Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Condition: We identified salary expenses for one employee applied to one housing grant tested that were not authorized in the grant budget. Criteria: As required by 2 CFR section 200.430, the Center must meet the following mandatory standards: (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; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: The Center retained a third-party accounting firm to perform accounting functions in 2022, due to staff turnover during the fiscal year. As a result, this salary was not correctly allocated to the proper grant. Effect: Claiming salaries that were not authorized in the grant budget may lead to costs that are disallowed under the grant agreement. Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review to identify and correct any misallocations. Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the salary expense for that one employee was not correctly allocated and has provided a corrective action plan. Prior to this finding, in April 2023, the Center had already implemented internal controls and processes regarding allocation of salaries to specific grants, which should prevent this this type of finding going forward.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Federal Award Identification Number and Year: 03-22-001-0001-0001 - 2022 Pass-Through Agency: Thurston County Pass-Through Number: None Award Period: March 1, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control and Compliance over Major Programs Criteria or Specific Requirement: Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR § 200.430(i)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Internal controls and adherence to compliance did not detect an error in payroll expenditures to the Coronavirus State and Local Recovery Funds program. Questioned costs: Total questioned cost of $69 based on 2.75 hours of sick time incorrectly charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027), contract number 03-22-001-0001-0001. Context: During our testing of payroll, 1 out of the 40 paychecks had hours charged to the Coronavirus State and Local Recovery Funds program. Cause: The error related to charging sick time to the grant rather than to administrative expenses. The error was not detected until the audit. Effect: Lack of review and reconciliation of time and effort could lead to inappropriate charges to Federal programs. Recommendation: CLA recommends increased payroll training and reconciliation. View of Responsible Official: There is no disagreement with the audit finding. Management’s response and corrective action plan is attached to our report.
Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Federal Award Identification Number and Year: 03-22-001-0001-0001 - 2022 Pass-Through Agency: Thurston County Pass-Through Number: None Award Period: March 1, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control and Compliance over Major Programs Criteria or Specific Requirement: Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR § 200.430(i)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program. Questioned costs: Total questioned cost of $2,983 based on two payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027), contract number 03-22-001-0001-0001. Context: During our payroll testing, of the two Executive Director timesheets tested, both didn't show a secondary control offsetting the program manager and for one item, there was no proof of approval at all. Cause: The error was caused by not applying an adequate amount of controls necessary for an executive director's time. For the lack of evidence of review, this likely was caused by an oversight (timesheet shows evidence of review, just no initials). Effect: The Coronavirus State and Local Recovery Funds program and other Federal programs could be incorrectly charged. Recommendation: CLA recommends that the program manager and a member of the finance committee knowledgeable about 2 CFR § 200.430(i)(1) review the executive director costs charged to the Coronavirus State and Local Recovery Funds program. View of Responsible Official: There is no disagreement with the audit finding. Management’s response and corrective action plan is attached to our report.
Finding 2022-004: Salaries and Wages (Allowable Costs) Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: i. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ii. Be incorporated into the official records of the non-Federal entity; iii. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; v. Comply with the established accounting policies and practices of the non-Federal entity; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: During our testwork, we determined that SAMU did not adequately document employee time spent on the Federal program versus other programs. In addition, we noted one instance in which an employee offer letter was not available for examination. Cause: SAMU does not require that all employees complete timesheets documenting time spent on the Federal award versus other awards. Additionally, SAMU does not have effective internal controls in place to ensure that employee salary documentation is retained. Effect or Potential Effect: SAMU could inadvertently charge time to the Federal award that was not truly spent working on the Federal award. This could result in the Federal Government over-paying for salaries associated with the award. Questioned Costs: Indeterminable. Context: We noted that employees selected for testing did not have completed, detailed timesheets to indicate time spent on the Federal award versus other programs. We also noted instances in which an employee offer letter and employee transition letter were not available for examination. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that SAMU implement formal time tracking policies to require all employees to complete a detailed timesheet in order to track actual time spent on various programs. All timesheets should have evidence of both employee and supervisory approval. Additionally, we recommend that SAMU ensure all salary records for employees are retained.
2022-002—ALLOWABLE COSTS AND ACTIVITIES Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Opportunities For Persons With Aids Assistance Listing Number: 14.241 Federal Award Identification Number and Year: NMH200032-2020 and NMH2001W068- 2020 Award Period: 6/9/2020 – 06/9/2023 for Grant68 and 05/20/2021 – 05/20/2024 for Grant32 Questioned Costs: $453,784.05 Type of Finding • (D) Material Weakness in Internal Control Over Compliance of Federal Awards • (F) Instances of Noncompliance related to Federal Awards Statement of Condition During our testing of allowable activities and costs, we noted a lack of evidence of internal controls over compliance and lack of evidence of compliance for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. Context Internal Control over Compliance 40 transactions out of 40 tested did not have evidence of approval of review of budget to actual, review of allowable activities and allowable costs. The dollar amount of the exceptions were $469,439.37. Compliance 21 transactions out of 40 tested did not have evidence of supporting documentation necessary to determine if the transaction was in compliance with grant requirement. The dollar amount of the exceptions were $453,784.05. Criteria As set forth in 2 CFR part 200 internal controls should be put in place to ensure costs and activities allowable under a Federal award are made in accordance with the government-wide cost principles in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards In addition, § 200.430 Compensation—personal services. (I) Standards for Documentation of Personnel Expenses: charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and 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. Examples of illustrative control activities can be found in OMB Compliance Supplement, part 6—Internal Control, Appendix 2. Some examples of control activities as follows: • Supervisors review and approve invoices, cost allocations, efforts of personnel, fringe benefits and indirect charges for allowability, adherence to cost principles, accuracy, and completeness. • Grant supervisor reviews the budget vs. actual report investigating unusual or unexpected variances and documents results of follow-up work performed. • Journal entries to transfer costs from one project to another are reviewed for appropriateness and approved. Effect The organization does not appear to have sufficient internal controls in place and does not appear to be in compliance with grant requirements as set forth in 2 CFR part 200. The lack of compliance has resulted in a disclaimer of opinion for allowable costs for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. A potential effect of noncompliance of the federal award or future funding decisions could result in disallowance of costs, suspension or termination of the award, or reduction of future allocations. Cause Internal controls over compliance do not appear to have been adequately implemented due to lack of training, oversight, or resources. Recommendation We recommend the organization prevent recurrence of noncompliance by developing and implementing written policies and procedures, conducting regular reviews and reconciliations, provide training and guidance to staff and monitoring compliance View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
2022-002—ALLOWABLE COSTS AND ACTIVITIES Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Opportunities For Persons With Aids Assistance Listing Number: 14.241 Federal Award Identification Number and Year: NMH200032-2020 and NMH2001W068- 2020 Award Period: 6/9/2020 – 06/9/2023 for Grant68 and 05/20/2021 – 05/20/2024 for Grant32 Questioned Costs: $453,784.05 Type of Finding • (D) Material Weakness in Internal Control Over Compliance of Federal Awards • (F) Instances of Noncompliance related to Federal Awards Statement of Condition During our testing of allowable activities and costs, we noted a lack of evidence of internal controls over compliance and lack of evidence of compliance for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. Context Internal Control over Compliance 40 transactions out of 40 tested did not have evidence of approval of review of budget to actual, review of allowable activities and allowable costs. The dollar amount of the exceptions were $469,439.37. Compliance 21 transactions out of 40 tested did not have evidence of supporting documentation necessary to determine if the transaction was in compliance with grant requirement. The dollar amount of the exceptions were $453,784.05. Criteria As set forth in 2 CFR part 200 internal controls should be put in place to ensure costs and activities allowable under a Federal award are made in accordance with the government-wide cost principles in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards In addition, § 200.430 Compensation—personal services. (I) Standards for Documentation of Personnel Expenses: charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and 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. Examples of illustrative control activities can be found in OMB Compliance Supplement, part 6—Internal Control, Appendix 2. Some examples of control activities as follows: • Supervisors review and approve invoices, cost allocations, efforts of personnel, fringe benefits and indirect charges for allowability, adherence to cost principles, accuracy, and completeness. • Grant supervisor reviews the budget vs. actual report investigating unusual or unexpected variances and documents results of follow-up work performed. • Journal entries to transfer costs from one project to another are reviewed for appropriateness and approved. Effect The organization does not appear to have sufficient internal controls in place and does not appear to be in compliance with grant requirements as set forth in 2 CFR part 200. The lack of compliance has resulted in a disclaimer of opinion for allowable costs for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. A potential effect of noncompliance of the federal award or future funding decisions could result in disallowance of costs, suspension or termination of the award, or reduction of future allocations. Cause Internal controls over compliance do not appear to have been adequately implemented due to lack of training, oversight, or resources. Recommendation We recommend the organization prevent recurrence of noncompliance by developing and implementing written policies and procedures, conducting regular reviews and reconciliations, provide training and guidance to staff and monitoring compliance View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
Item: 2022-002 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Item: 2022-003 Assistance Listing Number: 84.425U Programs: COVID-19 - American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Agency: U.S. Department of Education Pass-Through Agencies: Arizona Department of Education Pass-Through Grantor Identifying Number: Unknown Award Year: April 19, 2022 to September 30, 2024 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 182 payroll costs charged to the program, we conducted a non-statistical sample of 18 payroll costs charged to the program. In our sample of 18, we noted that all selections were charged to the program based on estimated allocations determined in advance based on job descriptions and duties. We noted that actual time incurred was not used to charge expenditures to the program. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
Federal Award Programs: U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) Type of Finding: Material weakness in internal control over compliance and instance of immaterial noncompliance. Compliance Requirement: Allowable costs Criteria: The Uniform Guidance (2 CFR §200.430) states that the salaries or wages of employees must be distributed 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 activity. The Organization’s written policies rely on the use of time sheets and activity reports which document actual hours worked by program/grant. Condition: During the course of our audit testing, we noted the Organization changed the process for recording payroll costs to grants and programs for 2022. Rather than charging individual employee payroll costs to grants and programs, the Organization began aggregating total employee hours by grant/program activity. The aggregated hours for each activity were then divided by total hours for each pay period in order to obtain percentages for each respective activity, which were then multiplied by total employee earnings for the pay period as a basis for allocating the payroll costs to activities. The process using aggregated hours for each activity resulted in an improper allocation of payroll costs due to the differing pay rates of employees included in the allocation. Effect and Context: The condition resulted in incorrect amounts of costs and/or unallowable costs charged to the federal programs. All federal programs were impacted by the improper allocation of payroll costs due to the Organization’s aggregation of total employee hours by activity as a basis for allocating total payroll costs for each pay period. As a result, major programs U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) was undercharged by approximately $18,683 and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) was undercharged by approximately $2,864. Our sample size was 40 payroll transactions and was not a statistically valid sample as it was selected haphazardly. We noted all selections in our sample used the improper allocation methodology and all payroll costs for 2022 were improperly allocated among activities benefited. Questioned Costs: None Repeat finding: No Auditor’s recommendation: We recommend management return to the previous process for recording payroll costs to grants and programs by which individual employee salaries and wages are allocated based on actual time spent on various activities and are directly charged to the respective activity cost centers benefited. Management’s response: Management is in agreement with the auditor’s finding and have implemented changes – see MIUSA’s attached corrective action plan.
Federal Award Programs: U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) Type of Finding: Material weakness in internal control over compliance and instance of immaterial noncompliance. Compliance Requirement: Allowable costs Criteria: The Uniform Guidance (2 CFR §200.430) states that the salaries or wages of employees must be distributed 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 activity. The Organization’s written policies rely on the use of time sheets and activity reports which document actual hours worked by program/grant. Condition: During the course of our audit testing, we noted the Organization changed the process for recording payroll costs to grants and programs for 2022. Rather than charging individual employee payroll costs to grants and programs, the Organization began aggregating total employee hours by grant/program activity. The aggregated hours for each activity were then divided by total hours for each pay period in order to obtain percentages for each respective activity, which were then multiplied by total employee earnings for the pay period as a basis for allocating the payroll costs to activities. The process using aggregated hours for each activity resulted in an improper allocation of payroll costs due to the differing pay rates of employees included in the allocation. Effect and Context: The condition resulted in incorrect amounts of costs and/or unallowable costs charged to the federal programs. All federal programs were impacted by the improper allocation of payroll costs due to the Organization’s aggregation of total employee hours by activity as a basis for allocating total payroll costs for each pay period. As a result, major programs U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) was undercharged by approximately $18,683 and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) was undercharged by approximately $2,864. Our sample size was 40 payroll transactions and was not a statistically valid sample as it was selected haphazardly. We noted all selections in our sample used the improper allocation methodology and all payroll costs for 2022 were improperly allocated among activities benefited. Questioned Costs: None Repeat finding: No Auditor’s recommendation: We recommend management return to the previous process for recording payroll costs to grants and programs by which individual employee salaries and wages are allocated based on actual time spent on various activities and are directly charged to the respective activity cost centers benefited. Management’s response: Management is in agreement with the auditor’s finding and have implemented changes – see MIUSA’s attached corrective action plan.
Federal Award Programs: U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) Type of Finding: Material weakness in internal control over compliance and instance of immaterial noncompliance. Compliance Requirement: Allowable costs Criteria: The Uniform Guidance (2 CFR §200.430) states that the salaries or wages of employees must be distributed 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 activity. The Organization’s written policies rely on the use of time sheets and activity reports which document actual hours worked by program/grant. Condition: During the course of our audit testing, we noted the Organization changed the process for recording payroll costs to grants and programs for 2022. Rather than charging individual employee payroll costs to grants and programs, the Organization began aggregating total employee hours by grant/program activity. The aggregated hours for each activity were then divided by total hours for each pay period in order to obtain percentages for each respective activity, which were then multiplied by total employee earnings for the pay period as a basis for allocating the payroll costs to activities. The process using aggregated hours for each activity resulted in an improper allocation of payroll costs due to the differing pay rates of employees included in the allocation. Effect and Context: The condition resulted in incorrect amounts of costs and/or unallowable costs charged to the federal programs. All federal programs were impacted by the improper allocation of payroll costs due to the Organization’s aggregation of total employee hours by activity as a basis for allocating total payroll costs for each pay period. As a result, major programs U.S. Department of State Professional and Cultural Exchange Program – Citizen Exchanges (Assistance Listing # 19.415) was undercharged by approximately $18,683 and U.S. Agency for International Development (USAID) Foreign Assistance for Programs Overseas (Assistance Listing # 98.001) was undercharged by approximately $2,864. Our sample size was 40 payroll transactions and was not a statistically valid sample as it was selected haphazardly. We noted all selections in our sample used the improper allocation methodology and all payroll costs for 2022 were improperly allocated among activities benefited. Questioned Costs: None Repeat finding: No Auditor’s recommendation: We recommend management return to the previous process for recording payroll costs to grants and programs by which individual employee salaries and wages are allocated based on actual time spent on various activities and are directly charged to the respective activity cost centers benefited. Management’s response: Management is in agreement with the auditor’s finding and have implemented changes – see MIUSA’s attached corrective action plan.
Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.
Finding 2022-003: Payroll Allocations Information on the Federal Programs: 98.001 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): 2 CFR 200.430 Compensation – personal services, section (i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that such records be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: InterAction has a timekeeping system in place that provides for employees to record hours worked to specific cost objectives, including to US Government grants. We reviewed the allocation system during the audit, and noted that it automatically and accurately calculates values to be charged to each project reflective of the time recorded by employees. However we noted that in several cases the allocation amounts as per the timekeeping system were different from the amounts ultimately recorded within InterAction's general ledger. While the differences were not significant, these discrepancies indicate a deficiency in the internal controls around recording of salary expenditures to projects. Cause: The primary cause appears to be human error, and the result of manual recordkeeping. Effect or Potential Effect: Salary expenditures that are not charged in accordance with the standards referenced above may be questioned or disallowed by the donor. Questioned Costs: Undetermined Context: Our procedures included testing a sample of 40 salary transactions. We noted variances of the nature described above for 36 of the 40 samples tested. The issue appears to be systemic. Identification as a Repeat Finding, if Applicable: N/A. Recommendation: We recommend that management revisit its procedures for transferring data from the timekeeping system to the general ledger and implement proper internal controls to ensure that the amounts of salary expenditures charged to grants in the general ledger reconcile to the amounts calculated by the timekeeping system.
2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states 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 adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states 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 adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states 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 adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, 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.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “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…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.