FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
FINDING #2023-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.010 – Title I, Part A, Basic Grants Low-Income and Neglected 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 84.425 – Elementary and Secondary School Emergency Relief II (ESSER II) Fund 84.425 – Elementary and Secondary School Emergency Relief III (ESSER III) Fund Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Auditors selected a representative sample of 19 employees with salaries and benefits charged to the federal programs noted above during the 2022-23 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. This condition was present in 12 out of the 19 sample selections. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Cause: Administrative oversight. Effect: The District is not in compliance with 2 CFR §200.430. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is a repeat of Finding #2022-002. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 82. To be provided by client, signed on letterhead.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Finding 2023-009: Time Accounting (50000) Program Identification: Federal Agency: U.S. Department of Education Pass‐through Entity: California Department of Education Program Names: Title I, Part A Grants: Title I, Part A, Basic Grants Local-Income and Neglected (AL No. 84.010) ESEA, School Improvement Grant Funding for LEAs (AL No. 84.010) Program Names: Education Stabilization Funds: Elementary and Secondary School Emergency Relief II Fund (AL No. 84.425) Elementary and Secondary School Emergency Relief III Fund (AL No. 84.425) Expand Learning Opportunities Grant ESSER II State Reserve (AL No. 84.425) Criteria: 2 CFR, section 200.430 states, in part: (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR, section 200.303 states, in part: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. CSAM Procedure 905 states, in part: Periodic (Semiannual) Certification Employees who work solely on a single federal award or cost objective need only complete a periodic certification. The periodic certification must: • Be prepared at least semiannually. • Be signed by the employee or the supervisory official having firsthand knowledge of the work performed by the employee. • State the employee worked solely on that single federal program or cost objective during the period covered by the certification. Where multiple employees work on the same cost objective, a blanket certification may be used as the documentation for all employees who worked on the cost objective. Personnel Activity Report Except as provided in “Substitute Systems for Time Accounting” … employees who work on multiple activities or cost objectives of which at least one is federal must complete a personnel activity report (PAR) or equivalent documentation. A PAR may be as detailed as a document that identifies the employee’s activity daily by hours, or it may be as simple as a report of the total hours or percentage of hours spent in each categorical program or cost objective. The level of detail can generally be determined by the diversity and variation of the employee’s work activities. The safest approach is to provide more documentation rather than less. Condition: The District lacks procedures and controls to ensure that employees being funded from federal funds complete their personal activity reports monthly as well as ensuring semi-annual time certifications are completed in a timely manner. Context: Our total sample consisted of 44 employees, and for all 44 employees it took the District months to provide time accounting documentation. In some instances, the District had to go back and prepare the time accounting documentation, because some of the employees sampled were no longer employed by the District. Questioned Costs: No questioned costs. Cause: District lacks adequate controls to ensure that time certification documentation is prepared and maintained to support all employees who are paid with federal funds. Effect: Lack of proper controls to ensure that time certification documentation is prepared may result in the District having to go back and recreate documentation for individuals who are no longer employed by the District. In addition, lack of time documentation may result in a questioned cost. Recommendation: We recommend that the District comply with 2 CFR, section 200.303, and CSAM Procedure 905, which require that employee time certification forms be maintained for employees who charge time to federal program. Views of Responsible Officials: The State and Federal Programs Department at the recommendation of FPM began Time and Effort Procedures training on December 6, 2023, with the Office Managers and Administrative Secretaries to emphasize the critical importance of accurate time certification records for federal fund expenditures. In addition, the State and Federal Programs (SFP) Department and Budget Department are collaborating on identifying the Employees charged to Title I. Currently the Employee list for July 2023- December 2023 have been provided to SFP by the Budget Department. SFP has sent the Time and Effort forms to the Departments: Leads, Office Managers with a deadline for collection in January. The district commits to collecting semi-annual time and effort documentation within 10 business days of when the effort window closes.
Significant Deficiencies 2023-001. Allowable Costs/Cost Principles Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027A Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173A Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to Federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance. The reports were not updated to reflect actual time performance amounts. Potential Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Context: The District maintains time records for employees charged to Federal awards in accordance with approved budgets. Questioned Costs: None reported. Repeat Finding: This is part of a repeat finding from a previous year audit, 2021-001. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.
Significant Deficiencies 2023-001. Allowable Costs/Cost Principles Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027A Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173A Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to Federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance. The reports were not updated to reflect actual time performance amounts. Potential Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Context: The District maintains time records for employees charged to Federal awards in accordance with approved budgets. Questioned Costs: None reported. Repeat Finding: This is part of a repeat finding from a previous year audit, 2021-001. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.
Significant Deficiencies 2023-001. Allowable Costs/Cost Principles Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027A Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173A Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to Federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance. The reports were not updated to reflect actual time performance amounts. Potential Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Context: The District maintains time records for employees charged to Federal awards in accordance with approved budgets. Questioned Costs: None reported. Repeat Finding: This is part of a repeat finding from a previous year audit, 2021-001. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.
Significant Deficiencies 2023-001. Allowable Costs/Cost Principles Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027A Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173A Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to Federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance. The reports were not updated to reflect actual time performance amounts. Potential Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Context: The District maintains time records for employees charged to Federal awards in accordance with approved budgets. Questioned Costs: None reported. Repeat Finding: This is part of a repeat finding from a previous year audit, 2021-001. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.
Significant Deficiencies 2023-001. Allowable Costs/Cost Principles Special Education Cluster Special Education Grants to States: IDEA Part B ALN: 84.027A Special Education Grants to States: IDEA 611 ARP Allocations ALN: 84.027X Special Education Preschool Grants: IDEA Preschool ALN: 84.173A Special Education Preschool Grants: IDEA 619 ARP Allocations ALN: 84.173X Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart E, 2 CFR §200.430. Condition: Subpart E, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District prepared periodic certification equivalents, but it did not comply with Subpart E, 2 CFR §200.430. Cause: The staff that were responsible for maintaining records that accurately reflect the work performed, as described in Subpart E, 2 CFR §200.430, to support salaries charged to Federal awards, prepared annual periodic certification reports using amounts based on budgets for time performance. The reports were not updated to reflect actual time performance amounts. Potential Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Context: The District maintains time records for employees charged to Federal awards in accordance with approved budgets. Questioned Costs: None reported. Repeat Finding: This is part of a repeat finding from a previous year audit, 2021-001. Recommendation: The District should revise its procedures to prepare documentation to support actual salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart E, 2 CFR §200.430. Views of Responsible Officials of Auditee: The District will adopt procedures to ensure appropriate documentation will be prepared to comply with Subpart E, 2 CFR §200.430.
2023-001 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Number: 84.425U Passed-through Identification: #20220575 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have a signed contract or payrate form. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $95,699 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Program: AL 20.509 – Formula Grants for Rural Areas – Allowability & Subrecipient Monitoring Grant Number & Year: NE-2019-013-00, Performance End FFY 2023; NE-2022-019-00, Performance End FFY 2024 Federal Grantor Agency: U.S. Department of Transportation Criteria: Per 2 CFR § 1201.1 (January 1, 2023), the U.S. Department of Transportation adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements set forth at Title 2 CFR part 200. 2 CFR § 200.403 (January 1, 2023) requires costs to be reasonable, necessary, and adequately documented. A good internal control plan requires procedures to be in place to ensure compliance with Federal and State requirements. 2 CFR § 200.332(d) (January 1, 2023) requires the pass-through entity to do the following: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR § 200.430(i)(1) (January 1, 2023) states the following, in relevant part: 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; * * * * (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 . . . . 2 CFR § 200.431(b) (January 1, 2023) states the following, in relevant part: Leave. The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable if all of the following criteria are met: * * * * (2) The costs are equitably allocated to all related activities, including Federal awards . . . . 2 CFR § 200.467 (January 1, 2023) states the following: Costs of selling and marketing any products or services of the non-Federal entity (unless allowed under § 200.421) are unallowable, except as direct costs, with prior approval by the Federal awarding agency when necessary for the performance of the Federal award. Per 2 CFR § 200.405(a) (January 1, 2023), “A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.” Condition: The Agency lacked adequate documentation to support that payments were for allowable activities and in accordance with allowable cost principles. A similar finding was noted in the prior audit. Repeat Finding: 2022-057 Questioned Costs: $82,967 known (NE-2019-013-00 $82,121; NE-2022-019-00 $846) Statistical Sample: No Context: During the fiscal year, the Agency paid 58 subrecipients a total of $10,974,293. We selected 24 payments to subrecipients for testing. The Agency performed financial reviews for subrecipients; however, the reviews tested did not always include all necessary supporting documentation. When additional documentation was needed, we gave the Agency the opportunity to obtain additional support from the subrecipient; however, adequate support was not always obtained or able to be provided. Our random sample included an operating assistance reimbursement to North Fork Area Transit (NFAT). As identified in both the prior Single audit and a separate letter sent to the Agency, dated August 7, 2023, reimbursements for questionable expenditures were made to NFAT during the period April 1, 2022, to November 30, 2022. The former NFAT director was alleged to have committed fraud during this period. Our current testing included the reimbursement for NFAT’s August 2022 expenditures. The payment tested reimbursed NFAT $201,438 in Federal dollars. Of that amount, $78,348 was questioned, as follows: • NFAT was reimbursed $21,665 for nonoperating personnel when the timesheets supporting the time worked were all copies of the same timesheet. • NFAT was reimbursed $29,072 for operating personnel hours worked that did not appear reasonable. We noted nine employees whose hours for the four-week period were between 234.6 to 321.12 hours. This averages from 58.65 to 80.28 hours per week for each employee. Such large weekly averages give rise to concerns about not only the reasonableness and necessity of these payments but also possible compliance issues with labor standards – not to mention safety issues for riders. This was also identified in the letter dated August 7, 2023, in which employees were identified as working excessive overtime. An additional $376 was questioned, as the number of work hours for which one employee received compensation did not agree to those listed on his timesheet. • NFAT was reimbursed $12,874 for vendor payments that never appear to have cleared the bank. Invoices and checks were provided to support the maintenance expenses reimbursed; however, the checks provided never cleared the bank. This was also identified in the letter dated August 7, 2023, which noted that the Director appeared to have written the checks but not paid the vendors. • NFAT was reimbursed $14,361 for a duplicate payment. An invoice and check were provided to support the reimbursement of an insurance expense; however, this same expense was also submitted and reimbursed by the Agency in NFAT’s September 2022 request for reimbursement. We also noted issues with 12 of the 24 subrecipient payments tested, amounting to $4,619 in questioned costs, due to the following: • For eight subrecipients tested, documentation was inadequate to support that personnel charges were allowable and in accordance with Federal cost principles, resulting in questioned costs of $2,705. Specifically, we noted the following: o Payments for employee leave was not equitably allocated based on time worked. o One subrecipient had wages reimbursed based on budgeted amounts. o One subrecipient was reimbursed for health insurance for two employees who had elected to receive wages in lieu of such insurance. o One subrecipient requested reimbursement for wages that did not agree with the amount paid to employees. • For six subrecipients tested, questioned costs of $1,914 were identified due to inadequate support for capital and nonoperating costs. Questioned costs included the following: o One subrecipient was reimbursed for carpet adhesive that was later returned to the store. The subrecipient reimbursed the Director for the purchase of the carpet adhesive on her personal credit card, but the Agency was unable to identify a subsequent reimbursement request that reduced the amount sought for the returned items. Additionally, the subrecipient paid the Director for travel to another state to purchase the carpet adhesive, which not only could have been obtained from a more nearby merchant but also was ultimately returned. o Unreasonable travel reimbursements were noted. Among those was reimbursement for costs incurred by the subrecipient’s Director to travel to a meeting of an unaffiliated organization’s Board of Directors upon which she served as a member. That travel to attend a separate Board meeting was unrelated to the transit program. o A subrecipient was reimbursed for fees related to obtaining a trademark, which appears to have been a marketing expense that was not approved by the Federal awarding agency. o One subrecipient was reimbursed for an administrative fee that was not supported. The payment tested included a 7% administrative fee that was not specified in the agreement. o One subrecipient was reimbursed for unreasonable items, such as Christmas décor and Christmas candy. o One subrecipient was reimbursed for bookkeeping expenses; however, the subrecipient did not provide documentation to support that the amount allocated for that purpose was reasonable. Based on the sample tested, we estimate the potential dollars at risk for the fiscal year to be $501,670, as detailed below: See Schedule of Findings and Questioned Costs for chart/table. Cause: Procedures were inadequate to ensure that costs were in accordance with Federal requirements. Effect: Increased risk for errors or misuse of funds. Recommendation: We recommend the Agency strengthen subrecipient monitoring procedures. We further recommend the Agency improve procedures to ensure expenditures are allowable and in accordance with Federal regulations. Management Response: NDOT concurs with the findings and has revised reimbursement guidelines for subrecipients, clarifying allowed expenses and required documentation. Over the next 6-12 months, NDOT will conduct training sessions with subrecipients and collaborate with internal auditors on compliance matters. The establishment of the “Federal Oversight” unit within the Transit Section aims to improve monitoring, consistency, and compliance with federal requirements for all subrecipients.
Program: AL 21.027 – COVID-19 – Coronavirus State and Local Fiscal Recovery Funds – Allowability & Subrecipient Monitoring Grant Number & Year: SLFRP1965, March 3, 2021, through December 31, 2024 Federal Grantor Agency: U.S. Department of the Treasury Criteria: 31 CFR § 35.6(b) (July 1, 2022) states, in relevant part, the following: A recipient may use funds to respond to the public health emergency or its negative economic impacts if the use meets the criteria provided in paragraph (b)(1) of this section or is enumerated in paragraph (b)(3) of this section; provided that, in case of a use of funds for a capital expenditure under paragraph (b)(1) or (b)(3) of this section, the use of funds must also meet the criteria provided in paragraph (b)(4) of this section. Treasury may also articulate additional eligible programs, services, or capital expenditures from time to time that satisfy the eligibility criteria of this paragraph (b), which shall be eligible under this paragraph (b). (1) Identifying eligible responses to the public health emergency or its negative economic impacts. (i) A program, service, or capital expenditure is eligible under this paragraph (b)(1) if a recipient identifies a harm or impact to a beneficiary or class of beneficiaries caused or exacerbated by the public health emergency or its negative economic impacts and the program, service, or capital expenditure responds to such harm. (ii) A program, service, or capital expenditure responds to a harm or impact experienced by an identified beneficiary or class of beneficiaries if it is reasonably designed to benefit the beneficiary or class of beneficiaries that experienced the harm or impact and is related and reasonably proportional to the extent and type of harm or impact experienced. * * * * (3) A recipient may use funds to respond to the public health emergency or its negative economic impacts on a beneficiary or class of beneficiaries for one or more of the following purposes unless such use is grossly disproportionate to the harm caused or exacerbated by the public health emergency or its negative economic impacts: * * * * (ii) Responding to the negative economic impacts of the public health emergency for purposes including: * * * * (C) Assistance to nonprofit organizations including programs, services, or capital expenditures, including loans or grants to mitigate financial hardship such as declines in revenues or increased costs, or technical assistance[.] 31 CFR § 35.6(c) (July 1, 2022) states the following: A recipient may use funds to provide premium pay to eligible workers of the recipient who perform essential work or to provide grants to eligible employers that have eligible workers who perform essential work, provided that any premium pay or grants provided under this paragraph (c) must respond to eligible workers performing essential work during the COVID–19 public health emergency. A recipient uses premium pay or grants provided under this paragraph (c) to respond to eligible workers performing essential work during the COVID–19 public health emergency if: (1) The eligible worker's total wages and remuneration, including the premium pay, is less than or equal to 150 percent of the greater of such eligible worker's residing State's or county's average annual wage for all occupations as defined by the Bureau of Labor Statistics' Occupational Employment and Wage Statistics; (2) The eligible worker is not exempt from the Fair Labor Standards Act overtime provisions (29 U.S.C. 207); or (3) The recipient has submitted to the Secretary a written justification that explains how providing premium pay to the eligible worker is responsive to the eligible worker performing essential work during the COVID–19 public health emergency (such as a description of the eligible workers' duties, health, or financial risks faced due to COVID–19, and why the recipient determined that the premium pay was responsive despite the worker's higher income). 31 CFR § 35.3 (July 1, 2022) defines “premium pay,” in relevant part, as follows: Premium pay means an amount of up to $13 per hour that is paid to an eligible worker, in addition to wages or remuneration the eligible worker otherwise receives, for all work performed by the eligible worker during the COVID–19 public health emergency. Such amount may not exceed $25,000 in total over the period of performance with respect to any single eligible worker. Additionally, the “Final Rule” was released by the U.S. Department of the Treasury on January 6, 2022. The Final Rule, Section II. Eligible Uses, A. Public Health and Negative Economic Impacts, 1. General Provisions: Structure and Standards, a. Standards for Identifying a Public Health or Negative Economic Impact, Standards: Designating a Negative Economic Impact, states the following, in relevant part: (Page 4344) First, there must be a negative economic impact, or an economic harm, experienced by an individual or a class. The recipient should assess whether, and the extent to which, there has been an economic harm, such as loss of earnings or revenue, that resulted from the COVID-19 public health emergency. A recipient should first consider whether an economic harm exists and then whether this harm was caused or made worse by the COVID-19 public health emergency. * * * * Second, the response must be designed to address the identified economic harm or impact resulting from or exacerbated by the public health emergency. In selecting responses, the recipient must assess whether, and the extent to which, the use would respond to or address this harm or impact. * * * * Responses must be reasonably designed to benefit the individual or class that experienced the negative economic impact or harm. Uses of funds should be assessed based on their responsiveness to their intended beneficiary and the ability of the response to address the impact or harm experienced by that beneficiary. Responses must also be related and reasonably proportional to the extent and type of harm experienced. The Final Rule, Section II. Eligible Uses, A. Public Health and Negative Economic Impacts, 3. Negative Economic Impacts, c. Assistance to Nonprofits, states the following, in relevant part: (Page 4380) The interim final rule provided for, and the final rule maintains, the ability for recipients to provide direct assistance to nonprofits that experienced public health or negative economic impacts of the pandemic. Specifically, recipients may provide direct assistance to nonprofits if the nonprofit has experienced a public health or negative economic impact as a result of the pandemic. For example, if a nonprofit organization experienced impacts like decreased revenues or increased costs (e.g., through reduced contributions or uncompensated increases in service need), and a recipient provides funds to address that impact, then it is providing direct assistance to the nonprofit as a beneficiary under Subsection (c)(1) of Sections 602 and 603. Direct assistance may take the form of loans, grants, in-kind assistance, technical assistance, or other services that respond to the negative economic impacts of the COVID–19 public health emergency. The Final Rule, Section II. Eligible Uses, A. Public Health and Negative Economic Impacts, 4. General Provisions: Other, a. Public Sector Capacity and Workforce, states the following, in relevant part: (Page 4386) The final rule allows for an expanded set of eligible uses to restore and support public sector employment. Eligible uses include hiring up to a pre-pandemic baseline that is adjusted for historic underinvestment in the public sector, providing additional funds for employees who experienced pay cuts or were furloughed, avoiding layoffs, providing worker retention incentives, and paying for ancillary administrative costs related to hiring. * * * * The final rule provides two options to restore pre-pandemic employment, depending on recipient’s needs. Under the first and simpler option, recipients may use SLFRF funds to rehire staff for pre-pandemic positions that were unfilled or were eliminated due the pandemic without undergoing further analysis. Under the second option, the final rule provides recipients an option to hire above the pre-pandemic baseline, by adjusting the pre-pandemic baseline for historical growth in public sector employment over time, as well as flexibility on roles for hire. * * * * To pursue the second option, recipients should undergo the analysis provided below. In short, this option allows recipients to pay for payroll and covered benefits associated with the recipient increasing its number of budgeted full-time equivalent employees (FTEs) up to 7.5 percent above its pre-pandemic employment baseline, which adjusts for the continued underinvestment in state and local governments since the Great Recession. * * * * Funds may be used to maintain current compensation levels, with adjustments for inflation, in order to prevent layoffs that would otherwise be necessary. Recipients must be able to substantiate that layoffs were likely in the absence of SLFRF funds and would be substantially due to the public health emergency or its negative economic impacts (e.g., fiscal pressures on state and local budgets) and should document their assessment. * * * * Funds may be used to provide worker retention incentives, which are designed to persuade employees to remain with the employer as compared to other employment options. Recipients must be able to substantiate that the employees were likely to leave employment in the absence of the retention incentive and should document their assessment. * * * * All worker retention incentives must be narrowly tailored to need and should not exceed incentives traditionally offered by the recipient or compensation that alternative employers may offer to compete for the employees. Further, because retention incentives are intended to provide additional incentive to remain with the employer, they must be entirely additive to an employee’s regular rate of wages and other remuneration and may not be used to reduce or substitute for an employee’s normal earnings. Treasury will presume that retention incentives that are less than 25 percent of the rate of base pay for an individual employee or 10 percent for a group or category of employees are reasonably proportional to the need to retain employees, as long as the other requirements are met. The Final Rule, Section II. Eligible Uses, A. Public Health and Negative Economic Impacts, 4. General Provisions: Other, b. Capital Expenditures, Overview of General Standards, states the following, in relevant part: (Page 4391) Large capital expenditures intended for general economic development or to aid the travel, tourism, and hospitality industries—such as convention centers and stadiums—are, on balance, generally not reasonably proportional to addressing the negative economic impacts of the pandemic, as the efficacy of a large capital expenditure intended for general economic development in remedying pandemic harms may be very limited compared to its cost. The Final Rule, Footnote 230, states the following, in relevant part: (Page 4379) Ultimately, recipients must comply with the eligible use requirements and any other applicable laws or requirements and are responsible for the actions of their subrecipients or beneficiaries. Per 2 CFR § 1000.10 (January 1, 2023), “[T]he Department of the Treasury adopts the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth at 2 CFR part 200.” 2 CFR § 200.332 (January 1, 2023) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR § 200.430(i)(1) (January 1, 2023) states, in relevant part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: * * * * (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR § 200.303 (January 1, 2023) states, in relevant part, the following: The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR § 200.403 (January 1, 2023), costs must be necessary, reasonable, and adequately documented. Good internal control and sound business practices requires procedures for ensuring that: 1) grants issued to beneficiaries are reasonable and proportional to the harm identified; 2) premium pay is correctly calculated; and 3) all expenditures of funds are for allowable purposes. Condition: The State lacked procedures for ensuring that grants issued to beneficiaries for worker retention and incentives were used for such purposes. The State lacked both procedures and the requisite knowledge to ensure that the premium charged to the grant was allowable. The State lacked procedures to ensure that grants to nonprofits were proportional to the negative economic harm incurred. The State lacked subrecipient monitoring procedures. The State possibly made fraudulent payments under the State’s nursing scholarship program. Repeat Finding: No Questioned Costs: $23,452,594 Known Statistical Sample: No Context: We noted the following: Payments to Developmental Disability Providers, Assisted-Living Facilities, and Nursing Facilities for Employee Retention and Recruitment Nebraska Legislative Bill (LB) 1014 (2022), section 23, appropriated $20,000,000 from the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) grant to the Department of Health and Human Services (DHHS) for state fiscal year 2023 to be used for Developmental Disability (DD) provider rate increases for the purpose of enhancing employee retention and recruitment at the DD providers. DHHS implemented a 9% rate increase for select DD services in state fiscal year 2023. During the fiscal year, DD claims were paid out using State and Federal funds in accordance with the applicable Federal matching percentage (FMAP). In June 2023, DHHS made a journal entry to transfer $19,995,679 in expenditures from the State and Federal General Funds to the CSLFRF grant in accordance with the FMAP rates. LB 1014, section 27, appropriated $5,462,800 from the CSLFRF grant to DHHS for State fiscal year 2023 to be paid out to assisted-living facilities for the following: 1) “Incentives for staff members employed by the licensed assisted-living facility in order to enhance employee recruitment and retention”; and 2) “Assistance with costs for supplies and equipment purchased by the licensed assisted-living facility.” DHHS paid out $5,068,000 to assisted-living facilities during state fiscal year 2023. LB 1014, section 28, appropriated $20,000,000 from the CSLFRF grant to DHHS for state fiscal year 2023 to be paid out to Medicaid-certified nursing facilities. The funds were to be used to provide supplemental incentive payments for direct care staff members employed at the nursing facilities. DHHS paid out $20,000,000 to nursing facilities during state fiscal year 2023. During a testing of a random sample of 25 CSLFRF payments, we tested seven payments to nursing facilities, totaling $1,304,915. We asked for documentation of how DHHS ensured that the payments were used for allowable employee retention and recruitment programs, and for any documented assessments that were required by the Final Rule for worker incentive programs. According to DHHS, the funds were paid out in accordance with the requirements of LB 1014; however, DHHS acknowledged lacking procedures to ensure that the beneficiaries were using the funds for eligible recruitment and retention purposes. Additionally, DHHS failed to provide the required documented assessments per the Final Rule. Given the lack of procedures to support that funds were being used for allowable purposes, all seven payments of the $1,304,915 tested are considered questioned costs. Additionally, the entire $20,000,000 paid out during the fiscal year are considered potential dollars at risk. Additionally, we tested one $110,400 payment to an assisted-living facility under LB 1014, Section 27. Similar to the nursing facility payments tested, DHHS lacked procedures for ensuring that the assisted-living facilities were using the funds for eligible recruitment and retention purposes. Therefore, the $110,400 payment tested is considered a questioned cost. Lastly, we tested the journal entries transferring $19,995,679 in expenditures to the CSLFRF grant for DD provider rate increases. Again, DHHS lacked procedures for ensuring that the DD providers were using the funds for eligible recruitment and retention purposes. Therefore, the journal entries tested for $19,995,679 are considered questioned costs. We also noted that, due to an oversight error, one nursing facility that had certified Medicaid beds did not receive its proportional allocation of $43,138. Instead, that amount was split among the other nursing facilities that received payments. Premium Pay LB 1014, section 12, appropriated $3,546,602 to the Department of Veterans’ Affairs (DVA) from the CSLFRF grant to be used for premium pay. In September 2022, the DVA posted journal entries to move payroll costs of $3,546,602 to the CSLFRF grant. However, we noted that the DVA did not review the premium pay eligibility requirements, which resulted in the following errors: • The DVA moved $357,039 of payroll costs associated with individuals who had earnings of more than 150% of the applicable average wage for all occupations and were not exempt from the Fair Labor Standards Act overtime provisions, which is not allowable. • $145,205 of the payroll costs moved were for premium pay that exceeded $25,000 per person, which is not allowable. • The DVA moved payroll costs that were not for premium pay and were not in addition to wages the workers were already receiving. From a detail test of 25 employees, $371,683 out of $585,901 of payroll costs were not related to premium pay. After the errors noted above were communicated to the DVA, the DVA recalculated the amount to charge the CSLFRF grant for premium pay, and the DVA calculated that only $1,518,092 should have been charged to the CSLFRF grant. We verified that, for the 25 employees previously tested, the DVA’s revised calculation agreed to our calculation. We verified also that the DVA’s revised calculation excluded individuals whose wages exceeded 150% of the applicable average wage for all occupations, and premium pay was capped at $25,000 for each employee. Therefore, the $2,028,510 difference between the $3,546,602 charged to the grant and the revised calculation of $1,518,092 is considered a questioned cost. Assistance to Nonprofits LB 1014, section 46, appropriated $100,000,000 to the Department of Economic Development (DED) from the CSLFRF grant to be used to provide grants to qualified nonprofit organizations to assist with capital projects that have been delayed due to COVID-19. In order to receive a grant, a nonprofit had to submit a grant application attesting to have experienced negative economic harm due to the public health emergency. During our testing, we noted that DED did not require nonprofits to submit documentation to substantiate having experienced a negative economic impact due to the pandemic that was equivalent or reasonably proportional to the grant award. We also noted that, for two of the nonprofit payments selected for testing, the two nonprofits received grant awards of $12,664,600 each to be used solely for the purpose of construction and development of sports complexes for competitive sports and economic growth. Per the CSLFRF Final Rule, large capital projects intended for general economic growth are not generally proportional responses to negative harm. Therefore, if the nonprofits had not suffered an economic harm due to COVID-19, these projects would otherwise not be an eligible use of CSLFRF funds. We gave DED the opportunity to obtain documentation from the nonprofits to support that they experienced a negative economic impact proportional to the amount awarded. In all instances, DED was able to obtain documentation substantiating the negative economic harm in excess of the grant amounts awarded. University of Nebraska The University of Nebraska (University) was awarded $86,650,000 in a subaward to be used for a number of projects, including increasing the capacity of behavioral health care and rural health care. To monitor this subaward, the Military Department (Military) received and reviewed reports from the University and would have monthly meetings to discuss updates and whether deadlines were being met. Military stated that, beyond these monthly meetings, there were no planned procedures for reviewing any expenditures to ensure they were for allowable purposes and met the requirements of the Uniform Guidance, which is set out under 2 CFR Part 200 to establish uniform administrative requirements, cost principles, and audit requirements for Federal awards to non-Federal entities. We selected one CSLFRF expenditure recorded by the University. The payment was for $116,670 and made to a subrecipient of the University. The subrecipient was a behavioral health provider and was used to increase telehealth capacity. During review of supporting documentation, we noted that adequate documentation was not on file to support the salary and fringe benefits charged to the CSLFRF grant for the two subrecipient employees tested. The employees’ salary and fringe benefits had been allocated to the CSLFRF grant based on historical data and “prior experience with similar programs.” As noted in 2 CFR § 200.430(h)(8)(viii), however, “Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards . . . .” Consequently, we consider the $8,090 in salary and benefits charged for the two employees to be questioned costs. The total salary and fringe benefits reimbursed on the payment tested amounted to $29,277. Nursing Scholarships During testing procedures, DHHS reported to us $5,000 in payments that were made due to fraudulent nursing scholarship applications submitted to, and accepted by, DHHS. Per DHHS’s subsequent review, the applicant fraudulently claimed on her application that she was enrolled in a nursing program during the spring and summer 2023 terms. DHHS has reported this to the U.S. Department of the Treasury. These $5,000 payments are considered questioned costs. Cause: The State had inadequate procedures to ensure that the grant was used for allowable purposes, and staff had inadequate knowledge of the requirements of the CSLFRF. Effect: Without adequate supporting documentation and review procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the State strengthen procedures for ensuring that all Federal funds are used for intended and allowable purposes. We further recommend that the State take steps to recoup any payments for which either the beneficiary cannot support the proper use of the grant funds received or to the economic harm experienced. Management Response: Payments to Developmental Disability Providers, Assisted-Living Facilities, and Nursing Facilities for Employee Retention and Recruitment: Department of Health and Human Services (DHHS) disagrees with questioned costs of $21,410,994 ($1,304,915 Nursing Facilities, $110,400 Assisted Living Facilities, $19,995,679 Developmental Disabilities Providers). Payments made to Developmental Disability Providers, Assisted-Living Facilities, and Nursing Facilities followed federal regulations and were accurately distributed as directed by the legislature and signed legislation, LB1014. Payments to each facility were based on approved amounts in the legislative bill. In addition, DHHS properly passed requirements and regulatory information on to the providers. DHHS issued the following guidance document (as required by the legislation as well) https://dhhs.ne.gov/Grants%20and%20Contract%20Opportunity%20Docs/LB1014%20Guidance%20Document_DHHS%20DL%206-13-22.pdf#search=LB1014. If DHHS becomes aware of known unallowable activities, we will recoup applicable funds. Premium Pay: As noted in the Auditors Comments, NDVA made the necessary corrections to their workbooks to comply with these guidelines. However, the amounts reflected in the Auditors comments were only for eligible expenses through September of 2022 and did not take into consideration the entire Fiscal Year 2023. NDVA’s eligible expenses as of June 30, 2023, were $3,695,625, which exceeded the $3,546,602 appropriated in LB 1014 by approximately $148,460. Assistance to Nonprofits: DED acknowledges that with respect to its American Rescue Plan Act Shovel-Ready program in some cases it did not collect sufficient documentation to show the nonprofit organization suffered an economic harm related to and reasonably proportionate to DED’s award. University of Nebraska: NEMA continues to monitor the University of Nebraska (University) subaward through the review of reports and monthly progress meetings. APA Response: Per the CSLFRF final rule, the recipient, which is the State, must comply with the eligible use requirements and is ultimately responsible for the actions of its beneficiaries. No documentation was provided to support that the funds granted to Developmental Disability Providers, Assisted-Living Facilities, and Nursing Facilities were spent on allowable retention and recruitment efforts or that any applicable pre-analysis required by the CSLFRF final rule was completed. The journal entry prepared by NDVA was done in September 2022. It covers the premium pay given in November 2021 to June 2022. We were not provided a spreadsheet with updated calculations, nor did the Agency make any adjustments in the accounting system to show this as an offset of fiscal year 2023 expenses.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2023-004 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): 2021-2022, 2022-2023 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context A cash reimbursement is provided to the School Corporation based on meals served under the School Breakfast Program, National School Lunch Program, and Summer Food Service Program for Children. The cash reimbursement is to be used for the benefit of the food service program. The School Corporation had not properly designed or implemented a system of internal controls, which would include appropriate segregation of duties, that would likely be effective in preventing, or detecting and correcting, noncompliance. There was no documented internal control in place over payroll claims to ensure that payroll charged to the grant was reviewed and approved by an individual knowledgeable about the cost principles. In addition, pay rates could not be tied directly to the salary ordinance for 4 of the 40 payroll payments tested. Timecards were provided which substantiated the hours worked; however, the hourly rate at which the employees were paid could not be tied to the salary ordinance or other internal records provided. The hourly rates paid to these four employees did not differ significantly from the rates documented in the salary ordinances. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 22 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 7 CFR 220.7(e) states in part: ". . . the School Food Authority shall, with respect to participating schools under its jurisdiction: . . . (1) (i) Maintain a nonprofit school food service; (ii) . . . use all revenues received by such food service only for the operation or improvement of that food service . . ." 7 CFR 225.15(a)(1) states: "Sponsors shall operate the food service in accordance with: the provisions of this part; any instructions and handbooks issued by FNS under this part; and any instructions and handbooks issued by the State agency which are not inconsistent with the provisions of this part." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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. . . ." INDIANA STATE BOARD OF ACCOUNTS 23 COMMUNITY SCHOOLS OF FRANKFORT SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause A proper system of internal controls was not designed by management of the School Corporation, which would include segregation of key functions. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper design or implementation of the components of a system of internal controls, including policies and procedures that provide segregation of duties and additional oversight as needed, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payroll disbursements identified above could not be tied to an approved salary. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that management of the School Corporation design and implement a proper system of internal controls, including policies and procedures that would ensure that employees charged to the grant are paid the approved rate of pay. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2023-004 - Written Policies Required by the Uniform Grant Guidance Finding Type. Immaterial Noncompliance; Significant Deficiency in Internal Controls over Compliance. Federal program(s) U.S. Environmental Protection Agency - Clean Water State Revolving Fund (ALN 66.458); Passed through the Michigan Department of Energy, Great Lakes, and Environment; All project numbers Criteria. The Uniform Guidance requires a non‐federal entity that has expended federal awards for a grant awarded on or after December 26, 2014 to have written policies pertaining to: 1) Payments (draws of federal funds and how to minimize the time lapsing between the receipt of federal funds and the disbursement to contractors/employees/subrecipients) (§200.302(6)); 2) Procurement (including bidding and a conflict of interest policy) (§200.318); 3) Allowability of costs charged to federal programs (§200.302(7)); 4) Compensation (personnel and benefits policy) (§200.430 and §200.431); and 5) Travel costs (including mileage and per diem) (§200.474). Condition. Although the City has processes in place to cover these areas, there are no formal written policies covering payments, procurement, allowability of costs, compensation, and travel costs in accordance with the Uniform Guidance. Cause. This condition is a result of the City’s limited resources. Effect. As a result of this condition, the City was exposed to increased risk that grant requirements under 2 CFR 200 would not be followed. Questioned Costs. No costs were questioned as a result of this finding. Recommendation. We recommend that the City develop and implement the required policies as soon as practical. View of Responsible Officials. A written policy was developed and implemented in February 2024 that meets the requirements under Federal guidance. Responsible Official. Director of Finance and Administration Estimated Completion Date. February 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of Veterans Affairs, Department of Health and Human Services Federal Program Name: VA Supportive Services for Veteran Families Program, Unaccompanied Alien Children Program Assistance Listing Number: 64.033, 93.676 Federal Award Identification Number and Year: 20-WA-146-2023, 90ZU0386-3-0-2022, 90ZU0386-3-0-2023 Pass-Through Agency: United States Conference of Catholic Bishops Award Period: October 1, 2020, to September 30, 2023, January 1, 2022, to December 31, 2022, January 1, 2023, to December 31, 2023 Criteria or specific requirement: Under the standards for documentation of personnel expenses, 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, 2 CFR 200.430(i)(1)(vii) indicates that these records must: "Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and a non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity". Condition: During testing it was discovered that employees in CCS’s payroll software (ADP) were not being consistently set up to accurately track hours worked per the timesheets to their associated job cost centers. Hours tracked to the major program are sometimes erroneously split-up between the "home department" and the major program cost center. The opposite is also sometimes true in that hours worked under the "home department" are erroneously split between the home department and the major program cost centers, even though those hours were not worked on the major program. This error appears to occur on an employee-by-employee basis, based on the setup of the individual employee. Discussion with management indicates that this error is limited to the SW division and only occurs if an employee has a home department that is a non-holding account. Questioned costs: None Context: (64.033) A sample of 40 was made from a population of 1,044 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 1 was found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. (93.676) A sample of 40 was made from a population of 926 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 7 were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. Cause: There is a misunderstanding on how employees and cost centers must be set up in ADP in order to achieve the desired allocation splits. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: CLA recommends that those charged with establishing new employees in ADP receive an updated training on the correct setup steps to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. CCS has already implemented a fix going forward and is currently assessing the cumulative error for the year under audit. Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of Veterans Affairs, Department of Health and Human Services Federal Program Name: VA Supportive Services for Veteran Families Program, Unaccompanied Alien Children Program Assistance Listing Number: 64.033, 93.676 Federal Award Identification Number and Year: 20-WA-146-2023, 90ZU0386-3-0-2022, 90ZU0386-3-0-2023 Pass-Through Agency: United States Conference of Catholic Bishops Award Period: October 1, 2020, to September 30, 2023, January 1, 2022, to December 31, 2022, January 1, 2023, to December 31, 2023 Criteria or specific requirement: Under the standards for documentation of personnel expenses, 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, 2 CFR 200.430(i)(1)(vii) indicates that these records must: "Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and a non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity". Condition: During testing it was discovered that employees in CCS’s payroll software (ADP) were not being consistently set up to accurately track hours worked per the timesheets to their associated job cost centers. Hours tracked to the major program are sometimes erroneously split-up between the "home department" and the major program cost center. The opposite is also sometimes true in that hours worked under the "home department" are erroneously split between the home department and the major program cost centers, even though those hours were not worked on the major program. This error appears to occur on an employee-by-employee basis, based on the setup of the individual employee. Discussion with management indicates that this error is limited to the SW division and only occurs if an employee has a home department that is a non-holding account. Questioned costs: None Context: (64.033) A sample of 40 was made from a population of 1,044 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 1 was found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. (93.676) A sample of 40 was made from a population of 926 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 7 were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. Cause: There is a misunderstanding on how employees and cost centers must be set up in ADP in order to achieve the desired allocation splits. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: CLA recommends that those charged with establishing new employees in ADP receive an updated training on the correct setup steps to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. CCS has already implemented a fix going forward and is currently assessing the cumulative error for the year under audit. Views of responsible officials: There is no disagreement with the audit finding.
Type of Finding: Significant Deficiency in Internal Control over Compliance Federal Agency: Department of Veterans Affairs, Department of Health and Human Services Federal Program Name: VA Supportive Services for Veteran Families Program, Unaccompanied Alien Children Program Assistance Listing Number: 64.033, 93.676 Federal Award Identification Number and Year: 20-WA-146-2023, 90ZU0386-3-0-2022, 90ZU0386-3-0-2023 Pass-Through Agency: United States Conference of Catholic Bishops Award Period: October 1, 2020, to September 30, 2023, January 1, 2022, to December 31, 2022, January 1, 2023, to December 31, 2023 Criteria or specific requirement: Under the standards for documentation of personnel expenses, 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, 2 CFR 200.430(i)(1)(vii) indicates that these records must: "Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and a non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity". Condition: During testing it was discovered that employees in CCS’s payroll software (ADP) were not being consistently set up to accurately track hours worked per the timesheets to their associated job cost centers. Hours tracked to the major program are sometimes erroneously split-up between the "home department" and the major program cost center. The opposite is also sometimes true in that hours worked under the "home department" are erroneously split between the home department and the major program cost centers, even though those hours were not worked on the major program. This error appears to occur on an employee-by-employee basis, based on the setup of the individual employee. Discussion with management indicates that this error is limited to the SW division and only occurs if an employee has a home department that is a non-holding account. Questioned costs: None Context: (64.033) A sample of 40 was made from a population of 1,044 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 1 was found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. (93.676) A sample of 40 was made from a population of 926 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 7 were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. Cause: There is a misunderstanding on how employees and cost centers must be set up in ADP in order to achieve the desired allocation splits. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: CLA recommends that those charged with establishing new employees in ADP receive an updated training on the correct setup steps to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. CCS has already implemented a fix going forward and is currently assessing the cumulative error for the year under audit. Views of responsible officials: There is no disagreement with the audit finding.
2023-004: Lack of Payroll Documentation Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system. Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files. Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions. Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete. Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
2023-004: Lack of Payroll Documentation Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system. Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files. Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions. Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete. Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
2023-004: Lack of Payroll Documentation Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During our audit, we noticed multiple employees' approved pay rates were not retained or did not agree with the actual amount paid and recorded in accounting system. Cause – Procedure in place was not followed to ensure that all wage rates get approvals and are documented in employee personnel files. Effect – Employees may be paid using an inappropriate rate or using a rate that is disputed by the employee or employer. Salaries or wages may be overcharged or undercharged to grant if pay rates are not documented. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Employee’s actual pay rate did not agree or was not supported by approved pay rate for 19 transactions. Recommendation – We recommend the management review personnel files to ensure all required documentation is retained and accurate. We also recommend management review and update policies and procedures to ensure responsibilities are clear and future files are complete. Auditee’s comments and response – Management will review policies and procedures to ensure information is complete and up-to-date. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
2023-005: Payroll Timecard Approval Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Compliance and Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented. Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals. Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions. Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual. Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
2023-005: Payroll Timecard Approval Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Compliance and Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented. Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals. Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions. Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual. Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
2023-005: Payroll Timecard Approval Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 and 93.939 Compliance and Internal Controls Significant Deficiency Category of Finding – Allowable Costs/ Cost Principles Criteria – 2 CFR § 200.430 requires that compensation for individual employees be reasonable for the services rendered, be consistently applied to both federal and non-federal activities, follows all of the Organizations written policies, and is adequately documented. Adequately documented as defined by the standard requires the charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition – During testing, we noticed multiple timecards not approved by the responsible individual so the required supervisors’ review of the timecard for accurate hours and allocations did not occur and was not documented. Cause – Controls in place did not operate as designed so hours charged to the grant were not properly reviewed for accuracy by responsible individuals. Effect – Salaries or wages may be overcharged or undercharged to grant if program allocation is not documented. If the granting agency ever questioned costs, IPTF may not be able to prove that all the funds requested for reimbursement from the agency were for activities allowed under the grant. Context – A nonstatistical sample of 30 payroll transactions were selected for testing. Timecard approval was missing or performed by an unauthorized individual for 7 transactions. Recommendation – We recommend the management implement and enforce a review process to ensure all timecards are reviewed by responsible individual. Auditee’s comments and response – Management will review policies and procedures to ensure all timecards are reviewed by responsible individual. Responsible party for corrective action: Sharon Day, Executive Director Repeat finding – No
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Significant Deficiency 2023-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Title I Grants to Local Educational Agencies ALN: 84.010A English Language Acquisition State Grants ALN: 84.365 Education Stabilization Funds (ESF) COVID-19: American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) ALN: 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430. Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” The documentation should support the distribution of the employee’s compensation among specific activities if the employee works on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District PAR forms were either not available, or did not accurately reflect the allocation or the grant that the employee was charged to in order to comply with Subpart I, 2 CFR §200.430. Cause: Employee PAR forms should accurately reflect the time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some PAR forms, maintained by the Payroll Department, were not on file for certain employees, there were a few instances of PAR forms not indicating the correct federal program that the employee was charged to, and there were some instances where the PAR form allocation of payroll was not correctly charged to the specific federal grant. See Context below for more specifics. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards. Questioned Costs: None reported. Context: For the Education Stabilization Funds (ESF) grant, based on a total payroll population size of sixty-eight (68) employees, an audit sample of eleven (11) employees was selected based on a higher risk assessment of 15%. Of the eleven (11) employees sampled, we noted that two (2) employees did not have PAR forms on file, and three (3) employees PAR forms did not have the ESF federal program on them to indicate that the employee was charged to the ESF grant, and two (2) employees PAR forms indicated certain allocations to be charged to another grant; however, these allocation amounts were charged to the ESF grant. For the Title I grant, based on a total population size of thirty-eight (38) employees, an audit sample of four (4) employees was selected based on a lower risk assessment of 10%. Of the four (4) samples selected, we noted that two (2) employee’s PARs did not have the Title I program on them to indicate that the employee was charged to the Title I grant. For the English Language Acquisition State Grants, based on a total population of five (5) employees, an audit sample of one (1) employee was selected based on a lower risk assessment of 10%. On that sample selection of one (1), we noted that the employee’s PAR did not have the English Language Acquisition State Grants program on it to indicate that the employee was charged to that grant. Recommendation: The District should prepare the appropriate documentation to support salaries and wages determined by services performed that are charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District should ensure that all PAR forms properly reflect the grant that the employee is charged to in order to support the request for reimbursement under that grant. Views of Responsible Officials of Auditee: The District will properly review and maintain the federal personnel activity reports to ensure the employee’s salary, or other form of compensation, is correctly coded to the grant and the form accurately reflects the federal program in which the employee’s earnings were allocated to support the compliance with Subpart I, 2 CFR §200.430.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Entity: Illinois Department of Human Services Pass-Through Number: 43CBC03483 and 43CBZ03223 Award Periods: July 1, 2022 – June 30, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: 2 CFR 200.430 indicates that compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal Award. Condition: The Organization used an incorrect payroll amount when coding employee payroll expense to the grant causing the expenditures charged to the grant to be overstated. Questioned Costs: $4,555 Context: Two of forty transactions selected for testing. Cause: Oversight Effect: The Organization may draw down funding for a greater amount than expenses they have incurred. Repeat Finding: No. Recommendation: Management should refine its process for tracking costs and charging costs to grants and look for opportunities to automat the process and reduce manual involvement, which creates an opportunity for error. Views of Responsible Officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Pass-Through Entity: Illinois Department of Human Services Pass-Through Number: 43CBC03483 and 43CBZ03223 Award Periods: July 1, 2022 – June 30, 2023 Type of Finding: Immaterial Noncompliance and Significant deficiency in internal control over compliance Criteria: 2 CFR 200.430 indicates that compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal Award. Condition: The Organization used an incorrect payroll amount when coding employee payroll expense to the grant causing the expenditures charged to the grant to be overstated. Questioned Costs: $4,555 Context: Two of forty transactions selected for testing. Cause: Oversight Effect: The Organization may draw down funding for a greater amount than expenses they have incurred. Repeat Finding: No. Recommendation: Management should refine its process for tracking costs and charging costs to grants and look for opportunities to automat the process and reduce manual involvement, which creates an opportunity for error. Views of Responsible Officials: There is no disagreement with the audit finding.
REFERENCE: 2023-101 CFDA NUMBER 84.425D – COVID 19 – EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 QUESTIONED COSTS N/A CONDITION For the only employee paid under the School Safety Grant, the two semi-annual certifications for the employee did not cover the time period for wages charged to the grant. The certifications covered the school year period of July 18, 2022 to May 26, 2023, rather than the fiscal year period of July 1, 2022 through June 30, 2023. Additionally, although the certifications were signed by a supervisor, the date of review was not documented. Alternative procedures were performed to ensure that the costs were allowable to the program. CRITERIA In accordance with 2 CFR, Subtitle A, Chapter II, Part 200, Subpart E General Provisions for Selected Items of Cost, §200.430(i), (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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 OMB Compliance Supplement, Part 6 – Internal Control, The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. EFFECT Distribution of the employee's salary or wages among specific activities or cost objectives was not properly documented and did not agree actual activities incurred. CAUSE Although internal controls were properly designed, there were deficiencies in the execution of the controls. RECOMMENDATION AND BENEFIT Semi-annual certifications and time and effort logs, should be reviewed to ensure that the time periods spent on the federal programs support the expenditures charged to the grant. Additionally, the certifications and logs should be reviewed to ensure that they are properly signed and dated by a supervisor. This will help ensure compliance with federal requirements and only allowable costs are charged to the program. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
REFERENCE: 2023-101 CFDA NUMBER 84.425D – COVID 19 – EDUCATION STABILIZATION FUND U.S. DEPARTMENT OF EDUCATION – 2023 PASSED THROUGH ARIZONA STATE DEPARTMENT OF EDUCATION GRANT NUMBER: S425D210038 QUESTIONED COSTS N/A CONDITION For the only employee paid under the School Safety Grant, the two semi-annual certifications for the employee did not cover the time period for wages charged to the grant. The certifications covered the school year period of July 18, 2022 to May 26, 2023, rather than the fiscal year period of July 1, 2022 through June 30, 2023. Additionally, although the certifications were signed by a supervisor, the date of review was not documented. Alternative procedures were performed to ensure that the costs were allowable to the program. CRITERIA In accordance with 2 CFR, Subtitle A, Chapter II, Part 200, Subpart E General Provisions for Selected Items of Cost, §200.430(i), (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (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 OMB Compliance Supplement, Part 6 – Internal Control, The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. EFFECT Distribution of the employee's salary or wages among specific activities or cost objectives was not properly documented and did not agree actual activities incurred. CAUSE Although internal controls were properly designed, there were deficiencies in the execution of the controls. RECOMMENDATION AND BENEFIT Semi-annual certifications and time and effort logs, should be reviewed to ensure that the time periods spent on the federal programs support the expenditures charged to the grant. Additionally, the certifications and logs should be reviewed to ensure that they are properly signed and dated by a supervisor. This will help ensure compliance with federal requirements and only allowable costs are charged to the program. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number: H80CS00824-21-00; H80CS00824-22-00; H8FCS41534-01-02 Award Periods: May 1, 2022 – April 30, 2023; May 1, 2023 – April 30, 2024; April 1, 2021 – March 31, 2023, respectively Type of Finding: Compliance and material weakness in internal control over compliance Criteria: A grantee's system of internal control should include processes to review after-the-fact interim charges made to a Federal award based on budget estimates. 45 CFR 75.430(i)(1). In addition, CFR 200.430 indicates costs of compensation are allowable to the extent that they satisfy the specific requirement of determining and supporting the salary and wages based on records that accurately reflect the work performed. Salaries and wages charged to a grant should be tagged/identified by employee to ensure expenses are not counted or charged twice. Condition: The Organization did not verify that the wages being charged to the grant were consistent with the amount paid to employees. The internal controls over compliance were not properly set up to identify this until the audit testing was complete. In addition, the organization had inconsistent methods of tracking wages being charged to federal grants. Records were not kept consistently to support how employee wages were identified prior to drawdowns being submitted. Questioned Costs: As a result of our audit procedures, we identified questioned costs in the amount of $977 related to the Organization charging wages in excess of the amount actually paid to the employee. Context: One (1) of forty (40) transactions Cause: The organization had inconsistent methods of tracking salaries and wages charged to the grant and did not verify that the wages charged to the grant matched what was incurred by the Organization and paid to the employee. Effect: The Organization may inadvertently over charge the grant for wages that were not incurred or paid to employees. Repeat Finding: No. Recommendation: We recommend the Organization implement a comprehensive and thorough process to review all wages charged to federal and state grant prior to initiating a drawdown request or submitting a reimbursement request to the grantor. As part of this, the Organization should implement a consistent process for identifying the specific employees and wages being charged to each grant.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number: H80CS00824-21-00; H80CS00824-22-00; H8FCS41534-01-02 Award Periods: May 1, 2022 – April 30, 2023; May 1, 2023 – April 30, 2024; April 1, 2021 – March 31, 2023, respectively Type of Finding: Compliance and material weakness in internal control over compliance Criteria: A grantee's system of internal control should include processes to review after-the-fact interim charges made to a Federal award based on budget estimates. 45 CFR 75.430(i)(1). In addition, CFR 200.430 indicates costs of compensation are allowable to the extent that they satisfy the specific requirement of determining and supporting the salary and wages based on records that accurately reflect the work performed. Salaries and wages charged to a grant should be tagged/identified by employee to ensure expenses are not counted or charged twice. Condition: The Organization did not verify that the wages being charged to the grant were consistent with the amount paid to employees. The internal controls over compliance were not properly set up to identify this until the audit testing was complete. In addition, the organization had inconsistent methods of tracking wages being charged to federal grants. Records were not kept consistently to support how employee wages were identified prior to drawdowns being submitted. Questioned Costs: As a result of our audit procedures, we identified questioned costs in the amount of $977 related to the Organization charging wages in excess of the amount actually paid to the employee. Context: One (1) of forty (40) transactions Cause: The organization had inconsistent methods of tracking salaries and wages charged to the grant and did not verify that the wages charged to the grant matched what was incurred by the Organization and paid to the employee. Effect: The Organization may inadvertently over charge the grant for wages that were not incurred or paid to employees. Repeat Finding: No. Recommendation: We recommend the Organization implement a comprehensive and thorough process to review all wages charged to federal and state grant prior to initiating a drawdown request or submitting a reimbursement request to the grantor. As part of this, the Organization should implement a consistent process for identifying the specific employees and wages being charged to each grant.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster (R&D), Small Business Development Centers (SBDC), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - R&D - All ALN's SBDC - SBAHQ21B0057, SBAHQ22B0059, SBAOEDSB230049, SBAHQ20C0031 ELC - NU50CK000510 Pass through Entity - R&D - Various SBDC - None ELC - Michigan Department of Health and Human Services and Kent County Health Department Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed including complying with established accounting policies and practices of the University. Per the University's policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair or Dean) of the work performed approximately 30 days after each reporting period. Condition - Of the 10 employees included within the hourly payroll expenditure sample selected for testing in the Research and Development Cluster, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 10 employees. Of the 14 employees included within the hourly payroll expenditure sample selected for testing in the Small Business Development grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for 7 employees. Of the 8 employees included within the hourly payroll expenditure sample selected for testing in the Epidemiology and Laboratory Capacity for Infectious Diseases grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 8 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 25 of the total 32 employees tested in these three programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control in place to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster (R&D), Small Business Development Centers (SBDC), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - R&D - All ALN's SBDC - SBAHQ21B0057, SBAHQ22B0059, SBAOEDSB230049, SBAHQ20C0031 ELC - NU50CK000510 Pass through Entity - R&D - Various SBDC - None ELC - Michigan Department of Health and Human Services and Kent County Health Department Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed including complying with established accounting policies and practices of the University. Per the University's policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair or Dean) of the work performed approximately 30 days after each reporting period. Condition - Of the 10 employees included within the hourly payroll expenditure sample selected for testing in the Research and Development Cluster, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 10 employees. Of the 14 employees included within the hourly payroll expenditure sample selected for testing in the Small Business Development grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for 7 employees. Of the 8 employees included within the hourly payroll expenditure sample selected for testing in the Epidemiology and Laboratory Capacity for Infectious Diseases grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 8 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 25 of the total 32 employees tested in these three programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control in place to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster (R&D), Small Business Development Centers (SBDC), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - R&D - All ALN's SBDC - SBAHQ21B0057, SBAHQ22B0059, SBAOEDSB230049, SBAHQ20C0031 ELC - NU50CK000510 Pass through Entity - R&D - Various SBDC - None ELC - Michigan Department of Health and Human Services and Kent County Health Department Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed including complying with established accounting policies and practices of the University. Per the University's policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair or Dean) of the work performed approximately 30 days after each reporting period. Condition - Of the 10 employees included within the hourly payroll expenditure sample selected for testing in the Research and Development Cluster, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 10 employees. Of the 14 employees included within the hourly payroll expenditure sample selected for testing in the Small Business Development grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for 7 employees. Of the 8 employees included within the hourly payroll expenditure sample selected for testing in the Epidemiology and Laboratory Capacity for Infectious Diseases grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 8 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 25 of the total 32 employees tested in these three programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control in place to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster (R&D), Small Business Development Centers (SBDC), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - R&D - All ALN's SBDC - SBAHQ21B0057, SBAHQ22B0059, SBAOEDSB230049, SBAHQ20C0031 ELC - NU50CK000510 Pass through Entity - R&D - Various SBDC - None ELC - Michigan Department of Health and Human Services and Kent County Health Department Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed including complying with established accounting policies and practices of the University. Per the University's policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair or Dean) of the work performed approximately 30 days after each reporting period. Condition - Of the 10 employees included within the hourly payroll expenditure sample selected for testing in the Research and Development Cluster, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 10 employees. Of the 14 employees included within the hourly payroll expenditure sample selected for testing in the Small Business Development grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for 7 employees. Of the 8 employees included within the hourly payroll expenditure sample selected for testing in the Epidemiology and Laboratory Capacity for Infectious Diseases grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 8 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 25 of the total 32 employees tested in these three programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control in place to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.
Assistance Listing, Federal Agency, and Program Name - Research and Development Cluster (R&D), Small Business Development Centers (SBDC), Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Federal Award Identification Number and Year - R&D - All ALN's SBDC - SBAHQ21B0057, SBAHQ22B0059, SBAOEDSB230049, SBAHQ20C0031 ELC - NU50CK000510 Pass through Entity - R&D - Various SBDC - None ELC - Michigan Department of Health and Human Services and Kent County Health Department Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - As outlined in 2 CFR 200.430(i), salaries and wages must be based on records that accurately reflect the work performed including complying with established accounting policies and practices of the University. Per the University's policy, effort reports are to be certified by an individual or a person with suitable means of verification (the principal investigator, department chair or Dean) of the work performed approximately 30 days after each reporting period. Condition - Of the 10 employees included within the hourly payroll expenditure sample selected for testing in the Research and Development Cluster, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 10 employees. Of the 14 employees included within the hourly payroll expenditure sample selected for testing in the Small Business Development grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for 7 employees. Of the 8 employees included within the hourly payroll expenditure sample selected for testing in the Epidemiology and Laboratory Capacity for Infectious Diseases grants, the University did not complete a full, executed review of the effort certifications within the time period as outlined in the policy for all 8 employees. Questioned Costs - None Identification of How Questioned Costs Were Computed - N/A Context - In the samples mentioned above, the University ultimately completed review of the effort certifications to support salaries and wages were allowable, however, 25 of the total 32 employees tested in these three programs were not reviewed timely. Cause and Effect - The University did not follow its policy to ensure that time and efforts were being reviewed and approved in a timely manner. Recommendation - We recommend the University maintain a procedure and control in place to ensure that, upon each reporting period, the University reviews and approves effort certifications as outlined in its policy. Views of Responsible Officials and Corrective Action Plan - Management agrees. The University implemented a new grant management software that will provide greater functionality to complete the effort certification process within the time requirements as identified in the University's Time and Effort Reporting policy.