returns it must file. Records must support income, expenses, and credits reported on exempt organization annual returns and tax returns." Uniform Guidance §200.333 Retention requirements for records states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report..."must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. 2 CFR 200.430(i)(1)(vii) states: "Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are located using different allocation bases; or an unallowable activity and a direct or indirect cost activity." Cause There was a period of significant turnover in the administrative office for the past year. During the transition, existing controls were not followed to ensure complete documentation was retained. Effect Financial information Ha:San uses to make decisions and reports provided to the state of Arizona for oversight could have been materially misstated throughout the fiscal year. Further, Ha:San could end up being in noncompliance with federal and state laws. Recommendation Ha:San should procure a consultant or modify the organizational chart of the finance office to ensure individuals with the skills, knowledge and expertise prepare, review and retain required source documentation.
Crime Victim Assistance U.S. Department of Justice Passed through California Office of Emergency Services Federal Catalog Number 16.575 Federal Award Identification Number DV 20 34 1248 (October 1, 2021 - September 30, 2022) Federal Award Identification Number DV 22 36 1248 (October 1, 2022 - September 30, 2023) Federal Award Identification Number AT 21 02 1248 (January 1, 2023 - December 31, 2023) Federal Award Identification Number RC 21 30 1248 (October 1, 2021 - September 30, 2022) Federal Award Identification Number RC 22 31 1248 (October 1, 2022 - September 30, 2023) Federal Award Identification Number XL 22 05 1248 (January 1, 2023 - December 31, 2023) Criteria Title _2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance). The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and numerous federal guidelines require the establishment and maintenance of internal control designed to reasonably ensure accurate financial reporting and compliance with laws, regulations and program requirements. The Organization is required to be in compliance with the criteria contained in 2 CFR Part 200.430(i)(1 )(viii), which require documentation of personnel expenses "support the distribution of the employees' salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an allowable activity and a direct or indirect cost activity." Condition The documentation supporting the allocation of employee's wages among multiple projects did not agree to amounts recorded required by 2 CFR Part 200.430(i)(1 )(vii). Questioned Costs Not applicable. Proper Perspective Out of the twenty-eight payroll cash disbursements tested, thirteen exceptions were noted. The total sample population was 1,427 items. Therefore, likely exceptions were 663 items. Our sample was a statistically valid sample. The issue is systemic to the Organization's payroll process. Effect The Organization is out of compliance with Uniform Guidance requirements for Allowable Costs/Cost Principles. Cause The Organization's internal control process over charging personnel cost based on the labor distribution report, which is supported by timesheets of actual time worked on multiple federal awards, was not consistently followed. Recommendation We recommend the Organization ensure the final wages, including paid time off, charged for each pay period agree to the supporting documentation for the actual allocation percentage based the actual hours worked to ensure the amount charged to each project is accurate, allowable and properly allocated following the requirements of 2 CFR Part 200.430(i)(1 )(vii) .
Crime Victim Assistance U.S. Department of Justice Passed through California Office of Emergency Services Federal Catalog Number 16.575 Federal Award Identification Number XC 22 05 1248 (January 1, 2023 - December 31, 2023) Federal Award Identification Number RC 22 31 1248 (October 1, 2022 - September 30, 2023) Federal Award Identification Number XL 21 04 1248 (January 1, 2022 - December 31, 2022) Federal Award Identification Number SP 22 05 1248 (May 1, 2023 - April 30, 2024) Federal Award Identification Number XH 21 04 1248 (January 1, 2022 - December 31, 2022) Criteria Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), The Internal Control - Integrated Framework, published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) and numerous federal guidelines require the establishment and maintenance of internal control designed to reasonable ensure accurate financial reporting and compliance with laws, regulations and program requirements. The Organization is required to be in compliance with the criteria contained in 2 CFR Part 200. 430(i)(1 )(viii). Which require documentation of personnel expenses based on: "Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes provided that: A. The system for establishing the estimates produces reasonable approximations of the activity actually performed; B. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and C. The non-Federal entity's system of internal controls includes processes to review after-the- fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated." Condition The budgeted allocation of salaried employees' wages among multiple projects were not reviewed and adjusted after-the-fact as required by 2 CFR Section 200.403(i)(1 )(viii). Questioned Costs The known questioned costs were $1,427 of personnel costs charges to federal program. Proper Perspective Twenty-eight payroll cash disbursements were tested totaling $25,645. The total sample population was $1,221,287. Therefore, likely questioned costs are $36,471. Our sample was a statistically valid sample. The issue is systematic to the organization's salaried employee payroll process. Effect The Organization is out of compliance with Uniform Guidance requirements for Allowable Costs/Cost Principle. Cause The Organization's internal control process over charging salaried personnel cost based on the labor distribution report, does not include an after-the-fact review and adjustment based on actual time worked. Recommendation We recommend that the Organization have support for the distribution of the employees' wages among each project. If budget or estimates are used for allocations among projects, we recommend an after- the-fact review is done and the necessary adjustments are made to the final amount charged for that period to ensure the amount charges to the project is accurate, allowable and properly allocated following the requirements of 2 CFR Section 200.430(i)(1 )(viii).
Criteria: According to 2 CFR section 200.430.(i) the Supervisory Union must maintain the records it generally maintains for expenditures. Condition: The Supervisory Union expended funds from the ESSER II grant to pay expenditures. In our sample of expenditure disbursements, we found an instance where we were unable to verify supporting approval of a disbursement. Context: The audit identified disbursements that were not supported by documentation and approval. Effect: If disbursements are not supported by documentation and approval, they may not be properly safeguarded, and the Supervisory Union may not comply with the federal allowable costs rules. Cause: Unknown. Recommendation: We recommend that the Supervisory Union develop a system to make sure that proper approved invoices are obtained in a timely manner.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
2023-003 Allowable Costs: Payroll Costs Federal Agency: U.S. Department of Education Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV) Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424 Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025 Pass-Through Agency: Maryland State Department of Education Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253 Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025 Type of Finding: Material Non-Compliance, Material Weakness in Internal Control Criteria or specific requirement: Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: • The consolidated cost objective, and • Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following: 1. Employee’s time and effort documentation was not provided. 2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant. 3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant. Questioned costs: Time and effort documentation did not support the employee’s payroll costs charged to the grant. CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07 ESF: a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant Context: Time and effort did not support payroll costs charged to the grant: c. CSLFRF 8 out of 60 transactions tested d. ESF: 3 out of 60 transactions tested e. Title IV: 12 out of 40 transactions tested ESF: f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided. g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit. Effect: City Schools is unable to support payroll costs charged to the grant. Repeat Finding: No Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2023-033 (other noncompliance / significant deficiency – repeat finding – 2022-059) WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN – 10.557 Federal Awarding Agency: U.S. Department of Agriculture (USDA), Food and Nutrition Service Federal Award Fiscal Years: 2022 and 2023 Federal Award Numbers: 224RI705W1003, 224RI705W1006, 234RI705W1003, 234RI705W1006 Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019-2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirements: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH can enhance controls over time and effort reporting to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built a robust, yet complex, time reporting worksheets for employees to allocate their time spent on various activities during the week. Reconciliation of the hours worked versus the hours charged to the State’s payroll system and accounting system is performed on a quarterly basis. Amounts recorded are adjusted accordingly to ensure charges in the accounting system are consistent with actual time charged to various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(i)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following deficiencies that weaken controls over the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. While RIDOH was able to provide timesheets for all selected pay periods, for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 6 of the 80 selected weekly timesheets lacked a supervisor signature. This was considered a control deficiency, but not noncompliance since the employee reported time and effort which supported allocation to the ELC program. • One individual noted in our ELC payroll sample (4 weekly time sheets) did not have their recorded payroll adjusted through the subsequent quarterly entry to accurately reflect work performed on federal programs. This resulted in payroll costs being overallocated to the ELC program (questioned costs - $3,355). • For both ELC and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), we noted time and effort recorded to generalized timesheet category codes (i.e., Administrative Support, Finance and Operations, ICS – Incident Command System) lacked sufficient detail (i.e., underlying activity performed in support of related category code) to support its specific federal program allocation. Questioned costs could not be determined due to the lack of time and effort detail reported. Cause: Policies and procedures were ineffective to ensure amounts claimed and reimbursed by federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet detail prevented direct verification of recorded timesheet activities to the underlying charges on federal programs. Effect: Personnel costs reimbursed from federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $3,355 (ELC – 93.323) Valid Statistical Sampling: Yes RECOMMENDATION 2023-033 Enhance weekly reporting of time and effort to improve documentation and support for personnel costs charged to federal programs. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-039 (other noncompliance / significant deficiency – new finding) CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS – 21.027 Federal Awarding Agency: U.S. Department of The Treasury (TREAS) Federal Award Fiscal Years: 2021 to 2025 Federal Award Number: SLFRP0136 Administered by: Rhode Island Department of Administration, Pandemic Recovery Office (PRO) Compliance Requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles TIME AND EFFORT REPORTING The Pandemic Recovery Office’s time and effort reporting for the State Fiscal Recovery Fund (SFRF) did not provide adequate detail to fully support certain personnel costs charged to the program. Background: PRO instituted time reporting worksheets for employees to allocate their time spent on SFRF-related activities during the week. On a weekly basis, the agency compares its “Master Timesheet” to each employee’s timesheet for the purpose of recording an adjusting journal entry. This entry is recorded to adjust payroll expenditures in accordance with actual time spent on program activities. Criteria: 2 CFR §200.430(i)(1) requires that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of payroll costs identified the following deficiencies that weaken controls over the allowability of personnel expenditures: • During the examination of payroll allocations charged to the program, we identified that one employee’s payroll costs continued to be charged in full to SFRF for 5 pay periods subsequent to their departure from the PRO. PRO did not identify and adjust for this exception during fiscal 2023 (questioned costs - $34,533). • PRO maintains a Master Timesheet for all its employees and asserts that only individuals listed on the Master Timesheet are eligible to submit payroll charges against SFRF. We noted one employee charged to the program for whom, upon review of the employee time records, no work hours under the SFRF program were reported. While it was explained that this employee was partially dedicated to performing SFRF activities within the Division of Purchasing, no time sheet documentation was provided in support of SFRF activities (questioned costs - $13,132). • During the review of timesheets for PRO supervisory approval, it was noted that several employee timesheets received approval from their supervisors one, two, and in some instances, three days prior to the conclusion of the pay period. This observation raises concerns regarding the timeliness and accuracy of time reporting, potentially impacting the integrity of payroll processing and adherence to internal controls over timekeeping procedures. According to the PRO, this is due to the Department of Administration’s routine request for submission of timesheets prior to the end of the period. If PRO identifies an instance that requires an amendment to the original timesheet, an amended timesheet will be submitted subsequently. Cause: Insufficient controls over the claiming of personnel expenditures to ensure adequate controls are in place to ensure compliance with federal requirements (i.e., adequate documentation of time and effort). Effect: Personnel expenditures could be unallowable due to a lack of adequate support and/or inaccurate allocation of expenditures to the SFRF program. Questioned Costs: $47,655 Valid Statistical Sampling: Yes RECOMMENDATIONS 2023-039a Conduct regular reconciliation and monitoring of payroll charges to agency records to improve documentation and support for personnel costs charged to federal programs. 2023-039b Modify current policies relating to timesheet collection to ensure that supervisory reviews of time and effort reporting are accurate and complete. Auditee views: The auditee partially disagrees with this finding – see Corrective Action Plan in Section E.
Finding 2023-033 (other noncompliance / significant deficiency – repeat finding – 2022-059) WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN – 10.557 Federal Awarding Agency: U.S. Department of Agriculture (USDA), Food and Nutrition Service Federal Award Fiscal Years: 2022 and 2023 Federal Award Numbers: 224RI705W1003, 224RI705W1006, 234RI705W1003, 234RI705W1006 Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019-2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirements: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH can enhance controls over time and effort reporting to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built a robust, yet complex, time reporting worksheets for employees to allocate their time spent on various activities during the week. Reconciliation of the hours worked versus the hours charged to the State’s payroll system and accounting system is performed on a quarterly basis. Amounts recorded are adjusted accordingly to ensure charges in the accounting system are consistent with actual time charged to various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(i)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following deficiencies that weaken controls over the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. While RIDOH was able to provide timesheets for all selected pay periods, for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 6 of the 80 selected weekly timesheets lacked a supervisor signature. This was considered a control deficiency, but not noncompliance since the employee reported time and effort which supported allocation to the ELC program. • One individual noted in our ELC payroll sample (4 weekly time sheets) did not have their recorded payroll adjusted through the subsequent quarterly entry to accurately reflect work performed on federal programs. This resulted in payroll costs being overallocated to the ELC program (questioned costs - $3,355). • For both ELC and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), we noted time and effort recorded to generalized timesheet category codes (i.e., Administrative Support, Finance and Operations, ICS – Incident Command System) lacked sufficient detail (i.e., underlying activity performed in support of related category code) to support its specific federal program allocation. Questioned costs could not be determined due to the lack of time and effort detail reported. Cause: Policies and procedures were ineffective to ensure amounts claimed and reimbursed by federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet detail prevented direct verification of recorded timesheet activities to the underlying charges on federal programs. Effect: Personnel costs reimbursed from federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $3,355 (ELC – 93.323) Valid Statistical Sampling: Yes RECOMMENDATION 2023-033 Enhance weekly reporting of time and effort to improve documentation and support for personnel costs charged to federal programs. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Finding 2023-033 (other noncompliance / significant deficiency – repeat finding – 2022-059) WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN – 10.557 Federal Awarding Agency: U.S. Department of Agriculture (USDA), Food and Nutrition Service Federal Award Fiscal Years: 2022 and 2023 Federal Award Numbers: 224RI705W1003, 224RI705W1006, 234RI705W1003, 234RI705W1006 Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019-2024 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirements: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH can enhance controls over time and effort reporting to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built a robust, yet complex, time reporting worksheets for employees to allocate their time spent on various activities during the week. Reconciliation of the hours worked versus the hours charged to the State’s payroll system and accounting system is performed on a quarterly basis. Amounts recorded are adjusted accordingly to ensure charges in the accounting system are consistent with actual time charged to various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(i)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following deficiencies that weaken controls over the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. While RIDOH was able to provide timesheets for all selected pay periods, for the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 6 of the 80 selected weekly timesheets lacked a supervisor signature. This was considered a control deficiency, but not noncompliance since the employee reported time and effort which supported allocation to the ELC program. • One individual noted in our ELC payroll sample (4 weekly time sheets) did not have their recorded payroll adjusted through the subsequent quarterly entry to accurately reflect work performed on federal programs. This resulted in payroll costs being overallocated to the ELC program (questioned costs - $3,355). • For both ELC and the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), we noted time and effort recorded to generalized timesheet category codes (i.e., Administrative Support, Finance and Operations, ICS – Incident Command System) lacked sufficient detail (i.e., underlying activity performed in support of related category code) to support its specific federal program allocation. Questioned costs could not be determined due to the lack of time and effort detail reported. Cause: Policies and procedures were ineffective to ensure amounts claimed and reimbursed by federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet detail prevented direct verification of recorded timesheet activities to the underlying charges on federal programs. Effect: Personnel costs reimbursed from federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $3,355 (ELC – 93.323) Valid Statistical Sampling: Yes RECOMMENDATION 2023-033 Enhance weekly reporting of time and effort to improve documentation and support for personnel costs charged to federal programs. Auditee views: The auditee concurs with this finding – see Corrective Action Plan in Section E.
Reference Number: 2023-007 Prior Year Finding: No Federal Agency: U.S. Department of Education State Agency: Department of Human Services Federal Program: Rehabilitation Services - Vocational Rehabilitation Grants to States Assistance Listing Number: 84.126 Award Number and Year: H126A230044 (10/1/2022-9/30/2023) H126A230044-A (10/1/2022-9/30/2023) H126A230044-B (10/1/2022-9/30/2023) H126A210043 (10/1/2020-9/30/2022) H126A220043-22C (10/1/2021-9/30/2022) H126A230043 (10/1/2022-9/30/2023) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance – Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Section III – Federal Award Findings and Questioned Costs (Continued) Control – Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with the guidance in "Standards for Internal Control in the Federal Government" issued by the Comptroller General of the United States or the "Internal Control-Integrated Framework," issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Department of Human Services (Department) charged unallowable payroll costs to the program. Context: For one of forty samples selected for testing, the Department made an overpayment to an employee of $113.00 in salary and wages. Cause: Controls were not operating effectively to ensure that allowable payroll costs were charged to the program. A step increase was improperly applied to the employee which resulted in an overpayment of salary and wages. Effect: Unallowable employee salaries and wages were charged to the program. Questioned costs: $113.00, the amount of the overpayment. Recommendation: The Department should review procedures and controls to ensure that only allowable time and effort costs are charged to the program. Views of responsible officials: The Department of Human Services (DHS), Central Office Payroll group will run reports biweekly to determine if any employees are on a leave without pay status greater than 10 days. This added reporting function will ensure that all DHS employees who are on a leave of absence without pay beyond 10 days have their PMIS histories updated upon each extension and return to work.
Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: be prepared at least semiannually. Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: We identified 15 employees whose salaries were charged to Education Stabilization Funds but the District was unable to provide time accounting documentation for the 2022-23 fiscal year. Context: Exceptions were discovered in all 15 employees sampled. Questioned Costs: Total questioned cost for the 15 employees is $66,793. Cause: The District does not have adequate controls in place to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: District may be overcharging the Education Stabilization funds for time which isn’t spent directly working on the program. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: Starting April 1, 2024, Keppel Union School District will require all employees funded by more than one resource to fill out a PAR Form. The District will require those funded by one restricted resource to be covered by a blanket semi-annual PAR Form.
Criteria According to Section 2 CFR Part 200.430 (i) Standard for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a federal award, and a non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition Controls were inadequate to ensure the Organization maintains timekeeping documentation by grant. Context During the testing of the allowability of expenses, we discovered personnel expenses were charged to the incorrect grant cost center. Management allocates actual personnel expenses based on the grant budgeted amount instead of actual hours worked by the grant area. Management does not require personnel to track actual time spent by the grant. Cause and Effect The Organization did not fully follow the guidance detailed in Section 2 CFR Part 200.430 to ensure that payroll expense allocations are based on actual time spent instead of grant budgeted amounts.
Condition: There was an individual who had formerly worked for the Foundation in the previous fiscal year that was an employee of one of the Foundation’s partner agencies during the year under audit. This individual was compensated $20,000 through the Foundation’s payroll system during the year ended June 30, 2023, although she was no longer an employee of the Foundation. This payment was supported by an invoice from the former employee for hours worked between July and October of 2022 at her new employer related to this major program. There was no documented approval by the partner agency. This payment was charged as salaries to the major program. In addition, there was only one employee (program manager) who charged time to the major program, except as noted in the preceding paragraph. There was no authorized rate of pay on file for this employee. Criteria: In accordance with 2 CFR 200.430(i), payroll costs charged to federal awards must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA), charges for the salaries and wages of nonexempt employees must also be supported by records indicating the total number of hours worked each day. Cause and effect: Management believed the individual was undercompensated by her current employer, who is a subcontractor of the Foundation, for time spent on the major program. This additional payment was reported to the State of Arizona by management when paid. Recommendation: I recommend that an authorized rate of pay be included in all employees’ human resources files. Any independent contractors should be compensated as such, based on approved contracts, and charged to federal grants accordingly. Views of Responsible Officials: The Foundation confirms all employees have rate of pay documentation in their employee files. The Foundation is developing and will implement stronger policies around contractors engaged with the organization with oversight to contractors pay provided by the staffed CEO.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.
Lack of Time and Effort Documentation for Personnel Costs Condition: During the audit period, it was discovered that the School Department did not maintain appropriate time and effort documentation for employees whose salaries are charged, in whole or in part, to federal awards. Criteria: According to Uniform Guidance (2 CFR 200.430(i)), for salaries and wages to be charged to federal awards, records must accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The City did not follow their established internal control system that requires time and effort reports or equivalent documentation to be completed and maintained for employees engaged in federally funded activities. Effect: The lack of proper time and effort documentation raises the risk of misstating salary expenses charged to federal programs and may result in questioned costs due to noncompliance with federal regulations. Questioned Costs: Total payroll costs charged to the grants in 2023 was as follows: Recommendation: The City should follow their written policies and procedures outlining the time and effort reporting and documentation requirements. Management should ensure the standardized forms are approved by the individual in charge of the grant and overseen by grant management personnel. This will ensure compliance is not impacted by employee turnover in the future. Additionally, training should be provided to ensure that all personnel are aware of documentation requirements. Views of Responsible Officials and Planned Corrective Actions: Please see submitted corrective action plan for views of responsible officials and planned corrective actions.