2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
Finding 2023-004 Internal Control Over Allowable Activities/Allowable Costs – Payroll Expenditures Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019- 033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR §200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Under §200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under §200.430(i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity. Condition: During the audit, we reviewed payroll period ended September 24, 2022, December 17, 2022, February 25, 2023, and April 22, 2023. Except for the payroll period ended April 22, 2023, we could not verify if the Bus Operators’ and all other Federal Transit employee’s timecards were approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or who completed the upload of the timecard reports to the payroll module. Cause: Although the City has been working on implementing the necessary approvals, these efforts had not taken full effect for the most part of the fiscal year 2023 until April 2023. Effect or Potential Effect: Without review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: 2022-007. Recommendation: We recommend that the City ensure the full implementation and consistent application of the established timecard approval policies for all Federal Transit employees and strengthen its monitoring mechanisms to verify that supervisors review and approve timecards for every payroll period, ensuring compliance with the policies throughout the entire fiscal year. Views of Responsible Officials: The City has implemented the recommendation first contained in 2022-007. There is a process in place where supervisor review and approval of timesheets is completed and documented. That process continues and will be in place for the entirety of the fiscal year ending June 30, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509 Federal Awarding Agency: U.S. Department of the Transportation Pass-Through Entity: New Mexico Department of Transportation Federal Award ID Number: N/A Federal Award Year: 2023 Condition - During reconciliation of the general ledger to SEFA, it was noted administrative percentages of payroll were included on reimbursement requests monthly that did not include supporting documentation on what the percentages were based on or support by the employee documenting the time spent on the grant. No documentation is maintained to support the process by which these estimates were produced, or the relationship to the activities actually performed. No analysis of actual activities versus budgeted activities is performed. There are no controls in place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the amounts charged. Criteria - Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Cause - The County does not have policies and procedures in place to ensure the allowability of the percent allocations or retain detailed approved supporting documentation. Questioned Costs – Questioned and likely costs of $77,520 Effect - The County could spend federal award funding on time not spent on the grant which could lead to disallowed costs. Auditor’s Recommendation - The auditor recommends the County strengthen policies and procedures to ensure the charging of administrative costs for allowability is based off supported calculations or documented time spent to grant. Views of Responsible Officials and Planned Corrective Action - The County will create a documented process in the new policy and procedures manual for federal guidelines and charging of administrative costs for documented time spent on grants with supporting calculations will be documented for clarity and consistency. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date - No later than August 31, 2024.
2023-013 – Allocable Costs related to Compensation (Material Noncompliance, Material Weakness in Internal Controls over Compliance) Federal Program Information Federal Award Title and ALN: Formula Grants for Rural Areas and Tribal Transit Program, 20.509 Federal Awarding Agency: U.S. Department of the Transportation Pass-Through Entity: New Mexico Department of Transportation Federal Award ID Number: N/A Federal Award Year: 2023 Condition - During reconciliation of the general ledger to SEFA, it was noted administrative percentages of payroll were included on reimbursement requests monthly that did not include supporting documentation on what the percentages were based on or support by the employee documenting the time spent on the grant. No documentation is maintained to support the process by which these estimates were produced, or the relationship to the activities actually performed. No analysis of actual activities versus budgeted activities is performed. There are no controls in place to review after-the-fact charges to the Federal grant by the administrative personnel vs. the amounts charged. Criteria - Per 2 CFR 200.303(a), the non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs, except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.430(i)(1) – Compensation – personal services, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Cause - The County does not have policies and procedures in place to ensure the allowability of the percent allocations or retain detailed approved supporting documentation. Questioned Costs – Questioned and likely costs of $77,520 Effect - The County could spend federal award funding on time not spent on the grant which could lead to disallowed costs. Auditor’s Recommendation - The auditor recommends the County strengthen policies and procedures to ensure the charging of administrative costs for allowability is based off supported calculations or documented time spent to grant. Views of Responsible Officials and Planned Corrective Action - The County will create a documented process in the new policy and procedures manual for federal guidelines and charging of administrative costs for documented time spent on grants with supporting calculations will be documented for clarity and consistency. Responsible Official – Andrea Montoya, Deputy County Manager and Robert Placencio, Finance Director Timeline and Estimated Completion Date - No later than August 31, 2024.
Activities Allowed or Unallowed; Allowable Costs/Cost Principles Federal Award Identification Assistance Listing Program Title: Formula Grants for Rural Areas Assistance Listing Program Number: 20.509 Federal Award ID Number and Year: Various Federal Agency: U.S. Department of Transportation Pass-Through Entity: Nebraska Department of Transportation Criteria Standards for documentation of personnel expenses at 2 CFR 200.430(i)(1) require that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. These records must: - Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly documented. - Reasonably reflect the total activity for which the employee is compensated. - Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Standards for documentation of personnel expenses at 2 CFR 200.430(i)(3) require that in accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR 516), charges for the salaries and wages of nonexempt employees must be supported by records indicating the total number of hours worked each day. The Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award (2 CFR 200.303). Condition The Organization lacked adequate documentation to support: - Hours worked by employees - Supervisory approval of time sheets - Approved rates of pay Repeat Finding Yes: 2022-005. Cause Procedures within the Organization were inadequate to ensure that personnel expenses were adequately documented. Effect or Potential Effect Increased potential for errors or misuse of funds. Questioned Costs Known $7,240 Statistical Sample No. Context Auditor haphazardly selected 60 payroll transactions covering the entire fiscal year for testing, however, auditor did not complete the testing of all 60 transactions due to the frequency of errors encountered. Of the nine transactions that were tested, there were errors regarding: - Lack of (approved) timesheets. - Personnel files lacking (approved) rates of pay. - Rates of pay documented in personnel files that did not match the actual rates of pay. - Timesheet hours that vary from the payroll summary. - A timesheet that was self-approved. Recommendation We recommend the Organization establish a system of internal control consisting of policies and procedures whereby payroll transactions and related documentation contain appropriate review and approval. Views of Responsible Officials See Corrective Action Plan, below.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
2023-007 U.S. Department of Agriculture, For the period July 1, 2022 through June 30, 2023, Assistance Listing #10.553, 10.555, 10.556, 10.559, and 10.582 - Internal Controls over Child Nutrition Cluster Criteria: The School Department receives federal reimbursement for free and reduced price meals provided to children at established reimbursement rates. Monthly claims for reimbursement must be based on lunch counts taken daily at the point of service, which correctly identify the number of free, reduced price, and paid lunches served to eligible students. In addition, the School Department participates in the Fresh Fruit and Vegetable Program which provides reimbursement of fresh fruit and vegetable purchases and related operational program costs. Charges for salaries and wages to the program must be based on records that accurately reflect the work performed. Condition: The April claim reimbursement form overstated breakfast meal counts by 1,000 meals, which comprised 7% of total meals claimed. In addition, operational and administrative payroll costs charged to the Fresh Fruit and Vegetable Program were based on estimated hours worked, rather than actual time and effort records. Cause: The Business Manager approves all monthly claims in the CNPWeb system prior to submission to the State. However, the School Department does not have a policy to provide supporting claim documentation to the Business Manager to verify the accuracy of the monthly claim. In addition, the School Department does not have policies and procedures that provide reasonable assurance that payroll charges to the Fresh Fruit and Vegetable Program are accurate, allowable, and properly allocated. Effect: Errors in monthly claims may not be detected and corrected in a timely basis resulting in potential questioned costs. Unsupported payroll charges may not meet cost principal requirements resulting in potential questioned costs. Recommendation: We recommend the School Department establish policies and procedures that ensure the Business Manager has adequate supporting documentation to verify monthly nutrition claims before they are submitted to the State. We also recommend that policies and procedures be established to ensure employees allocating their time to the Fresh Fruit and Vegetable Program complete documentation as required by 2 CFR 200.430(i). Likely Questioned Costs: None.
Federal agency: U.S. Department of Education Federal program title: Adult Education - Basic Grants to States Assistance Listing Number: 84.002 Pass-Through Agency: Massachusetts Department of Elementary and Secondary Education Pass-Through Number(s): Code 340 Award Period: July 1, 2022 – June 30, 2023 Type of Finding: • Material Weakness in Internal Control over Compliance • Material Noncompliance (Modified Opinion) Compliance Requirements: Activities Allowed or Unallowed and Allowable Cost/Cost Principles Criteria or Specific Requirement: The Code of Federal Regulations (CFR) Title 2 Part 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition and Context: For all payroll charges selected for testing, the City could not provide records that accurately reflected the work performed. Questioned Costs: $1,047,536 Cause: Procedures to maintain records that accurately reflect the work performed for payroll charges to the grant need to be implemented and/or strengthened. Effect: Noncompliance with the federal program occurred and we could not determine the allowability of payroll charges to the grant. Repeat Finding: No Recommendation: We recommend procedures to maintain records that accurately reflect the work performed for payroll charges to the grant be implemented/strengthened. Views of Responsible Officials: Management agrees with the finding
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
2023-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Department of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 11 employees, it was determined that 3 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is a repeat finding of 2022-001. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding, and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Allowable Costs – Ryan White Part B HIV Care Formula Grants – Federal Assistance Listing Number 93.917; Award Period: Year ended June 30, 2023; Pass-through entity names: Virginia Department of Health and Northern Virginia Regional Commission. Allowable Costs – Housing Opportunities For Persons With AIDS – Federal Assistance Listing Number 14.241; Award Period: Year ended June 30, 2023. Criteria: Per 2 CFR §200.430(i), non-federal entities are required to maintain records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the time being charged is accurate, allowable and properly allocated, are incorporated in the official records, such as payroll records, reasonably reflect the employee’s total activity, provide a time or percentage breakdown on all activities, both federally and non-federally funded, for the employee, and comply with the non-federal entity’s pre-established accounting practices and procedures. Condition: The Organization allowed payroll related costs to be submitted for reimbursement under the grant for time that did not match approved timesheets. This is not in compliance with program allowable cost requirements. Cause: There is a lack of review of payroll registers to compare to timesheets to ensure the proper number of hours are submitted for reimbursement. Effect: The Organization billed the incorrect amount of payroll and related costs to the federal program, resulting in questioned costs. Questioned Costs: The amount of payroll and related costs discovered to be incorrect. Context: Timesheets of numerous employees were found to not match the hours used in calculating payroll to be submitted for reimbursement to the grant. Recommendation: We recommend the Organization implement a process to first record time into the payroll system based on timesheets, then further implement a review process to compare the payroll register hours to the approved timesheets. Views of Responsible Officials: The Organization would like to note that the repeat finding is a result of the prior audit being completed near the end of the year ended June 30, 2023. The auditee agrees with this recommendation and has taken the necessary steps to prevent a re-occurrence. Lack of timesheets and pay rates resulted in the inability to show that time and payroll were accurately recorded. This resulted in additional procedures during the audit process being performed to obtain reasonable assurance over these balances.
Lack of Documentation to Support Distribution of Wages (Material Weakness) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: COVID-19 Education Stabilization Fund Assistance Listing Number(s): 84.425U Passed-through Identification: 20220338 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Material Weakness Material Noncompliance Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to the federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal ward or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have documentation to support the distribution of the employee’s time spent on grant activities. Cause: Administrative oversight and lack of training of requirements. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $47,216 Identification as Repeat Finding: This is not a repeat finding. Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Finding #2023-003 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Cost Principles 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Lack of Supporting Documentation for Disbursements Criteria Costs charged to federal grants must meet the provisions of the standards for documentation of expenses contained in 2 CFR 200.430(i)(1) which requires that charges to federal awards for disbursements must be based on records that accurately reflect actual costs incurred. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. This would include supporting invoices to be maintained and reviewed prior to payment. Condition During the audit, it was identified that supporting invoices could not be provided for three nonpayroll related disbursements. The population sampled was all nonpayroll related disbursements. Total number of selections tested was sixty-five, which comprised 2% of the total population. Cause This significant deficiency may have resulted from inadequate procedures for the retention of supporting documentation or a lack of oversight and reconciliation processes in the disbursement cycle. The failure to accurately reconcile recorded amounts to the supporting invoices further indicates a breakdown in internal controls. Effects The absence of supporting invoices and discrepancies between recorded amounts and invoice amounts create a risk of unauthorized or unsupported disbursements. This weakens the Organization’s ability to demonstrate compliance with federal grant requirements and increases the likelihood of disallowed costs or questioned costs in future audits. Failure to adequately control disbursements may also expose the client to potential financial misstatements or fraud. Questions Costs In total, $141 of expenses could not be supported. Perspective This audit finding is systematic. Statistical Sample The sample was a statistically valid sample. Repeat Finding This audit finding is not a repeat finding. Recommendation We recommend that the Organization strengthen its internal control procedures to ensure that all disbursement transactions are properly supported by invoices or other appropriate documentation before they are recorded and paid. The client should implement a regular reconciliation process to ensure that recorded amounts agree with supporting documentation. Additionally, management should establish policies for the retention of documentation to ensure it is readily available for audit and compliance purposes. Views of Responsible Officials Management agrees with the finding. The Organization is in the process of updating its procedures to ensure that all disbursements are supported by invoices and that recorded amounts are regularly reconciled with supporting documentation. Additionally, the Organization will implement a formal policy for document retention to ensure audit readiness.
Finding #2023-003 – Significant Deficiency – Activities Allowed or Unallowed, Allowable Cost Principles 93.558 Temporary Assistance for Needy Families – Out of School Time Program 93.600 Head Start Lack of Supporting Documentation for Disbursements Criteria Costs charged to federal grants must meet the provisions of the standards for documentation of expenses contained in 2 CFR 200.430(i)(1) which requires that charges to federal awards for disbursements must be based on records that accurately reflect actual costs incurred. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. This would include supporting invoices to be maintained and reviewed prior to payment. Condition During the audit, it was identified that supporting invoices could not be provided for three nonpayroll related disbursements. The population sampled was all nonpayroll related disbursements. Total number of selections tested was sixty-five, which comprised 2% of the total population. Cause This significant deficiency may have resulted from inadequate procedures for the retention of supporting documentation or a lack of oversight and reconciliation processes in the disbursement cycle. The failure to accurately reconcile recorded amounts to the supporting invoices further indicates a breakdown in internal controls. Effects The absence of supporting invoices and discrepancies between recorded amounts and invoice amounts create a risk of unauthorized or unsupported disbursements. This weakens the Organization’s ability to demonstrate compliance with federal grant requirements and increases the likelihood of disallowed costs or questioned costs in future audits. Failure to adequately control disbursements may also expose the client to potential financial misstatements or fraud. Questions Costs In total, $141 of expenses could not be supported. Perspective This audit finding is systematic. Statistical Sample The sample was a statistically valid sample. Repeat Finding This audit finding is not a repeat finding. Recommendation We recommend that the Organization strengthen its internal control procedures to ensure that all disbursement transactions are properly supported by invoices or other appropriate documentation before they are recorded and paid. The client should implement a regular reconciliation process to ensure that recorded amounts agree with supporting documentation. Additionally, management should establish policies for the retention of documentation to ensure it is readily available for audit and compliance purposes. Views of Responsible Officials Management agrees with the finding. The Organization is in the process of updating its procedures to ensure that all disbursements are supported by invoices and that recorded amounts are regularly reconciled with supporting documentation. Additionally, the Organization will implement a formal policy for document retention to ensure audit readiness.
Statement of condition: The allocation of salaries and wages charged to the Education Stabilization program for employees tested was not accurate per supporting documentation of time certifications. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s time certifications meet this regulation but these time certifications do not support the allocations of pay for these employees. Cause of condition: Procedures ae in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance wit the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees who were paid with Education Stabilization funds was not supported by time certifications which state actual time worked by program for each employee. Context: A sample of 40 employees paid wit Education Stabilization funds were selected for testing. The audit testing found that 8 of the employees’ time certifications indicated that they worked less hours in the program than what was actually charged to the program. This resulted in questioned costs of $1,704. Recommendation: To ensure that salaries and wages charged to federal award programs are supported by time certifications, a review of completed time certifications should be compared to salaries and wages recorded to the program. Views of responsible officials and planned corrective actions: Management agrees with this find and will review time certifications in comparison to salaries and wages recorded to the program. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Time certifications and timesheets that support salaries and wages charged to the Education Stabilization program showed no evidence of review and approval performed. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation but a time certification showed no evidence of review and approval. Cause of condition: Procedures are in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance with the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees paid with Education Stabilization funds did not have evidence that review and approval was performed. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. The audit testing found that 1 employee’s time certification was not signed by the employee and had no evidence of review and approval from a supervisor. Recommendation: To ensure the accuracy of time certifications and that salaries and wages charged to federal award programs are accurate, all time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel. This review and approval should be evidenced by the School personnel’s signature. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure all time certifications are signed by employees and reviewed and approved by the appropriate School personnel. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Contracts are not maintained for employees. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation, however, without a contract to support an employee’s pay, the allocation of pay to be charged to the program is unable to be determined. Cause of condition: Management has not kept or maintained a copy of an employee’s contract. Effect of condition: Due to management’s inability to provide a copy of an employee’s contract, we were unable to determine whether the employee’s pay was properly allocated to the program based on the employee’s completed time certification. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. Management was unable to provide a copy of 1 employee’s contract. This resulted in $477 in questioned costs. Recommendation: To ensure the accuracy of salaries and wages that are allocated to federal award programs, management should maintain a copy of all employee contracts. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensue copies of all employee contracts are maintained. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: The allocation of salaries and wages charged to the Education Stabilization program for employees tested was not accurate per supporting documentation of time certifications. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s time certifications meet this regulation but these time certifications do not support the allocations of pay for these employees. Cause of condition: Procedures ae in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance wit the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees who were paid with Education Stabilization funds was not supported by time certifications which state actual time worked by program for each employee. Context: A sample of 40 employees paid wit Education Stabilization funds were selected for testing. The audit testing found that 8 of the employees’ time certifications indicated that they worked less hours in the program than what was actually charged to the program. This resulted in questioned costs of $1,704. Recommendation: To ensure that salaries and wages charged to federal award programs are supported by time certifications, a review of completed time certifications should be compared to salaries and wages recorded to the program. Views of responsible officials and planned corrective actions: Management agrees with this find and will review time certifications in comparison to salaries and wages recorded to the program. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Time certifications and timesheets that support salaries and wages charged to the Education Stabilization program showed no evidence of review and approval performed. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation but a time certification showed no evidence of review and approval. Cause of condition: Procedures are in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance with the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees paid with Education Stabilization funds did not have evidence that review and approval was performed. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. The audit testing found that 1 employee’s time certification was not signed by the employee and had no evidence of review and approval from a supervisor. Recommendation: To ensure the accuracy of time certifications and that salaries and wages charged to federal award programs are accurate, all time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel. This review and approval should be evidenced by the School personnel’s signature. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure all time certifications are signed by employees and reviewed and approved by the appropriate School personnel. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Contracts are not maintained for employees. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation, however, without a contract to support an employee’s pay, the allocation of pay to be charged to the program is unable to be determined. Cause of condition: Management has not kept or maintained a copy of an employee’s contract. Effect of condition: Due to management’s inability to provide a copy of an employee’s contract, we were unable to determine whether the employee’s pay was properly allocated to the program based on the employee’s completed time certification. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. Management was unable to provide a copy of 1 employee’s contract. This resulted in $477 in questioned costs. Recommendation: To ensure the accuracy of salaries and wages that are allocated to federal award programs, management should maintain a copy of all employee contracts. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensue copies of all employee contracts are maintained. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: The allocation of salaries and wages charged to the Education Stabilization program for employees tested was not accurate per supporting documentation of time certifications. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s time certifications meet this regulation but these time certifications do not support the allocations of pay for these employees. Cause of condition: Procedures ae in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance wit the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees who were paid with Education Stabilization funds was not supported by time certifications which state actual time worked by program for each employee. Context: A sample of 40 employees paid wit Education Stabilization funds were selected for testing. The audit testing found that 8 of the employees’ time certifications indicated that they worked less hours in the program than what was actually charged to the program. This resulted in questioned costs of $1,704. Recommendation: To ensure that salaries and wages charged to federal award programs are supported by time certifications, a review of completed time certifications should be compared to salaries and wages recorded to the program. Views of responsible officials and planned corrective actions: Management agrees with this find and will review time certifications in comparison to salaries and wages recorded to the program. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Time certifications and timesheets that support salaries and wages charged to the Education Stabilization program showed no evidence of review and approval performed. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation but a time certification showed no evidence of review and approval. Cause of condition: Procedures are in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance with the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees paid with Education Stabilization funds did not have evidence that review and approval was performed. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. The audit testing found that 1 employee’s time certification was not signed by the employee and had no evidence of review and approval from a supervisor. Recommendation: To ensure the accuracy of time certifications and that salaries and wages charged to federal award programs are accurate, all time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel. This review and approval should be evidenced by the School personnel’s signature. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensure all time certifications are signed by employees and reviewed and approved by the appropriate School personnel. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
Statement of condition: Contracts are not maintained for employees. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s control of reviewing and approving of time certifications and timesheets and providing evidence of this review and approval through signature of appropriate personnel meet this regulation, however, without a contract to support an employee’s pay, the allocation of pay to be charged to the program is unable to be determined. Cause of condition: Management has not kept or maintained a copy of an employee’s contract. Effect of condition: Due to management’s inability to provide a copy of an employee’s contract, we were unable to determine whether the employee’s pay was properly allocated to the program based on the employee’s completed time certification. Context: A sample of 40 employees paid with Education Stabilization funds were selected for testing. Management was unable to provide a copy of 1 employee’s contract. This resulted in $477 in questioned costs. Recommendation: To ensure the accuracy of salaries and wages that are allocated to federal award programs, management should maintain a copy of all employee contracts. Views of responsible officials and planned corrective actions: Management agrees with this finding and will ensue copies of all employee contracts are maintained. See 2023-004 for management’s detailed action plan, timeline, and the responsible parties for all Education Stabilization Fund findings.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
In accordance with 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates alone do not qualify as support for charges to Federal awards. For the year ended June 30, 2023, Unique – AIDS did not maintain support for salary based on work performed. Salary and wages were charged based on budget estimates. The salaries and wages are not charged based on actual work performed. Unique-AIDS is not in compliance with 2 CFR 200.430. No questioned costs reported. The context is a random sampling of the federal expenditures. This is not a repeat finding from the prior year. We recommend that Unique – AIDS establish a system to determine and document the time spent and amount charged to their programs.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year 2023) Questioned Costs: $6,942 Repeat of Prior Year Finding: FA 2022-001 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Title I Grants to Local Educational Agencies program. Background: The Title I Grants to Local Educational Agencies (Title I) program was authorized under the Elementary and Secondary Education Act of 1965 to help local educational agencies (LEAs) improve teaching and learning in high-poverty schools in particular for children failing or most at-risk of failing, to meet challenging State academic standards. LEAs may operate targeted assistance programs in which children who are failing or most at-risk of failing may be served or schoolwide programs in which all children in eligible schools may be served. Title I funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Title I funds totaling $523,820 were expended and reported on the Talbot County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: Three nonpersonal services expenditures were randomly selected for testing using a non-statistical sampling approach. The expenditures were reviewed to determine if internal controls were implemented and applicable compliance requirements were met. For one sampled expenditure in the amount of $31, adequate supporting documentation in the form of an invoice was not maintained. Additionally, three personal services expenditures were randomly selected for testing using a non-statistical sampling approach. One individually significant expenditure was also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For all employees tested, supporting documentation was not maintained for additional payments totaling $6,194. • For two employees tested, specific administrative supplements were overpaid and underpaid by $717 and $500, respectively. Questioned Costs: Upon testing a sample of $1,275 in nonpersonal service expenditures, known questioned costs of $31 were identified for expenditures that were not supported by adequate documentation. Using the total nonpersonal services expenditures population of $74,447, we project the likely questioned costs to be approximately $1,810. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Additionally, upon testing a sample of $38,405 in personal services expenditures, known questioned costs of $6,611 were identified for expenditures not supported by adequate documentation. Using the total personal services expenditures population of $143,515 (excluding benefits payments), we project the likely questioned costs to be approximately $24,705. Furthermore, known questioned costs identified for undocumented personal services payments associated with individually significant items tested totaled $300. Therefore, the known and likely questioned costs identified for all unallowable and/or undocumented payments throughout the sample and individually significant items tested totaled $6,942 and $26,815, respectively. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the Title I program. Failure to ensure that documentation exists to support the allowability of payments from the Title I fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to Title I program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District's purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2023-001 Strengthen Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Number and Title: 84.010 - Title I Grants to Local Educational Agencies Federal Award Number: S010A210010-21A (Year: 2022), S010A220010 (Year 2023) Questioned Costs: $6,942 Repeat of Prior Year Finding: FA 2022-001 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over expenditures as it relates to the Title I Grants to Local Educational Agencies program. Background: The Title I Grants to Local Educational Agencies (Title I) program was authorized under the Elementary and Secondary Education Act of 1965 to help local educational agencies (LEAs) improve teaching and learning in high-poverty schools in particular for children failing or most at-risk of failing, to meet challenging State academic standards. LEAs may operate targeted assistance programs in which children who are failing or most at-risk of failing may be served or schoolwide programs in which all children in eligible schools may be served. Title I funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. Title I funds totaling $523,820 were expended and reported on the Talbot County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Additionally, provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: Three nonpersonal services expenditures were randomly selected for testing using a non-statistical sampling approach. The expenditures were reviewed to determine if internal controls were implemented and applicable compliance requirements were met. For one sampled expenditure in the amount of $31, adequate supporting documentation in the form of an invoice was not maintained. Additionally, three personal services expenditures were randomly selected for testing using a non-statistical sampling approach. One individually significant expenditure was also selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • For all employees tested, supporting documentation was not maintained for additional payments totaling $6,194. • For two employees tested, specific administrative supplements were overpaid and underpaid by $717 and $500, respectively. Questioned Costs: Upon testing a sample of $1,275 in nonpersonal service expenditures, known questioned costs of $31 were identified for expenditures that were not supported by adequate documentation. Using the total nonpersonal services expenditures population of $74,447, we project the likely questioned costs to be approximately $1,810. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Additionally, upon testing a sample of $38,405 in personal services expenditures, known questioned costs of $6,611 were identified for expenditures not supported by adequate documentation. Using the total personal services expenditures population of $143,515 (excluding benefits payments), we project the likely questioned costs to be approximately $24,705. Furthermore, known questioned costs identified for undocumented personal services payments associated with individually significant items tested totaled $300. Therefore, the known and likely questioned costs identified for all unallowable and/or undocumented payments throughout the sample and individually significant items tested totaled $6,942 and $26,815, respectively. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the Title I program. Failure to ensure that documentation exists to support the allowability of payments from the Title I fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to Title I program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District's purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $98,807 Repeat of Prior Year Finding: FA 2022-002 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,201,097 were expended and reported on the Talbot County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 12 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, two individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • A purchase order was not maintained for two of the expenditures. • The check amount, invoice, and purchase requisition form for one expenditure did not agree. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS In addition, a sample of 23 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • Timesheets or other supporting documentation could not be provided for payments made to 15 employees. • Timesheets provided for 15 employees did not agree to amounts paid for the corresponding time period. • One employee received a salary increase that was not supported by a board-approved salary scale. Questioned Costs: Upon testing a sample of $34,392 in nonpersonal services expenditures, known questioned costs of $1,365 were identified. Using the total non-personal services expenditures population of $144,208, we project the likely questioned costs to be approximately $5,723. Additionally, upon testing a sample of $274,649 in personal services expenditures, known questioned costs of $97,442 were identified. Using the total personal services expenditures population of $864,482, we project the likely questioned costs to be approximately $306,706. Therefore, the known and likely questioned costs identified for unallowable payments totaled $98,807 and $312,429. The following Assistance Listing Numbers were affected by known and questioned costs: 84.425D and 84.425U. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that documentation exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $98,807 Repeat of Prior Year Finding: FA 2022-002 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,201,097 were expended and reported on the Talbot County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 12 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, two individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • A purchase order was not maintained for two of the expenditures. • The check amount, invoice, and purchase requisition form for one expenditure did not agree. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS In addition, a sample of 23 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • Timesheets or other supporting documentation could not be provided for payments made to 15 employees. • Timesheets provided for 15 employees did not agree to amounts paid for the corresponding time period. • One employee received a salary increase that was not supported by a board-approved salary scale. Questioned Costs: Upon testing a sample of $34,392 in nonpersonal services expenditures, known questioned costs of $1,365 were identified. Using the total non-personal services expenditures population of $144,208, we project the likely questioned costs to be approximately $5,723. Additionally, upon testing a sample of $274,649 in personal services expenditures, known questioned costs of $97,442 were identified. Using the total personal services expenditures population of $864,482, we project the likely questioned costs to be approximately $306,706. Therefore, the known and likely questioned costs identified for unallowable payments totaled $98,807 and $312,429. The following Assistance Listing Numbers were affected by known and questioned costs: 84.425D and 84.425U. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that documentation exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.
FA 2023-002 Improve Controls over Expenditures Compliance Requirement: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Material Weakness Compliance Impact: Material Noncompliance Federal Awarding Agency: U.S. Department of Education Pass-Through Entity: Georgia Department of Education Assistance Listing Numbers and Titles: COVID-19 – 84.425D – Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425U – American Rescue Plan Elementary and Secondary School Emergency Relief Fund COVID-19 – 84.425W – American Rescue Plan Elementary and Secondary School Emergency Relief Fund – Homeless Children and Youth Federal Award Numbers: S425D210012 (Year: 2021), S425U210012 (Year: 2021), S425W210011 (Year: 2021) Questioned Costs: $98,807 Repeat of Prior Year Finding: FA 2022-002 Description: A review of expenditures charged to the Elementary and Secondary School Emergency Relief Fund program revealed that the School District’s internal control procedures were not operating to ensure that expenditures were appropriately documented to support allowability. Background: On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act was designed to mitigate the economic effects of the COVID-19 pandemic in a variety of ways, including providing additional funding for local educational agencies (LEAs) navigating the impact of the COVID-19 outbreak. Provisions included in Title VIII of the CARES Act created the Education Stabilization Fund to provide financial resources to educational entities to prevent, prepare for, and respond to the coronavirus. The CARES Act allocated $30.75 billion, the Coronavirus Response and Relief Supplemental Appropriations Act allocated an additional $81.9 billion, and the American Rescue Plan Act added $165.1 billion in funding to the Education Stabilization Fund. Multiple Education Stabilization Fund subprograms were created and allotted funding through the various COVID-19-related legislation. Of these programs, the Elementary and Secondary School Emergency Relief (ESSER) Fund was created to address the impact that COVID-19 has had, and continues to have, on elementary and secondary schools across the nation. ESSER funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Education (ED). GaDOE is responsible for distributing funds to LEAs and overseeing the expenditure of funds by LEAs. ESSER funds totaling $1,201,097 were expended and reported on the Talbot County School District’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2023. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity…” Condition: A sample of 12 nonpersonal services expenditures was randomly selected for testing using a non-statistical sampling approach. In addition, two individually significant items were selected for testing. These expenditures were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • A purchase order was not maintained for two of the expenditures. • The check amount, invoice, and purchase requisition form for one expenditure did not agree. lll FEDERAL AWARD FINDINGS AND QUESTIONED COSTS In addition, a sample of 23 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if appropriate internal controls were implemented and applicable compliance requirements were met. The following deficiencies were noted: • Timesheets or other supporting documentation could not be provided for payments made to 15 employees. • Timesheets provided for 15 employees did not agree to amounts paid for the corresponding time period. • One employee received a salary increase that was not supported by a board-approved salary scale. Questioned Costs: Upon testing a sample of $34,392 in nonpersonal services expenditures, known questioned costs of $1,365 were identified. Using the total non-personal services expenditures population of $144,208, we project the likely questioned costs to be approximately $5,723. Additionally, upon testing a sample of $274,649 in personal services expenditures, known questioned costs of $97,442 were identified. Using the total personal services expenditures population of $864,482, we project the likely questioned costs to be approximately $306,706. Therefore, the known and likely questioned costs identified for unallowable payments totaled $98,807 and $312,429. The following Assistance Listing Numbers were affected by known and questioned costs: 84.425D and 84.425U. Cause: Per discussion with management, the School District believes that this is due to change in management in the financial department. Effect or Potential Effect: The School District is not in compliance with the Uniform Guidance or ED guidance related to the ESSER program. Failure to ensure that documentation exists to support the allowability of payments from the ESSER fund may expose the School District to unnecessary financial strains and shortages as GaDOE may require the School District to return funds associated with unallowable expenditures. Recommendation: The School District should review current internal control procedures related to ESSER program expenditures. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that all expenditures are supported by appropriate documentation. In addition, the School District should implement a monitoring process to ensure that all expenditures are compliant with the School District’s purchasing and employee compensation policies and procedures. Views of Responsible Officials: We concur with this finding.