Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages with regard to budget estimates used for interim accounting purposes. At least quarterly, comparisons of actual costs to budgeted distributions based on the monthly activity reports should be made. Costs charged to federal awards to reflect adjustments made as a result of the activity actually performed may be recorded annually if the quarterly comparisons show the differences between budgeted and actual costs are less than ten percent. The budget estimates should be revised at least quarterly, if necessary, to reflect changed circumstances. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the budget estimates were reviewed quarterly and the costs charged to the federal program were adjusted based on the activity actually performed. Recommendation: The Institute should implement procedures to ensure any budget estimates used for salaries and wages are reviewed quarterly and adjusted to reflect actual cost for the activity performed in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages for this program. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports (PAR). This is required when employees work on more than one Federal award, a Federal award and a non-Federal award, an indirect cost 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. The PARS are required to meet the following standards: they must reflect an after the fact distribution of the actual activity of each employee, they must account for the total activity for which employee is compensated, they must be prepared at least monthly and coincide with one or more pay periods, and they must be signed by the employee. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the documentation for federal salaries and wages were completed in accordance with the requirements. Questioned Costs: Not Determined Recommendation: The Institute should implement procedures to ensure all documents to support the salaries and wages charged to federal programs are prepared in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages for this program. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports (PAR). This is required when employees work on more than one Federal award, a Federal award and a non-Federal award, an indirect cost 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. The PARS are required to meet the following standards: they must reflect an after the fact distribution of the actual activity of each employee, they must account for the total activity for which employee is compensated, they must be prepared at least monthly and coincide with one or more pay periods, and they must be signed by the employee. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the documentation for federal salaries and wages were completed in accordance with the requirements. Questioned Costs: Not Determined Recommendation: The Institute should implement procedures to ensure all documents to support the salaries and wages charged to federal programs are prepared in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages for this program. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports (PAR). This is required when employees work on more than one Federal award, a Federal award and a non-Federal award, an indirect cost 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. The PARS are required to meet the following standards: they must reflect an after the fact distribution of the actual activity of each employee, they must account for the total activity for which employee is compensated, they must be prepared at least monthly and coincide with one or more pay periods, and they must be signed by the employee. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the documentation for federal salaries and wages were completed in accordance with the requirements. Questioned Costs: Not Determined Recommendation: The Institute should implement procedures to ensure all documents to support the salaries and wages charged to federal programs are prepared in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
Criteria: Section 200.430 of 2 CFR Part 200 states standards for documentation for personnel expenses for the support of federal salaries and wages. Condition/Effect: The Institute did not fully comply with the South Carolina Department of Education’s (“SCDE”) requirements for support for federal salaries and wages for this program. Where employees work on multiple activities or cost objectives, a distribution of their salaries or wages will be supported by personnel activity reports (PAR). This is required when employees work on more than one Federal award, a Federal award and a non-Federal award, an indirect cost 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. The PARS are required to meet the following standards: they must reflect an after the fact distribution of the actual activity of each employee, they must account for the total activity for which employee is compensated, they must be prepared at least monthly and coincide with one or more pay periods, and they must be signed by the employee. Cause: The Institute’s internal controls over salaries and wages charged to federal programs were not operating effectively to ensure that the documentation for federal salaries and wages were completed in accordance with the requirements. Questioned Costs: Not Determined Recommendation: The Institute should implement procedures to ensure all documents to support the salaries and wages charged to federal programs are prepared in accordance with the SCDE requirements. Views of Responsible Officials and Planned Corrective Actions: The Institute agrees with the finding and has proactively taken action to ensure compliance with SCDE requirements. See management's corrective action plan.
2023-001 – Allowable Costs relating to Time and Effort and Internal Controls Information on the Major Federal Program U.S. Department of Health and Human Services Name of Program: Substance Abuse and Mental Health Services Assistance Listing Number: 93.243 Grant Award Number: 1H79TI085239-01/6H79SM080760-03M001/1H79TI084237-01/ 1H79SM080760-01 Grant Award Period: September 30, 2022 to September 29, 2027, November 30, 2018 to November 29, 2023, September 30, 2021 to September 29, 2026/ November 30, 2018 to November 29, 2023 U.S. Department of Veterans Affairs Name of Program: Veterans Supportive Housing Per Diem Program Assistance Listing Number: 64.024 Grant Award Number: VOAQ754-1291-558-PD-21, VOAQ754-2080-558-CM-22, VOAQ754-2286-565-CM-22 Grant Award Period: October 1, 2022 to September 30, 2023 Criteria or Specific Requirements – In accordance with 2 CFR Section 200.430.8(i), charges to federal awards for salaries and wages must be based on records that reflect the actual work performed. The charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the non-Federal entity. Condition - Several charges to Federal awards for salaries and wages were not supported with properly completed time sheets and in certain instances, approval of the timesheets by individuals knowledgeable of the federal program were not documented. Cause - While there is a time keeping system implemented to track daily hours worked by employees, the Organization’s current internal control system over payroll is not consistently followed to produce properly completed time sheets nor proper supervisory approval of timesheets. Effect - Charges to Federal awards for salaries and wages may not reflect accurate time worked. Questioned costs - None Context - We selected 64 salary transactions charged to the federal programs to test controls over allowable costs. Out of the 64 transactions tested, there were 15 instances where controls did not operate effectively, i.e., timesheets were not properly completed to reflect correct number of days worked or timesheets were not properly approved by the employees’ supervisors. Repeat finding - No Recommendation - We recommend the Organization consistently enforce its internal controls over payroll to ensure that all timesheets are properly and timely completed and reviewed and verified by appropriate personnel for accuracy. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit and effective immediately, will implement necessary procedures as described under the corrective action plan to address the finding. Effective immediately, the Organization will strictly enforce its policy for employees to properly complete their timesheets and for supervisors to properly review and approve employees’ timesheets. To do this, the Organization will conduct a training for all employees and supervisors about how to properly complete and review timesheets. To ensure compliance with the policy, the Organization will conduct random checks of timesheets every pay period to verify that supervisory approval is performed. Appropriate disciplinary action will be implemented for non-compliance.
2023-001 – Allowable Costs relating to Time and Effort and Internal Controls Information on the Major Federal Program U.S. Department of Health and Human Services Name of Program: Substance Abuse and Mental Health Services Assistance Listing Number: 93.243 Grant Award Number: 1H79TI085239-01/6H79SM080760-03M001/1H79TI084237-01/ 1H79SM080760-01 Grant Award Period: September 30, 2022 to September 29, 2027, November 30, 2018 to November 29, 2023, September 30, 2021 to September 29, 2026/ November 30, 2018 to November 29, 2023 U.S. Department of Veterans Affairs Name of Program: Veterans Supportive Housing Per Diem Program Assistance Listing Number: 64.024 Grant Award Number: VOAQ754-1291-558-PD-21, VOAQ754-2080-558-CM-22, VOAQ754-2286-565-CM-22 Grant Award Period: October 1, 2022 to September 30, 2023 Criteria or Specific Requirements – In accordance with 2 CFR Section 200.430.8(i), charges to federal awards for salaries and wages must be based on records that reflect the actual work performed. The charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the non-Federal entity. Condition - Several charges to Federal awards for salaries and wages were not supported with properly completed time sheets and in certain instances, approval of the timesheets by individuals knowledgeable of the federal program were not documented. Cause - While there is a time keeping system implemented to track daily hours worked by employees, the Organization’s current internal control system over payroll is not consistently followed to produce properly completed time sheets nor proper supervisory approval of timesheets. Effect - Charges to Federal awards for salaries and wages may not reflect accurate time worked. Questioned costs - None Context - We selected 64 salary transactions charged to the federal programs to test controls over allowable costs. Out of the 64 transactions tested, there were 15 instances where controls did not operate effectively, i.e., timesheets were not properly completed to reflect correct number of days worked or timesheets were not properly approved by the employees’ supervisors. Repeat finding - No Recommendation - We recommend the Organization consistently enforce its internal controls over payroll to ensure that all timesheets are properly and timely completed and reviewed and verified by appropriate personnel for accuracy. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit and effective immediately, will implement necessary procedures as described under the corrective action plan to address the finding. Effective immediately, the Organization will strictly enforce its policy for employees to properly complete their timesheets and for supervisors to properly review and approve employees’ timesheets. To do this, the Organization will conduct a training for all employees and supervisors about how to properly complete and review timesheets. To ensure compliance with the policy, the Organization will conduct random checks of timesheets every pay period to verify that supervisory approval is performed. Appropriate disciplinary action will be implemented for non-compliance.
2023-001 – Allowable Costs relating to Time and Effort and Internal Controls Information on the Major Federal Program U.S. Department of Health and Human Services Name of Program: Substance Abuse and Mental Health Services Assistance Listing Number: 93.243 Grant Award Number: 1H79TI085239-01/6H79SM080760-03M001/1H79TI084237-01/ 1H79SM080760-01 Grant Award Period: September 30, 2022 to September 29, 2027, November 30, 2018 to November 29, 2023, September 30, 2021 to September 29, 2026/ November 30, 2018 to November 29, 2023 U.S. Department of Veterans Affairs Name of Program: Veterans Supportive Housing Per Diem Program Assistance Listing Number: 64.024 Grant Award Number: VOAQ754-1291-558-PD-21, VOAQ754-2080-558-CM-22, VOAQ754-2286-565-CM-22 Grant Award Period: October 1, 2022 to September 30, 2023 Criteria or Specific Requirements – In accordance with 2 CFR Section 200.430.8(i), charges to federal awards for salaries and wages must be based on records that reflect the actual work performed. The charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the non-Federal entity. Condition - Several charges to Federal awards for salaries and wages were not supported with properly completed time sheets and in certain instances, approval of the timesheets by individuals knowledgeable of the federal program were not documented. Cause - While there is a time keeping system implemented to track daily hours worked by employees, the Organization’s current internal control system over payroll is not consistently followed to produce properly completed time sheets nor proper supervisory approval of timesheets. Effect - Charges to Federal awards for salaries and wages may not reflect accurate time worked. Questioned costs - None Context - We selected 64 salary transactions charged to the federal programs to test controls over allowable costs. Out of the 64 transactions tested, there were 15 instances where controls did not operate effectively, i.e., timesheets were not properly completed to reflect correct number of days worked or timesheets were not properly approved by the employees’ supervisors. Repeat finding - No Recommendation - We recommend the Organization consistently enforce its internal controls over payroll to ensure that all timesheets are properly and timely completed and reviewed and verified by appropriate personnel for accuracy. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit and effective immediately, will implement necessary procedures as described under the corrective action plan to address the finding. Effective immediately, the Organization will strictly enforce its policy for employees to properly complete their timesheets and for supervisors to properly review and approve employees’ timesheets. To do this, the Organization will conduct a training for all employees and supervisors about how to properly complete and review timesheets. To ensure compliance with the policy, the Organization will conduct random checks of timesheets every pay period to verify that supervisory approval is performed. Appropriate disciplinary action will be implemented for non-compliance.
2023-001 – Allowable Costs relating to Time and Effort and Internal Controls Information on the Major Federal Program U.S. Department of Health and Human Services Name of Program: Substance Abuse and Mental Health Services Assistance Listing Number: 93.243 Grant Award Number: 1H79TI085239-01/6H79SM080760-03M001/1H79TI084237-01/ 1H79SM080760-01 Grant Award Period: September 30, 2022 to September 29, 2027, November 30, 2018 to November 29, 2023, September 30, 2021 to September 29, 2026/ November 30, 2018 to November 29, 2023 U.S. Department of Veterans Affairs Name of Program: Veterans Supportive Housing Per Diem Program Assistance Listing Number: 64.024 Grant Award Number: VOAQ754-1291-558-PD-21, VOAQ754-2080-558-CM-22, VOAQ754-2286-565-CM-22 Grant Award Period: October 1, 2022 to September 30, 2023 Criteria or Specific Requirements – In accordance with 2 CFR Section 200.430.8(i), charges to federal awards for salaries and wages must be based on records that reflect the actual work performed. The charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the non-Federal entity. Condition - Several charges to Federal awards for salaries and wages were not supported with properly completed time sheets and in certain instances, approval of the timesheets by individuals knowledgeable of the federal program were not documented. Cause - While there is a time keeping system implemented to track daily hours worked by employees, the Organization’s current internal control system over payroll is not consistently followed to produce properly completed time sheets nor proper supervisory approval of timesheets. Effect - Charges to Federal awards for salaries and wages may not reflect accurate time worked. Questioned costs - None Context - We selected 64 salary transactions charged to the federal programs to test controls over allowable costs. Out of the 64 transactions tested, there were 15 instances where controls did not operate effectively, i.e., timesheets were not properly completed to reflect correct number of days worked or timesheets were not properly approved by the employees’ supervisors. Repeat finding - No Recommendation - We recommend the Organization consistently enforce its internal controls over payroll to ensure that all timesheets are properly and timely completed and reviewed and verified by appropriate personnel for accuracy. Views of Responsible Officials - Management agrees with the federal award finding identified in the audit and effective immediately, will implement necessary procedures as described under the corrective action plan to address the finding. Effective immediately, the Organization will strictly enforce its policy for employees to properly complete their timesheets and for supervisors to properly review and approve employees’ timesheets. To do this, the Organization will conduct a training for all employees and supervisors about how to properly complete and review timesheets. To ensure compliance with the policy, the Organization will conduct random checks of timesheets every pay period to verify that supervisory approval is performed. Appropriate disciplinary action will be implemented for non-compliance.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Retention of Files and Records - Criteria: CFR 200.430 Compensation - Records of salaries must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. These records should include timesheets, or other time records that are signed and approved by the appropriate personnel to confirm that the time is accurate. Condition and Context: In testing the compliance and accuracy of allowable payroll costs during the award year, it was noted that the Organization did not maintain certain appropriate documentation of time and effort, specifically timesheets showing the review and approval process for certain employees during the award year. Questioned Costs: None. Cause: The Organization has policies and procedures in place to ensure that the appropriate documentation for time and effort is maintained and supported by a system of internal control. However, in this case the procedures were not adhered due to turnover in key employees and change in payroll providers. Effect: The absence of documentation that supports the review and approval process of time and effort reporting makes it difficult for management to substantiate that the payroll charges are accurate and could lead to non-compliance with Federal requirements. Perspective Information: We tested 25 timesheets. Of those selections 1 timesheet was missing and 1 timesheet did not have the proper approval. The sampling methodology used was a statistically valid sample. Recurring Finding: No. Recommendation:We recommend that the Organization modify its policies and procedures relating to time and effort reporting to align with any changes in payroll processes and any changes in personnel at the Organization to ensure that appropriate support is maintained at all times at the Organization.
Federal Agency: U.S. Department of Education Federal Program Name: Special Education Cluster Assistance Listing Number: 84,027, 84.173 Federal Award Identification Number: N/A Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education and the Massachusetts Department of Early Education and Care Pass-Through Number(s): 240-585359-2022-0131, 240-744100-2023-0131, 252-610784-2022-0131, 262-585362-2022-0131, 262-744101-2023-0131, 264-610783-2022-0131 Award Period: July 1, 2021 – June 30, 2023 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Criteria or specific requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Such records must also reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition and Context: Three (3) of nine (9) payroll transactions in our statistically valid sample were not supported with documentation of level of effort for the grant. Questioned costs: • Known: $13,438 • Likely: $96,278 Cause: Procedures were not in place to ensure that supporting payroll records accurately reflected the time and effort charged to the program. Effect: Noncompliance with federal compliance requirements occurred. Repeat Finding: No. Recommendation: We recommend procedures be implemented to ensure that records supporting the distribution of employee time and effort accurately reflect the charges to the grant program. Views of responsible officials: Hingham Public Schools has circulated training guides and templates to grant writers on the requirement to have time and effort reporting completed in a timely manner for staff assigned to specific grants. Grant accounting associates have also been provided with the training material to ensure that there is an additional review of time and effort reports as part of the grant accounting, review and finalization process.
Federal Agency: U.S. Department of Education Federal Program Name: ESSER I Assistance Listing Number: 84.425D Federal Award Identification Number: N/A Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education Pass-Through Number(s): 113-397270-2021-0131 Award Period: July 1, 2021 – June 30, 2023 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Such records must also reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition and Context: Ten (10) of ten (10) payroll transactions in our statistically valid sample were supported by records which accurately reflected the work performed. However, such records did not include documented evidence of review and approval which would provide reasonable assurance that the charges were accurate, allowable, and properly allocated. Questioned costs: Below the reportable limit Cause: Procedures were not in place to ensure the payroll records were supported by the Town’s internal controls. Effect: Federal funds could be expended for unallowable activities and subject to disallowance. Repeat Finding: Yes, 2022-002 Recommendation: We recommend procedures be implemented to ensure that the records supporting payroll charges to the federal grant program include documented evidence of review and approval. Views of responsible officials: The Hingham Public School's general weekly payroll is approved on a weekly basis by Management. In the case of our summer programs a similar control has been put in place by Management to ensure all payroll records are approved before processing.
2023-002 – Internal Controls over Compliance with Documentation of Personnel Expenses Finding Type: Significant Deficiency in Internal Control over Compliance Program: Education Stabilization Fund (ALN #84.425) Compliance Area: Allowable Costs/Cost Principles Criteria: 2 CFR Part 200.430(i) Standards for Documentation of Personnel Expenses requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and 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. Condition: The District did not appropriately reflect the federal awards for which certain employee salaries and wages were charged, including the improper use of a semi-annual certification and timesheets that do not depict the federal award from which the salaries and wages are paid. Cause: The District failed to ensure pre-filled forms were not used for certain employees being charged to federal awards. In addition, the District failed to fully understand the appropriate uses of a semi-annual certification. Effect: Failure to properly document personnel expenses could result in non-compliance and dis-allowed costs, resulting in the loss of federal funds. Auditor’s Recommendations: It is recommended that the District communicate to all departments that pre-filled forms should not be utilized when documenting salaries and wages charged to federal awards. In addition, the District should review the requirement for personnel activity reports and semi-annual certifications to ensure the use of either is appropriate in each circumstance.
2023-002 – Internal Controls over Compliance with Documentation of Personnel Expenses Finding Type: Significant Deficiency in Internal Control over Compliance Program: Education Stabilization Fund (ALN #84.425) Compliance Area: Allowable Costs/Cost Principles Criteria: 2 CFR Part 200.430(i) Standards for Documentation of Personnel Expenses requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and 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. Condition: The District did not appropriately reflect the federal awards for which certain employee salaries and wages were charged, including the improper use of a semi-annual certification and timesheets that do not depict the federal award from which the salaries and wages are paid. Cause: The District failed to ensure pre-filled forms were not used for certain employees being charged to federal awards. In addition, the District failed to fully understand the appropriate uses of a semi-annual certification. Effect: Failure to properly document personnel expenses could result in non-compliance and dis-allowed costs, resulting in the loss of federal funds. Auditor’s Recommendations: It is recommended that the District communicate to all departments that pre-filled forms should not be utilized when documenting salaries and wages charged to federal awards. In addition, the District should review the requirement for personnel activity reports and semi-annual certifications to ensure the use of either is appropriate in each circumstance.
2023-002 – Internal Controls over Compliance with Documentation of Personnel Expenses Finding Type: Significant Deficiency in Internal Control over Compliance Program: Education Stabilization Fund (ALN #84.425) Compliance Area: Allowable Costs/Cost Principles Criteria: 2 CFR Part 200.430(i) Standards for Documentation of Personnel Expenses requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and 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. Condition: The District did not appropriately reflect the federal awards for which certain employee salaries and wages were charged, including the improper use of a semi-annual certification and timesheets that do not depict the federal award from which the salaries and wages are paid. Cause: The District failed to ensure pre-filled forms were not used for certain employees being charged to federal awards. In addition, the District failed to fully understand the appropriate uses of a semi-annual certification. Effect: Failure to properly document personnel expenses could result in non-compliance and dis-allowed costs, resulting in the loss of federal funds. Auditor’s Recommendations: It is recommended that the District communicate to all departments that pre-filled forms should not be utilized when documenting salaries and wages charged to federal awards. In addition, the District should review the requirement for personnel activity reports and semi-annual certifications to ensure the use of either is appropriate in each circumstance.
Finding 2023-002: Special Education Cluster Semi-Annual Certification Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.027A, 84.027X, 84.173A and 84.173X Award numbers: 220450 21-22, 230493 22-23, 230450 22-23, COVID-19 221280 21-22, 220460 21-22, 230460 22-23 and COVID-19 221285 21-22 Award year ends: June 30, 2023, September 30, 2023 and September 30, 2024 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Special Education Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Eighteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each eligible employee for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they were not prepared timely as the forms for fourteen employees were completed and certified at least two-and-a-half or three-and-a-half months after the six-month period ending dates. Additionally, both semi-annual certifications for four employees were approved during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel did not timely review and approve the federal requirements for time-and-effort reporting semi-annual certifications. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
Finding 2023-002: Special Education Cluster Semi-Annual Certification Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.027A, 84.027X, 84.173A and 84.173X Award numbers: 220450 21-22, 230493 22-23, 230450 22-23, COVID-19 221280 21-22, 220460 21-22, 230460 22-23 and COVID-19 221285 21-22 Award year ends: June 30, 2023, September 30, 2023 and September 30, 2024 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Special Education Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Eighteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each eligible employee for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they were not prepared timely as the forms for fourteen employees were completed and certified at least two-and-a-half or three-and-a-half months after the six-month period ending dates. Additionally, both semi-annual certifications for four employees were approved during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel did not timely review and approve the federal requirements for time-and-effort reporting semi-annual certifications. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
Finding 2023-002: Special Education Cluster Semi-Annual Certification Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.027A, 84.027X, 84.173A and 84.173X Award numbers: 220450 21-22, 230493 22-23, 230450 22-23, COVID-19 221280 21-22, 220460 21-22, 230460 22-23 and COVID-19 221285 21-22 Award year ends: June 30, 2023, September 30, 2023 and September 30, 2024 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Special Education Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Eighteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each eligible employee for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they were not prepared timely as the forms for fourteen employees were completed and certified at least two-and-a-half or three-and-a-half months after the six-month period ending dates. Additionally, both semi-annual certifications for four employees were approved during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel did not timely review and approve the federal requirements for time-and-effort reporting semi-annual certifications. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
Finding 2023-002: Special Education Cluster Semi-Annual Certification Procedures U.S. Department of Education Pass-through agency: Michigan Department of Education Assistance Listing Numbers: 84.027A, 84.027X, 84.173A and 84.173X Award numbers: 220450 21-22, 230493 22-23, 230450 22-23, COVID-19 221280 21-22, 220460 21-22, 230460 22-23 and COVID-19 221285 21-22 Award year ends: June 30, 2023, September 30, 2023 and September 30, 2024 Specific Requirement: Allowable Costs/Cost Principles Criteria: Section 200.430 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations (CFR) Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires charges to federal award for salaries and wages to be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal controls which provide reasonable assurance that charges are accurate, allowable and properly allocated, (2) reasonably reflect total activity for which the employee is compensated, (3) encompass both federally assisted and all other activities compensated by the entity, (4) support the distribution of the employee’s wages among specific cost objectives if the employee works on more than one federal award, (5) be reconciled with payroll budget estimates with necessary adjustments made to accounting records to ensure that excess costs are not charged to federal programs. Appendix B to 2 CFR, Part 225—Selected Items of Cost indicates that where employees are expected to work solely on a single Federal award or cost objective, charges for their salaries and wages will be supported by periodic certifications that the employees worked solely on that program for the period covered by the certification. These certifications will be prepared at least semi-annually and will be signed by the employee or supervisory official having first-hand knowledge of the work performed by the employee. Questioned Costs: None. Condition: During our detailed testing of time-and-effort reporting for the Special Education Cluster programs, we noted that semi-annual certifications were prepared to comply with federal time and effort requirements. However, the reports were not timely prepared or timely reviewed by the program supervisors with documented approval. Context: Eighteen employees working in the federal program were eligible for semi-annual certifications because their payroll costs were fully allocated to a single federal program or cost objective. Separate semi-annual certifications were prepared for each eligible employee for each six-month period during the fiscal year. While all certifications contained the proper components, including documented supervisor approval, they were not prepared timely as the forms for fourteen employees were completed and certified at least two-and-a-half or three-and-a-half months after the six-month period ending dates. Additionally, both semi-annual certifications for four employees were approved during the audit process. The sample was not a statistically valid sample. Effect: Failure to timely and properly prepare and review time-and-effort reporting could allow improper payroll expenses to be charged to the School District’s federal programs. As a result, payroll compensation and fringe benefits charged for these employees could be disallowed, or there could be missed opportunities for reimbursement. Cause: The School District program personnel did not timely review and approve the federal requirements for time-and-effort reporting semi-annual certifications. As a result, semi-annual certifications were not reviewed and approved for these employees during the required timeframes. Repeat Finding: This is not a repeat finding. Recommendation: The School District should provide training to educate all employees working in federal programs of the requirements for documenting personnel expenses under Uniform Grant Guidance, and the School District should require proper time-and-effort documentation to be timely reviewed and approved by the appropriate program supervisor. Views of Responsible Officials: The School District agrees with this finding.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Finding 2023-002: Salaries and Wages (Allowable Costs) Federal Programs: U.S. Department of Health and Human Services (HHS) ALN 93.600 Criteria: According to 2 CFR Section 200.430(i), charges to federal grants for salaries and wages must be based on records that accurately reflect the work performed and the 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 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; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: Educare allocates time to federal grants based on estimates made by management that are adjusted throughout the year. Cause: For several years, most of Educare's employees charged 100% of their time to one federal program. However, in recent years, the number of employees who charged 100% of their time to one federal program has decreased while the number of employees who charged time to multiple programs has increased. While Educare uses timesheets, salaries were not allocated to federal programs based on actual time spent per timesheets. Instead, Educare performed an after the fact reconciliation of time spent to the estimates used, but the reconciliation was not documented and incorporated into Educare's official records. Effect or Potential Effect: The possibility exists that salaries and wages charged to federal grants were not supported by documented evidence in accordance with the Uniform Guidance. Questioned Costs: None. Context: All of the salaries and wages selected for testing were determined by management based on estimates of time spent that were adjusted throughout the year. Documentary evidence of the reconciliation between the estimates and actual effort was not maintained in Educare's official records. Identification as a Repeat Finding: Not applicable. Recommendation: While the amount of time that was charged to each program may have been materially correct, documentary evidence of the reconciliation between the estimates and actual effort was not maintained by Educare. We recommend that Educare maintain documentation of its allocation process to support time charged to its federal programs. The allocation process can be supported by either timesheets or after the fact effort reports from employees which are reconciled to the estimates used to allocate salaries and wages to programs, including federal programs.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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; (vi) [Reserved] (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” In accordance with LAUSD Policy Bulletin 2643.13 and 2643.14 entitled, “Documentation for Employees Paid from Federal and State Categorical Programs,” the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.13 and 2643.14. Title I Grants to Local Educational Agencies: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the timesheet hours submitted by two (2) employees when compared to the records in SAP. One (1) employee’s hours reported on the timesheet was less than the hours recorded in SAP, leading to an overstatement of program expenditures. Conversely, another employee’s hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $132 and $726, respectively, of the $186,080 sampled from $278,384,872 of the total payroll expenditures. Special Education-Grants to States (IDEA, Part B): In our sample of sixty (60) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, four (4) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $23,194. English Language Acquisition State Grants: In our sample of sixty (60) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by three (3) employees compared to the hours recorded in SAP. Specifically, one (1) employee reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast, two (2) employees reported more hours on the Muti-Funded Time Reports than the hours recorded in SAP, leading to an understatement of program expenditures. Total exceptions for overstatement and understatement amounted to $49 and $1,280, respectively, of the $156,424 sampled from $8,984,427 of the total payroll expenditures. Improving Teacher Quality State Grants: In our sample of sixty-one (61) payroll expenditures, we identified discrepancies in the Multi-Funded Time Reports submitted by seven (7) employees compared to the hours recorded in SAP. Specifically, five (5) employees reported hours on the Multi-Funded Time Reports that were less than the hours recorded in SAP, leading to an overstatement of program expenditures. In contrast two (2) employees reported hours on the Muti-Funded Time Report that were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we found that one (1) employee’s hours recorded in SAP did not have a corresponding Muti-Funded Time Report at all, leading to an overstatement of program expenditures. Total exceptions for overstatement and understatement amounted to $7,697 and $1,957, respectively, of the $284,882 sampled from $17,263,439 of the total payroll expenditures. COVID-19 American Rescue Plan - Elementary and Secondary School Emergency Relief (ARP ESSER): In our sample of sixty-one (61) payroll expenditures, we identified a compliance issue regarding signatures on Periodic Certifications. Specifically, two (2) employees signed their Periodic Certifications only in response to our audit request, indicating that these signatures were not obtained within the required timeframe. Total exceptions for untimely certifications amounted to $9,260. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District’s policies and procedures. The discrepancies between time reports/timesheets and SAP data appear to be due to clerical errors and lack of sufficient review processes. Such oversights lead to instances of non-compliance and inaccuracies in financial reporting/SEFA, impacting the reliability of payroll expenditure documentation. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Title I Grants to Local Educational Agencies (AL No. 84.010): $132 overstatement and $726 understatement due to unsupported hours charged. English Language Acquisition State Grants, U.S. Department of Education (AL No. 84.365Z): $49 overstatement and $1,280 understatement due to unsupported hours charged. Improving Teacher Quality State Grants (AL No. 84.367): $7,697 overstatement and $1,957 understatement due to unsupported hours charged. There were no questioned costs arising from untimely completed/signed Periodic Certifications or Multi-Funded Time Reports, as the payroll costs incurred were still allowable costs, despite the timing issues, for the respective programs (i.e., IDEA and ESSER). Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2022-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the necessary procedures to ensure ongoing compliance is effectively monitored. We also recommend that management responsible for each grant develop and reinforce controls for reviewing and approving Multi-Funded Time Reports or timesheets prior to submission to the funding agency, ensuring that the review and approval process is well-documented. In addition, the District should also conduct internal audits to assess the accuracy of timesheets or Multi-Funded Time Reports and the timeliness of signed Periodic Certification submissions to ensure compliance with the established requirements.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
U.S. Department of Education Passed-through the Commonwealth of Massachusetts’ Department of Elementary and Secondary Education Special Education Cluster (IDEA) – ALN 84.027 & 84.173 COVID-19 – Special Education Cluster (IDEA) – ALN 84.027X & 84.173X Criteria: Per 2 CFR 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Semi-annual or monthly time and effort certifications are to be utilized if the non-federal entity’s records do not meet the related standards described in the Uniform Guidance. Condition: Semi-annual time and effort certifications were not maintained for a grant employee whose salaries and wages were not supported by detailed time records. Cause: Turnover in the school payroll position caused the certifications to be missed during the year. Effect: The School is not in compliance with applicable cost principles related to salaries and wages. Questioned Costs: $35,350.88 Repeat Finding from Prior Year: No. Recommendation: The School should implement procedures to obtain time and effort certifications from grant employees whose wages are not supported with detailed time records. Views of Responsible Official: Management agrees with the finding.
of Agriculture, Passed through Minnesota Department of Education Federal Financial Assistance Listing/CFDA Number 10.553/10.555 Child Nutrition Cluster Activities Allowed or Unallowed; Allowable Costs and Cost Principles Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria – A good system of internal control includes an adequate system for ensuring all expenditures are properly recorded and allowable under the related federal grant in accordance with 2 CFR 200.430(i). Condition – During the course of our engagement, we noted ten instances where documentation of changes to contract wage rates or evidence of approved timesheets were not maintained. Cause – The District does not have an internal control system designed to review and maintain documentation for expenditures, including payroll transactions. Effect – A lack of internal controls over allowable costs and activities could result in improper use of federal funds and non‐compliance with the provisions of applicable grant requirements. Questioned Costs – $8,419 Context/Sampling – A non‐statistical sample of 60 transactions out of 2,215 total transactions were selected for testing, which accounted for $35,327 of $525,590 of federal program expenditures. Repeat Finding from Prior Year(s) – Yes, 2022‐004 Recommendation – The District should review internal control procedures to ensure federal expenditures are being properly reviewed for unallowable costs and activities. Supporting documentation should then be maintained once the review is documented and performed. Views of Responsible Officials – There is no disagreement with the audit finding.