2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
2023-003 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Identification of the Federal Program: Assistance Listing Number: 14.231 Assistance Listing Title: Emergency Solutions Grant Program Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: E-20-MW-06-0026, E-21-MC-06-0026, E-22-MC-06-0026 Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grants-Entitlement Grants Cluster Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Entity: N/A Federal Award Identification Number: B-20-MW-06-0026, B-21-MC-06-0026, B-22-MC-06-0026, B-23-MC-06-0026 Program Income 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: Emergency Solutions Grant Program The City was unable to locate and provide the timesheets for (2) out of eleven (11) samples tested with Payroll Cost allocated to the Program. Within the overall population of a hundred and five (105) lines of ESG and ESGCV payroll charges, the City also had four (4) unsupported employee benefits charged to the program has benefit charged to program. Community Development Block Grants-Entitlement Grants Cluster Payroll costs for eighteen (18) out of forty (40) samples tested were allocated to programs 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. Cause: The City did not adhere to its established policies and procedures for verifying that employee compensation charged to federal programs was supported by contemporaneous time records or an after-the-fact distribution of actual time and effort spent on federal program activities. Additionally, a thorough review and reconciliation of payroll time entries and postings from the old financial system (HTE) to the new financial system (MUNIS) was not conducted, resulting in the failure to preserve supporting documentation, such as timesheets, during the transition process. 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: None. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommend that the City enhance its internal controls over payroll processes by implementing policies and procedures that ensure employee compensation charged to federal programs is supported by contemporaneous or after-the-fact documentation of actual time and effort spent on federal program activities. Additionally, all supporting documentation should be properly saved. Views of Responsible Officials: Management concurs with the finding.
Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Payroll Costs for one employee were charged to the UPK grant in excess of the employee’s wages for the year. Criteria: 2CFR Section 200.430 requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must also (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. Context: Our review of the payroll in the UPK grant found that one employee had payroll recorded to the grant that exceed their full payroll for the year. The employee was docked pay that was incorrectly charged to the General Fund creating a negative earning in the general Fund. Questioned Costs are $736. Cause: The employee was docked pay that was incorrectly charged to the General Fund creating a negative earning in the General Fund and an overstatement in the UPK Grant. Questioned Costs are $736. Effect: The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan on pages 12 – 13.
Finding number: 2023 006 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: 305 532937 2022 0035; 305 719222 2023 0035 Award year: September 1, 2021 to June 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: Yes; 2022 001 Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) 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. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards 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. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for our sample of 40 payroll transactions charged to the program, 23 transactions were not supported by a completed timesheet. Additionally, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor for 5 payroll transactions. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Additionally, BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 57% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $65,817, for unsupported payroll charges, were charged to ALN # 84.010, Award No. 305 532937 2022 0035 and Award No. 305 719222 2023 0035. Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) 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. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards 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. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding number: 2023 011 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: Special Education (IDEA) Cluster ALN #: 84.027; 84.173 Award number: 240 532934 2022 0035; 240 714716 2023 0035 Award year: August 23, 2021 to September 30, 2024 Finding: Internal Control over Payroll Costs and Period of Performance Prior Year Finding: No Type of Finding: Material Weakness Criteria Allowable Costs – Payroll In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) 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. Period of Performance A non federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass through entity made the federal award that were authorized by the federal awarding agency or pass through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. LEAs and SEAs must obligate funds during the 27 months, extending from July 1 of the fiscal year for which the funds were appropriated through September 30 of the second following fiscal year. This maximum period includes a 15 month period of initial availability plus a 12 month period for carryover. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards 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. Condition During our testing of allowable costs and period of performance associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, and that these timesheets are approved by the Department Head/Supervisor on a Department Time Summary Report (DTSR). However, for 39 of our sample of 40 payroll transactions charged to the program, we noted that the DTSR was either not located or not approved by the Department Head/Supervisor. Cause This appears to be due to the insufficient retention and documentation over the review and approval of payroll charges. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS re enforce its policies and procedures to ensure their review of payroll changes via signoff on the Department Time Summary is appropriately documented and records are retained. View of Responsible Officials from the Auditee BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed. Training was given in August 2024.
Finding number: 2023 013 Federal agency: U.S. Department of Education Pass through agency: Commonwealth Department of Elementary and Secondary Education Program: COVID 19 Education Stabilization Fund ALN #: 84.425D Award number: 119 532940 2022 0035 Award year: September 1, 2022 to June 30, 2024 Finding: Internal Control over Payroll Costs Prior Year Finding: No Type of Finding: Significant Deficiency Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) 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. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards 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. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed alongside the bi weekly Department Time Summary Reports (DTSRs) and approved by the Department Head, ensuring appropriate salary and wage distribution. However, for one of our sample of 40 payroll transactions charged to the program, we noted that although the respective DTSR was approved by the Department Head and the employee signed their timesheet, the employee selected was missing from the DTSR. Cause This appears to be due to the review of the DTSR not being precise enough to ensure all employees are included and appropriately charged to the program. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend that BPS enhance its policies and procedures to include a more detailed review of the Department Time Summary to ensure that all payroll costs charged to the federal program are reviewed and approved. View of Responsible Officials from the Auditee We had a system error for the employee when they changed from temporary to permanent status that led to their time not correctly showing up in the DTSR document. This problem should have been flagged earlier by their department timekeeper for correction. BPS has updated DTSR training and guidance for timekeepers to ensure that any similar technical issues are addressed quickly and manually adjusted if needed.
Finding number: 2023 014 Federal agency: U.S. Department of Homeland Security Pass through agency: N/A – Direct Funding Program: Staffing for Adequate Fire and Emergency Response ALN #: 97.083 Award number: EMW 2020 FF 00996 Award year: February 27, 2022 to February 26, 2025 Finding: Internal Control over Payroll Prior Year Finding: No Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages 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; (ii) Be incorporated into the official records of the non Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non Federal entity; and (vi) 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. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards 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. Condition During our testing of allowable costs associated with payroll charges, we noted the Boston Fire Department (BFD) provides a pay rate text file to the City of Boston Central Payroll Division to process stipend payments. The pay rate file is then uploaded into the City’s payroll system (HCM), which is used to process the fire fighter’s payroll. However, we noted there is no review process over the pay rate file to ensure accuracy of the rates. Cause This appears to be due to a lack of a formal control over the stipend pay rate process. Effect Insufficient review of payroll documentation increases the risk of inaccurate payroll costs being allocated to a grant award. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: None Recommendation We recommend BFD implement a formal process to ensure accuracy of stipend rates prior to upload into the City’s payroll system. View of Responsible Officials from the Auditee The City of Boston and The Boston Fire Department will implement additional internal controls over the review of pay rates. These additional internal controls will ensure that all pay rates are accurate and will include evidence of review and approval.
Finding 2023-001 – B. Allowable Costs Federal Agency: U.S. Department of Health and Human Services Passthrough Entity: N/A Assistance Listing Number and Federal Program: 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services Criteria: In accordance with 2 CFR part 200.302, the Association is required to maintain financial management systems to trace funds to expenditures to establish that funds have been used according to Federal statutes, regulations, and the terms and conditions of the Federal award. The financial management system must provide for records that identify adequately the source and application of funds for federally funded activities, among other conditions. The reporting of the federal expenditures should be supported by these records. Amounts may not be expended from project funds on an arbitrary basis. Additionally, in accordance with 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, among other things, should support the distribution of the employee’s salary or wages among specific activities if the employee works on a Federal award and non-Federal award. Budget estimates do not qualify as support for charges to Federal awards. Statement of Condition: During the course of our audit, supporting detail for expenses allocated and charged to the grant was not available and could not be determined. Salaries and benefits charged to the grant were based on estimates of employees’ expected workload and client needs, and not supported by records that accurately reflected the work performed on the Federal program. Additionally, the de minimis indirect cost rate was not correctly calculated and applied. The indirect cost charged to the grant was based on the indirect cost obligated by the Notice of Award rather than by calculating the indirect cost from the modified total direct cost base. Statement Cause: This is the second year the Association received this type of grant funding, coupled with significant growth experienced by the Association, the accounting system and staff were not yet prepared to effectively adhere to the requirements of the grant. Supporting documentation is not available for employees’ actual time spent and charged to the grants. Statement of Effect: Without proper accounting of expenditures and support of salaries and wages, grant expenditures can be over or understated on the drawdown requests. This could result in noncompliance with grant agreements which could lead to adverse conditions with the grantors. Questioned Costs: No questioned costs were identified. Identification of Repeat Findings: 2022-001 Recommendations: Project codes or classes should be created within the accounting system, if available. This will allow for expenses to be properly segregated by grant or other funding. When expenses are properly segregated, the indirect cost can be properly calculated using the correct direct cost base. The Association should also implement that all employees submit personnel activity reports to provide documentation of their time allocated to the grant. Views of Responsible Official(s): The Association is in agreement with the finding and is continuing to expand their knowledge on grant expenditures and compliance as it relates to the new financial management software to aid in tracking grants. See corrective action plan.
2023-002 – Allowable Activities/Cost Principles U.S. Department of Education Title I Grants to Local Education Agencies (AL # 84.010) Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Criteria: In accordance with 2 CFR section 200.430, the local education agency is required to maintain time and effort distribution records for employees who work on federal programs. These distribution records must support the portion of time and effort dedicated to: 1) The federal program or cost objective; and 2) Other programs or cost objectives supported by federal funds or other revenue sources. Statement of Condition: The District was not in compliance with the Uniform Guidance as it was noted that management of the District was not preparing time and effort distribution records and could not produce source documentation to support the time and effort applied to payroll expense that was charged to Title I Grants to Local Education Agencies. Cause: The District’s internal controls to identify and document employees that require support for time and effort charged to Title I Grants to Local Education Agencies were not effective for the year ended June 30, 2023. Context: We selected payroll costs associated with nine employees who had wages charged to Title I Grants to Local Education Agencies. Of the nine employees selected for testing, seven employees did not have time and effort documentation or other source documentation to support the payroll expense that was charged to the federal program. Effect or Potential Effect: Salary and wage costs could be applied to Title I Grants to Local Education Agencies without appropriate supporting documentation required in accordance with 2 CFR Part 200.430 and District Policy. Questioned Costs: $14,985 of known questioned costs charged to this federal program in the year under audit. Recommendations: We recommend the District review their internal controls to strengthen processes and improve procedures. We recommend the District complete all required time and effort certifications in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding and recommendation and plans to implement a system of completing necessary time and effort documentation for all employees who work on federal programs.
2023-002 – Allowable Activities/Cost Principles U.S. Department of Education Title I Grants to Local Education Agencies (AL # 84.010) Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Criteria: In accordance with 2 CFR section 200.430, the local education agency is required to maintain time and effort distribution records for employees who work on federal programs. These distribution records must support the portion of time and effort dedicated to: 1) The federal program or cost objective; and 2) Other programs or cost objectives supported by federal funds or other revenue sources. Statement of Condition: The District was not in compliance with the Uniform Guidance as it was noted that management of the District was not preparing time and effort distribution records and could not produce source documentation to support the time and effort applied to payroll expense that was charged to Title I Grants to Local Education Agencies. Cause: The District’s internal controls to identify and document employees that require support for time and effort charged to Title I Grants to Local Education Agencies were not effective for the year ended June 30, 2023. Context: We selected payroll costs associated with nine employees who had wages charged to Title I Grants to Local Education Agencies. Of the nine employees selected for testing, seven employees did not have time and effort documentation or other source documentation to support the payroll expense that was charged to the federal program. Effect or Potential Effect: Salary and wage costs could be applied to Title I Grants to Local Education Agencies without appropriate supporting documentation required in accordance with 2 CFR Part 200.430 and District Policy. Questioned Costs: $14,985 of known questioned costs charged to this federal program in the year under audit. Recommendations: We recommend the District review their internal controls to strengthen processes and improve procedures. We recommend the District complete all required time and effort certifications in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding and recommendation and plans to implement a system of completing necessary time and effort documentation for all employees who work on federal programs.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. In accordance with 2 CFR 200.430: (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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) 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. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. In accordance with 2 CFR 200.430: (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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) 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. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
United States Department of Treasury Federal Assistance Listing No. 21.027 American Rescue Plan Act (ARPA) Federal Assistance Listing No. 94.006 AmeriCorps State and National Material weakness over Activities Allowed or Unallowed and Allowable Costs/Cost Principle (Payroll) Repeat Finding: No Condition: For 25 out of 25 payroll selections, we did not receive support to test that payroll charges to the AmeriCorps and ARPA programs were for actual time and effort spent on the grant. Criteria: In accordance with 2 CFR 200.514: (c) Internal control. (1) The compliance supplement provides guidance on internal controls over Federal programs based upon the guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States and the Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). COSO requires entities to establish and maintain effective internal controls to achieve operational, reporting and compliance objectives. In accordance with 2 CFR 200.430: (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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) 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. Cause: BCI did not have proper controls in place to ensure that payroll activities charged were based on actual work performed on the grant. Effect: BCI is not in compliance with activities allowed and allowable costs (payroll) requirement for the ARPA program. Unallowed payroll costs could be charged to the grant. Questioned Costs: Unknown. Recommendation: We recommend that BCI establish written procedures related to federally funded payroll (partial and full) to ensure the charges are based on time and effort spent working on the grant and implement these procedures immediately. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the Corrective Action Plan. Auditor’s Conclusion: Finding remains as stated.
Review of Payroll Registers – Internal Controls over Allowable Costs and Activities and Period of Performance (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Treasury FALN: 21.027 Federal Award Identification Numbers: GA-0010655 Pass Through Entity: State of Georgia Award Year: 2021-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must provide reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: There is no documentation of payroll registers being reviewed for accuracy by management on a timely basis. Effect: Failure to review payroll registers for accuracy by management on a timely basis could result in intentional or unintentional material misstatements and an increased risk for inaccurate financial reporting. Cause: The review of the payroll registers was not properly documented due to several changes in personnel within management. Known Questioned Costs: None Perspective: This finding represents a systemic problem prior to 2023 when a new process was put into place to properly document the review. Repeat Finding: No Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure payroll registers are reviewed for accuracy by management on a timely basis and that the review be documented.
Documentation of Approved Pay Rates – Internal Controls over Allowable Costs and Activities (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Treasury FALN: 21.027 Federal Award Identification Numbers: GA-0010655 Pass Through Entity: State of Georgia Award Year: 2021-2023 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must provide reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: There is no documentation of approved pay rate. Effect: Failure to maintain documentation of approved pay rates could result in intentional or unintentional material misstatements and an increased risk for inaccurate financial reporting. Cause: The pay rate approval was not properly documented due to several changes in personnel within management. Repeat Finding: No Recommendation: We recommend that internal controls be strengthened and processes implemented to ensure all employee pay rates are documented and approved by management. Known Questioned Costs: $3,446 Likely Questioned Costs: $24,769
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, 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. These internal controls should be in compliance 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). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, 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. These internal controls should be in compliance 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). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, 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. These internal controls should be in compliance 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). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, 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. These internal controls should be in compliance 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). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, 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. These internal controls should be in compliance 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). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(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: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509 Federal Awarding Agency: U.S. Department of the Transportation Pass-Through Entity: New Mexico Department of Transportation Federal Award ID Number: N/A Federal Award Year: 2023 Condition - During reconciliation of the general ledger to SEFA, it was noted administrative percentages of payroll were included on reimbursement requests monthly that did not include supporting documentation on what the percentages were based on or support by the employee documenting the time spent on the grant. No documentation is maintained to support the process by which these estimates were produced, or the relationship to the activities actually performed. No analysis of actual activities versus budgeted activities is performed. There are no controls in place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the amounts charged. Criteria - Per 2 CFR 200.303(a), the 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 be in compliance 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (viii) 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 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. Cause - The County does not have policies and procedures in place to ensure the allowability of the percent allocations or retain detailed approved supporting documentation. Questioned Costs – Questioned and likely costs of $77,520 Effect - The County could spend federal award funding on time not spent on the grant which could lead to disallowed costs. Auditor’s Recommendation - The auditor recommends the County strengthen policies and procedures to ensure the charging of administrative costs for allowability is based off supported calculations or documented time spent to grant. Views of Responsible Officials and Planned Corrective Action - The County will create a documented process in the new policy and procedures manual for federal guidelines and charging of administrative costs for documented time spent on grants with supporting calculations will be documented for clarity and consistency. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date - No later than August 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509 Federal Awarding Agency: U.S. Department of the Transportation Pass-Through Entity: New Mexico Department of Transportation Federal Award ID Number: N/A Federal Award Year: 2023 Condition - During reconciliation of the general ledger to SEFA, it was noted administrative percentages of payroll were included on reimbursement requests monthly that did not include supporting documentation on what the percentages were based on or support by the employee documenting the time spent on the grant. No documentation is maintained to support the process by which these estimates were produced, or the relationship to the activities actually performed. No analysis of actual activities versus budgeted activities is performed. There are no controls in place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the amounts charged. Criteria - Per 2 CFR 200.303(a), the 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 be in compliance 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). Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (viii) 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 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. Cause - The County does not have policies and procedures in place to ensure the allowability of the percent allocations or retain detailed approved supporting documentation. Questioned Costs – Questioned and likely costs of $77,520 Effect - The County could spend federal award funding on time not spent on the grant which could lead to disallowed costs. Auditor’s Recommendation - The auditor recommends the County strengthen policies and procedures to ensure the charging of administrative costs for allowability is based off supported calculations or documented time spent to grant. Views of Responsible Officials and Planned Corrective Action - The County will create a documented process in the new policy and procedures manual for federal guidelines and charging of administrative costs for documented time spent on grants with supporting calculations will be documented for clarity and consistency. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date - No later than August 31, 2024.
Activities Allowed or Unallowed; Allowable Costs/Cost Principles Federal Award Identification Assistance Listing Program Title: Formula Grants for Rural Areas Assistance Listing Program Number: 20.509 Federal Award ID Number and Year: Various Federal Agency: U.S. Department of Transportation Pass-Through Entity: Nebraska Department of Transportation Criteria Standards for documentation of personnel expenses at 2 CFR 200.430(i)(1) require that charges to federal awards for salaries and wages 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 documented. - Reasonably reflect the total activity for which the employee is compensated. - 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. Standards for documentation of personnel expenses at 2 CFR 200.430(i)(3) require that in accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR 516), charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. The Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award (2 CFR 200.303). Condition The Organization lacked adequate documentation to support: - Hours worked by employees - Supervisory approval of time sheets - Approved rates of pay Repeat Finding Yes: 2022-005. Cause Procedures within the Organization were inadequate to ensure that personnel expenses were adequately documented. Effect or Potential Effect Increased potential for errors or misuse of funds. Questioned Costs Known $7,240 Statistical Sample No. Context Auditor haphazardly selected 60 payroll transactions covering the entire fiscal year for testing, however, auditor did not complete the testing of all 60 transactions due to the frequency of errors encountered. Of the nine transactions that were tested, there were errors regarding: - Lack of (approved) timesheets. - Personnel files lacking (approved) rates of pay. - Rates of pay documented in personnel files that did not match the actual rates of pay. - Timesheet hours that vary from the payroll summary. - A timesheet that was self-approved. Recommendation We recommend the Organization establish a system of internal control consisting of policies and procedures whereby payroll transactions and related documentation contain appropriate review and approval. Views of Responsible Officials See Corrective Action Plan, below.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
Federal agency: U.S. Department of Education Federal program title: Adult Education - Basic Grants to States Assistance Listing Number: 84.002 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education Pass-Through Number(s): Code 340 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Compliance Requirements: Activities Allowed or Unallowed and Allowable Cost/Cost Principles Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and Context: For all payroll charges selected for testing, the City could not provide records that accurately reflected the work performed. Questioned Costs: $1,047,536 Cause: Procedures to maintain records that accurately reflect the work performed for payroll charges to the grant need to be implemented and/or strengthened. Effect: Noncompliance with the federal program occurred and we could not determine the allowability of payroll charges to the grant. Repeat Finding: No Recommendation: We recommend procedures to maintain records that accurately reflect the work performed for payroll charges to the grant be implemented/strengthened. Views of Responsible Officials: Management agrees with the finding
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. 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 School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. 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 School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. 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 School Department.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Lack of Documentation to Support Distribution of Wages (Material Weakness) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: COVID-19 Education Stabilization Fund Assistance Listing Number(s): 84.425U Passed-through Identification: 20220338 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it states that charges to the federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 ward or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have documentation to support the distribution of the employee’s time spent on grant activities. Cause: Administrative oversight and lack of training of requirements. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $47,216 Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Finding #2023-003 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Cost Principles 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Lack of Supporting Documentation for Disbursements Criteria Costs charged to federal grants must meet the provisions of the standards for documentation of expenses contained in 2 CFR 200.430(i)(1) which requires that charges to federal awards for disbursements must be based on records that accurately reflect actual costs incurred. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. This would include supporting invoices to be maintained and reviewed prior to payment. Condition During the audit, it was identified that supporting invoices could not be provided for three nonpayroll related disbursements. The population sampled was all nonpayroll related disbursements. Total number of selections tested was sixty-five, which comprised 2% of the total population. Cause This significant deficiency may have resulted from inadequate procedures for the retention of supporting documentation or a lack of oversight and reconciliation processes in the disbursement cycle. The failure to accurately reconcile recorded amounts to the supporting invoices further indicates a breakdown in internal controls. Effects The absence of supporting invoices and discrepancies between recorded amounts and invoice amounts create a risk of unauthorized or unsupported disbursements. This weakens the Organization’s ability to demonstrate compliance with federal grant requirements and increases the likelihood of disallowed costs or questioned costs in future audits. Failure to adequately control disbursements may also expose the client to potential financial misstatements or fraud. Questions Costs In total, $141 of expenses could not be supported. Perspective This audit finding is systematic. Statistical Sample The sample was a statistically valid sample. Repeat Finding This audit finding is not a repeat finding. Recommendation We recommend that the Organization strengthen its internal control procedures to ensure that all disbursement transactions are properly supported by invoices or other appropriate documentation before they are recorded and paid. The client should implement a regular reconciliation process to ensure that recorded amounts agree with supporting documentation. Additionally, management should establish policies for the retention of documentation to ensure it is readily available for audit and compliance purposes. Views of Responsible Officials Management agrees with the finding. The Organization is in the process of updating its procedures to ensure that all disbursements are supported by invoices and that recorded amounts are regularly reconciled with supporting documentation. Additionally, the Organization will implement a formal policy for document retention to ensure audit readiness.
Finding #2023-003 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Cost Principles 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Lack of Supporting Documentation for Disbursements Criteria Costs charged to federal grants must meet the provisions of the standards for documentation of expenses contained in 2 CFR 200.430(i)(1) which requires that charges to federal awards for disbursements must be based on records that accurately reflect actual costs incurred. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. This would include supporting invoices to be maintained and reviewed prior to payment. Condition During the audit, it was identified that supporting invoices could not be provided for three nonpayroll related disbursements. The population sampled was all nonpayroll related disbursements. Total number of selections tested was sixty-five, which comprised 2% of the total population. Cause This significant deficiency may have resulted from inadequate procedures for the retention of supporting documentation or a lack of oversight and reconciliation processes in the disbursement cycle. The failure to accurately reconcile recorded amounts to the supporting invoices further indicates a breakdown in internal controls. Effects The absence of supporting invoices and discrepancies between recorded amounts and invoice amounts create a risk of unauthorized or unsupported disbursements. This weakens the Organization’s ability to demonstrate compliance with federal grant requirements and increases the likelihood of disallowed costs or questioned costs in future audits. Failure to adequately control disbursements may also expose the client to potential financial misstatements or fraud. Questions Costs In total, $141 of expenses could not be supported. Perspective This audit finding is systematic. Statistical Sample The sample was a statistically valid sample. Repeat Finding This audit finding is not a repeat finding. Recommendation We recommend that the Organization strengthen its internal control procedures to ensure that all disbursement transactions are properly supported by invoices or other appropriate documentation before they are recorded and paid. The client should implement a regular reconciliation process to ensure that recorded amounts agree with supporting documentation. Additionally, management should establish policies for the retention of documentation to ensure it is readily available for audit and compliance purposes. Views of Responsible Officials Management agrees with the finding. The Organization is in the process of updating its procedures to ensure that all disbursements are supported by invoices and that recorded amounts are regularly reconciled with supporting documentation. Additionally, the Organization will implement a formal policy for document retention to ensure audit readiness.