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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
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: 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: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, 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 Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: 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. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.430(i) states that “charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: 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: The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.430(i) states that “charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: 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: The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. 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 ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Finding 2022-001 Significant deficiency in internal control over allowable costs. Federal Agency: Department of the Treasury Program Title: Emergency Rental CFDA Number: 21.023 Award Numbers: OH21-BBP1 Award Period: May 15, 2021 ? September 30, 2022 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E section 200.430 requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition/Context for Evaluation During our audit, we tested salary costs charged to the federal award, noting compensation expenses consisted of the entire salary of one employee who did not work on more than one federal award and allocated compensation costs for multiple other employees. Allocated compensation costs were charged to the award based upon budget estimates which were not adjusted for actual time dedicated to the award and did not support the distribution of salary or wages among specific cost objectives. Questioned Costs Not applicable Effect or Potential Effect The Organization may have charged costs to the federal award in excess or below actual benefit received by the award. Repeat Finding Partially, see prior year finding 2021-002 Recommendation We recommend the Organization implement the necessary internal controls to ensure documentation is retained to support actual effort spent on federal awards. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Federal Program Information: WIOA Pilots, Demonstrations, and Research Projects (ALN#: 17.261) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): B. Allowable Costs/Cost Principles ? 2 CFR 200 Subpart E- Cost Principles ? 200.430 Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits which are addressed in ? 200.431. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. Condition: An instance was identified where BGCA allocated costs in excess of actual services rendered. Cause: Insufficient internal controls and administrative oversight with respect to payroll and fringe expenditure allocation based on approved hours worked on federal grant. Effect: BGCA was not in compliance with allowable cost requirements. Questioned Costs: Amount was below reportable threshold. Context: For 1 of 5 employees selected for testing, payroll expenditures and fringe benefits were allocated to the grant in excess of actual hours worked. Consequently, the overallocated expenditures were submitted and approved for reimbursement in excess of actual expenses incurred. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend BGCA enhance its internal controls and policies and procedures over allocation of payroll and fringe expenditures to federal grants based on actual hours worked. Views of Responsible Officials and Planned Corrective Actions: Management will implement a new quality review process to ensure that correct default fund codes are assigned to staff for the DOL WPY grant. In addition, management will implement a complete oversight review of all grant time charges in advance of the execution of a drawdown of DOL funds.
Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, 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 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (the following is not a comprehensive list of requirements): ** Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. ** Be incorporated into the official records of the non-Federal entity. ** Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ** Encompass both federally assisted, and all other activities compensated by the non- Federal entity on an integrated basis but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. ** Comply with the established accounting policies and practices of the non-Federal entity. ** Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The City did not have records to adequately support payroll costs of the DDPHE Department Director allocated to the program. Cause: The City does not require employees working on multiple programs to certify their time and effort spent on each program. Time charged for the Director was based on a flat rate percentage of 25%; there was no support for the percentage used. Effect or Potential Effect: Payroll expenditures charged to the grant may be in excess of actual time and effort devoted to the program. Questioned Costs: The total amount of payroll charged to the program for the DDPHE Department Director of $26,816 (25% of the Director?s annual salary). Context: During follow-up on a prior year finding (2021-015), BDO noted the City had not yet implemented corrective action with respect to how time and effort should be recorded and had not performed periodic reviews to true-up time to the actual time and effort spent on the grant. For the year ended December 31, 2022, a portion of the Director?s salary in the amount of $26,816 was charged to the grant without documentation of time and effort. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2021-015 in the 2021 report. Recommendation: The Department should implement policies and procedures pertaining to employees not 100% funded by grant programs. These policies and procedures should outline how time and effort should be recorded and provide for periodic reviews to true-up time to the actual time and effort spent on the grant. Views of Responsible Officials: The City agrees with the finding and has implemented a process requiring review and approval of personnel costs that are allocated to the grant at less than 100%. For additional information, see the City?s separate report for planned corrective action.
Finding 2022-002: Failure to Maintain Proper Documentation of Time and Effort Reporting Federal Agency: U.S. Department of Health and Human Services (HHS) Program Name: Illinois SOR2 ALN and Program Expenditures: 93.788 ($1,232,160) Federal Award Numbers: H79TI083278 Federal Award Year: 2022/2023 Questioned Costs: None Compliance Requirement: Allowable Costs Type of Finding: Material Weakness and Material Noncompliance Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 27 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Management: There is an understanding of the finding, and a need for corrective action. Actions have already been put into place to improve internal controls and ensure compliance in maintaining proper documentation of time and effort reporting for federal awards.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-001 Documentation of Personnel Expenses (Timesheets) Material Weakness Criteria: Generally accepted accounting principles in the United States (GAAP) requires entities to establish and maintain effective internal controls over financial reporting to ensure accurate financial reports. A good system of internal controls requires contemporaneous timesheets be maintained for all employees and the timesheets should be signed by both the employee and the supervisor. 2 CFR Section 200.430 also requires charges to federal awards for salaries and wages to be based on records that accurately reflect the work performed. Condition: A sample of ten employees was selected from four payrolls throughout the year under audit. 27 employees did not have timesheets. Cause: Management believed that full-time salaried employees did not require a timesheet. Effect: Contemporaneous documentation was not obtained from employees. Subsequent, employees signed certifications for the allocation of their time. Auditor?s Recommendation: We recommend that management require all employees to complete a timesheet which includes all required UG elements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and has already taken corrective action. On January 1, 2023 an electronic time reporting function was put into effect through ADP (?Automatic Data Processing?), the company?s payroll processing system. This improvement allows employees to enter their time and select a cost center (?department code?) at the time of entry. It then routes the timesheet for approval by the supervisor before reaching the accounting department for payment initiation, resulting in an automated review and approval.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-001 Documentation of Personnel Expenses (Timesheets) Material Weakness Criteria: Generally accepted accounting principles in the United States (GAAP) requires entities to establish and maintain effective internal controls over financial reporting to ensure accurate financial reports. A good system of internal controls requires contemporaneous timesheets be maintained for all employees and the timesheets should be signed by both the employee and the supervisor. 2 CFR Section 200.430 also requires charges to federal awards for salaries and wages to be based on records that accurately reflect the work performed. Condition: A sample of ten employees was selected from four payrolls throughout the year under audit. 27 employees did not have timesheets. Cause: Management believed that full-time salaried employees did not require a timesheet. Effect: Contemporaneous documentation was not obtained from employees. Subsequent, employees signed certifications for the allocation of their time. Auditor?s Recommendation: We recommend that management require all employees to complete a timesheet which includes all required UG elements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and has already taken corrective action. On January 1, 2023 an electronic time reporting function was put into effect through ADP (?Automatic Data Processing?), the company?s payroll processing system. This improvement allows employees to enter their time and select a cost center (?department code?) at the time of entry. It then routes the timesheet for approval by the supervisor before reaching the accounting department for payment initiation, resulting in an automated review and approval.
2 C.F.R. ? 2400.101 provides that unless excepted under 24 CFR chapters I through IX, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth in 2 CFR part 200, shall apply to Federal Awards made by the Department of Housing and Urban Development to non-Federal entities. 2 C.F.R. ? 200.430(a)(1) states, in part, costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities. In addition, 2 C.F.R. ? 200.430(i)(1) states, in part, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity; and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. 2 C.F.R. ? 200.430(i)(1)(viii) further states that 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 the subsequent provisions are met. Due to a lack of internal controls over federal compensation costs, Erie County General Health District ultimately paid employee wages based on pre-determined budget percentages rather than actual time worked for the Assistance Listing Number #14.900 Lead-Based Paint Hazard Control in Privately-Owned Housing federal grant program. This error resulted in $810 in salary payments being incorrectly charged to the program. Failure to have the proper controls in place to ensure the accuracy of reported payroll costs could result in the Department of Housing and Urban Development taking action against the District for failure to comply with programmatic requirements. The District should implement and have controls in place to ensure salaries and wages are properly charged to federal programs.
Federal Agency: U.S. Department of Commerce Compliance Requirement: Allowable Costs Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: For some employees working under the coronavirus grants, timesheets were submitted and approved several months after the grant period ended. As a result, payroll costs charged to the grant were based on budgeted amounts rather than actual hours worked per timely submitted timesheets. Criteria: 2 CFR 200.430(i) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Timesheets must be submitted and approved in a timely manner. Cause: CRMSDC's internal controls over payroll charging practices for the federal program were not properly implemented to ensure timesheets were completed and approved promptly. Effect: CRMSDC's actual payroll costs per the late timesheets exceeded the budgeted amount charged to the grant. Questioned Costs: No overcharge costs resulted since CRMSDC charged less than actual supported costs. Recommendation: We recommend CRMSDC implement proper internal controls to ensure timesheets are completed, submitted, reviewed, and approved prior to payroll processing and charging payroll costs to the federal program. Supervisors should be required to review timesheets for appropriateness and accuracy. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section
Section III - Federal Awards Findings Finding 2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Microloan Technical Assistance Program Federal Assistance Listing Number: 59.046 Compliance Requirements: Allowable costs/Cost Principles Type of Finding: Significant Deficiency 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 be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition The Organization was reporting budgeted hours in the quarterly reimbursement requests rather than actual hours worked for the Technical Assistance Microloan Program. Context: A sample of 3 employees were selected from a population of 22 employees. We identified exceptions in 1 out of the 3 employees' timecards we tested. One employee charged budgeted hours to their timecard as opposed to actual hours. This caused CDC to overcharge the program by $5,879. Cause: Insufficient supervisor review led to supervisors approving budgeted time as opposed to actual time. Effect or Potential Effect: CDC Small Business Finance Corp. was not in compliance with the terms and conditions of the award, nor with the allowable costs/cost principle requirement of the Uniform Guidance. Questioned Costs: N/A Identification as a Repeat Finding This finding is not a repeat finding. Auditor's Recommendation: CDC should ensure that supervisors have adequate training to properly review employee timecards to ensure that actual hours worked are appropriately charged to the Technical Assistance Program. Views of Responsible Officials CDC's management performed a review of all payroll charges submitted to the U.S. Small Business Administration ("SBA") in relation to the Microloan Technical Assistance Program and noted that CDC had been overcharging the SBA for multiple years. CDC's management notified the SBA of the discrepancy and worked with the SBA to determine the amount to reimburse the SBA. The SBA accepted the reimbursement as well as management's proposed resolution.
Finding 2022-010 Program Affected: 66.818 Brownfields Assessment and Cleanup Cooperative Agreements U.S. Environmental Protection Agency Contract year: 2022 FAIN: 00A00664 / 00A00676 / 00A00909 Criteria: 2 CFR ?200.430(i) specifies that "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated..." Condition and Context: The Organization did not maintain documentation of what program the employee or the paid consultant expended time and effort on, and therefore was charging an estimated amount of time to the federal program that is not directly supported by a timecard or invoices. Additionally, the rate charged was not directly calculated based on the rate that the employee and the consultant were paid, but rather the Organization billed the federal program for an estimate which approximated the rate they were paid. During our nonstatistical sampling of costs, we noted 6 of 6 transactions tested were not properly supported. Cause and Effect: The Organization does not have internal processes to properly document and retain records which would appropriately support the amounts charged to the federal grant. The Organization does not have processes in place to properly document and retain the review of the calculation of billings charged to the federal grant. As a result, the Organization would not be able to properly identify unallowable costs charged to the major federal program. Questioned Costs :N/A Identification of Repeat Findings N/A Recommendation : We recommend the Organization bill the major federal program based on actual hours and rates charged by employees and contractors. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding. See attached Planned Corrective Actions.
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: 14.889 - Choice Neighborhoods Implementation Grants Federal Award Year: 2022 Name of Pass-Through Entity: Cuyahoga Metropolitan Housing Authority; City of Detroit 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; and (iv) Support the distribution of the employee's salary or wages among specific activities. Condition: The Community Builders, Inc. and Subsidiaries (the ?Company?) used grant budgets as the only support for the salaries and wages charged to the grants under the Choice Neighborhoods Implementation Grants program, which is specifically disallowed per Paragraph (i)(1)(viii) of 2 CFR 200.430. Cause: Management did not implement internal control procedures to comply with the regulations for documentation of personnel expenses. Effect: Salary and wage costs may be charged to the program that are inaccurate, unallowable, or not properly allocated. Questioned Costs: The questioned costs relate to six employees whose salaries and wages charged to the program are allocated at less than 100%. The total charges for these employees were calculated as $73,804. Context: The audit finding is prevalent because it relates to payroll charges allocated on a bi-weekly basis and to requests for reimbursement processed monthly for the City of Detroit grant and periodically for the Cuyahoga Metropolitan Housing Authority (?CMHA?) grant and is not an isolated instance as it relates to the Company not implementing appropriate and complete record keeping procedures for the federal program to comply with the regulations for documentation of personnel expenses. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Company should establish a system of internal controls to provide reasonable assurance that salary and wage costs are accurate, allowable, and properly allocated by basing salaries and wages charged to federal awards on underlying records that accurately reflect all work performed on a daily basis in accordance with 2 CFR 200, Subpart E, Subsection 430.
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: 14.889 - Choice Neighborhoods Implementation Grants Federal Award Year: 2022 Name of Pass-Through Entity: Cuyahoga Metropolitan Housing Authority; City of Detroit 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; and (iv) Support the distribution of the employee's salary or wages among specific activities. Condition: The Community Builders, Inc. and Subsidiaries (the ?Company?) used grant budgets as the only support for the salaries and wages charged to the grants under the Choice Neighborhoods Implementation Grants program, which is specifically disallowed per Paragraph (i)(1)(viii) of 2 CFR 200.430. Cause: Management did not implement internal control procedures to comply with the regulations for documentation of personnel expenses. Effect: Salary and wage costs may be charged to the program that are inaccurate, unallowable, or not properly allocated. Questioned Costs: The questioned costs relate to six employees whose salaries and wages charged to the program are allocated at less than 100%. The total charges for these employees were calculated as $73,804. Context: The audit finding is prevalent because it relates to payroll charges allocated on a bi-weekly basis and to requests for reimbursement processed monthly for the City of Detroit grant and periodically for the Cuyahoga Metropolitan Housing Authority (?CMHA?) grant and is not an isolated instance as it relates to the Company not implementing appropriate and complete record keeping procedures for the federal program to comply with the regulations for documentation of personnel expenses. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Company should establish a system of internal controls to provide reasonable assurance that salary and wage costs are accurate, allowable, and properly allocated by basing salaries and wages charged to federal awards on underlying records that accurately reflect all work performed on a daily basis in accordance with 2 CFR 200, Subpart E, Subsection 430.
2022-003 Department of Education and Passed through State of South Dakota Department of Education Federal Financial Assistance Listing #84.425C, 2021G-798, 03/13/2020 ? 09/30/2022 COVID-19 Education Stabilization Fund - Governor?s Emergency Education Relief (GEER) Fund Federal Financial Assistance Listing #84.287C, 21-80064-22, 21-80064-23, 7/1/2021 ? 6/30/2022, 7/1/2022 ? 6/30/2023 Twenty-First Century Community Learning Centers Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: The amount of payroll taxes allocated to the GEER program exceeded the amount of payroll taxes actually paid for two of two employees tested. Additionally, one instance in which an employee?s overtime hours was not charged to the Twenty First Century Program. Lastly, one instance in which one employee?s biweekly wages were not charged to the Twenty First Century Program. Cause: Tracking of grant-related payroll is a manual process which increases the likelihood of error. Effect: Payroll and related costs were not properly reported by an insignificant amount. Questioned Costs: None reported Context: For the GEER program, a non-statistical sample of 6 employees were selected for testing of approximately 17 total employees whose time was charged to the federal award. The 6 employees selected for testing accounted for $53,784 of the $146,073 payroll costs charged to the federal award in the fiscal year. For the Twenty First Century Community Learning Centers Program, a non-statistical sample of 60 expenditures were selected for testing, including 56 payroll transactions and 4 nonpayroll transactions. The 56 payroll transactions accounted for $35,585 of $213,359 total payroll costs charged to the federal award. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
2022-003 Department of Education and Passed through State of South Dakota Department of Education Federal Financial Assistance Listing #84.425C, 2021G-798, 03/13/2020 ? 09/30/2022 COVID-19 Education Stabilization Fund - Governor?s Emergency Education Relief (GEER) Fund Federal Financial Assistance Listing #84.287C, 21-80064-22, 21-80064-23, 7/1/2021 ? 6/30/2022, 7/1/2022 ? 6/30/2023 Twenty-First Century Community Learning Centers Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: The amount of payroll taxes allocated to the GEER program exceeded the amount of payroll taxes actually paid for two of two employees tested. Additionally, one instance in which an employee?s overtime hours was not charged to the Twenty First Century Program. Lastly, one instance in which one employee?s biweekly wages were not charged to the Twenty First Century Program. Cause: Tracking of grant-related payroll is a manual process which increases the likelihood of error. Effect: Payroll and related costs were not properly reported by an insignificant amount. Questioned Costs: None reported Context: For the GEER program, a non-statistical sample of 6 employees were selected for testing of approximately 17 total employees whose time was charged to the federal award. The 6 employees selected for testing accounted for $53,784 of the $146,073 payroll costs charged to the federal award in the fiscal year. For the Twenty First Century Community Learning Centers Program, a non-statistical sample of 60 expenditures were selected for testing, including 56 payroll transactions and 4 nonpayroll transactions. The 56 payroll transactions accounted for $35,585 of $213,359 total payroll costs charged to the federal award. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
2022 ? 001 DOCUMENTATION OF PERSONNEL EXPENSES CHARGED TO FEDERAL AWARDS Criteria: 2 CFR ? 200.430 explains that personnel expenses charged to multi-funding sources have adequate authorization and specific activities be documented. Condition: During our testing of the HHS Two Generational Mental Health (Block Grants for Community Mental Health Services), authorized timesheets were not able to be observed, and allocation of different funding activities were not formally documented. Cause: Mountain Home Montana, Inc. needs to authorize Federal and non-Federal activities in a documented support to show Federal payroll activities of the Grant. Effect: Uniform Guidance timesheet support documentation is not adhered to as the Federal grant requires. Recommendation: We recommend that management implement internal control policies, that supports timesheet approval with time sheet activities associated with each different funding level. These timesheets need to be able to support the salary levels and be reproduced with approval signatures to support the Federal expenditures.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(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; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(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; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(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; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 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 Section 200.431 - Compensation - Fringe Benefits: ?The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in ? 200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.? Per 2 CFR Section 200.430 - Compensation ? Personnel 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: (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.? In addition, per 2 CFR Section 200.403 regarding all direct costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: We noted that Safe & Sound allocated fringe benefits during 2022 based on a flat percentage of salaries charged to the grant based on a methodology determined during the budget making process. The methodology was isolated to charges of fringe benefits. In addition, shared costs (e.g., insurance and occupancy) during 2022 were charged on a monthly basis as one twelfth of the total budgeted amount for the year. The methodology was isolated to certain shared costs. Safe & Sound does not have a process in place to true-up certain costs charged based on budget during interim periods to actual amounts. Context: Total fringe benefits charged to the grant were $38,534. Total shared costs charged to the grant were $16,536. Cause: Safe & Sound did not have policies and procedures in place to review and reconcile the budgeted amounts of fringe benefits or shared costs charged to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted totals are reasonable and reconcile to the actual time spent on the program, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement. Safe & Sound is entitled to under the terms of the grant. Questioned Costs: $55,070 Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound 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. In addition, we recommend training be provided to staff on requirements of their federal grants. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actuals are properly supported.
Federal Program Information: Funding Agency: U.S. Department of Education Title: Teacher & School Leader Incentive Program Assistance Listing: 84.374 A Passthrough: N/A Award Year: 2022 Criteria: 2 CFR Chapter I, and Chapter II, Parts 200, 215, 220, 225, and 230 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards ? 200.430 Compensation ? personal services (i) Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system 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 compensation activities (for IHE, this per the IHE?s definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity (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: The Foundation does not have a system of internal control to accurately track personnel costs when the individual works on more than one program. The Foundation makes a good-faith effort to budget an individual?s time based on their best estimate of the distribution of the employee?s time over the various programs. However, the Foundation?s employees were not required to track their time on a daily basis and identify which program was worked on during that day. The Foundation did not require those employees who are assigned to multiple cost programs to track and certify their time. The Foundation did not ?true-up? actual time versus budgeted time for the various programs during the year. Questioned Costs: None Cause: The Foundation had not implemented a method to track time for employees allocated between multiple program costs and to adjust those costs based on actual time spent on the programs. The Foundation believed that their goodfaithed effort to budget accurately an employee?s time was sufficient to meet the personnel requirements. Since bringing this to the attention of the Foundation, it has implemented a method for employees to properly track their time by program and to square-up their time to actual time on a timely and consistent basis. Effect: The Foundation is not in compliance with Federal regulations related to the grant and could put funding in jeopardy or require the Foundation to reimburse the program. Auditor?s Recommendation: The Foundation should implement internal control policies and procedures which require employees who work under two or more programs to track their time in a method that allows for proper allocation of expenses between those programs. Additionally, the Foundation should implement a process for employees to certify that their time is properly tracked and allocated. Finally, the Foundation should implement a time-frame to adjust budgeted salaries to actual salaries based upon the tracking performed by employees. Responsible official?s view: ? Specific corrective action plan for finding: Dr. Linda Coy in conjunction with James Coy, CFO and Patty Eaton, Business Manager have developed a revised process of collecting T & E data from employees affected by this action. Each affected employee will collect daily activities tied to the percentage of time allocated to their respective positions and submit on a monthly basis to the business office. The business office will calculate the time spent on each project and provide that information back to the employee for adjustment during the following month. The documentation, for each employee that is part of this process will be available to the auditors during the next audit cycle. The HR department will maintain these files for inspection. ? Timeline for completion of corrective action plan: After consultation with the auditors, it was decided that the effective date for implementation is September 1, 2023. ? Employee position(s) responsible for meeting the timeline: Dr. Linda Coy, Three Rivers Education Foundation Director & James L. Coy CFO
Finding 2022-005 Assistance Listing and State ID Numbers: 93.563 and 437.7502 Program Titles: Child Support Enforcement and CS State GPR/PR Funding Allocation Award Number / Year: 437.7502 / 2022 Pass-Through Entity: Wisconsin Department of Children and Families Criteria: 2 CFR section 200.430(i)(1)(viii)(C) requires the system of internal controls to include processes to conduct after-the-fact reviews of interim charges made to federal awards based on budget estimates used to charge salaries and wages. All necessary adjustments must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition/Context: One of the thirty-seven payroll transactions tested was more than actual costs incurred due to incorrect payroll information being used to calculate the payroll expense. Our sample was not statistically valid. Cause: The payroll cost allocation spreadsheet was not properly reviewed against the payroll system. Effect: Payroll costs were overcharged to the award. Questioned Costs: Questioned costs of $269 related to excess payroll charges are reported in accordance with the thresholds of the Wisconsin State Single Audit Guidelines and relate to expenditures funded by both federal and state sources, specifically 93.563 Child Support Enforcement and 437.7502 CS State GPR/PR Funding Allocation. Recommendation: The County should review its internal control procedures to ensure there are proper review and approval processes over payroll information used to calculate amounts claimed for grant reimbursement. Management's Response: The reimbursement reports prepared by the Clerk of Courts will be reviewed by a person other than the preparer to ensure accuracy. The review will be completed before the reimbursement request is submitted to Child Support.
2022-001 Compensation for Personal Services (Repeat Finding) Food Insecurity Nutrition Incentive Grants Program ? Assistance Listing Number 10.331 ? Award Period: September 1, 2020 through August 31, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: During our testing of time and effort records we noted that actual time spent working on different funding sources/cost objectives was not tracked. Instead, percentage of time was documented on the timesheet then multiplied by the number of work hours in the month. Percentage of time did not change from month to month indicating budgeted allocations were used. Criteria: According to 2 CFR Part 200.430(i)(1), Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (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. Additionally, 2 CFR Part 200.430(i)(7) states, For Federal awards of similar purpose activity or instances of approved blended funding, a non-Federal entity may submit performance plans that incorporate funds from multiple Federal awards and account for their combined use based on performance-oriented metrics, provided that such plans are approved in advance by all involved Federal awarding agencies. In these instances, the non-Federal entity must submit a request for waiver of the requirements based on documentation that describes the method of charging costs, relates the charging of costs to the specific activity that is applicable to all fund sources, and is based on quantifiable measures of the activity in relation to time charged. Cause: The Organization used budgeted allocations to charge salaries and wages to Federal awards without documentation of reconciliation after-the-fact to actual time worked on different funding sources/cost objectives. Effect: Costs for salaries and wages were not fully supported by documentation in accordance with 2 CFR Part 200.430. Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency. Recommendation: The Organization should strengthen policies and procedures to support a system of internal control which provides a reasonable assurance that the charges to Federal awards for salaries and wages are accurate, allowable, and properly allocated. This might include: 1. Improving timesheet tracking to charge actual time spent working on different funding sources/cost objectives, or 2. Establishing a process to periodically review after-the-fact interim charges made to Federal awards based on budget estimates, make timely adjustments, and document their reconciliation or 3. If applicable, obtain a waiver from all involved Federal awarding agencies for blended funding and charge costs based on the approved performance plan. Views of Responsible Officials and Planned Corrective Actions: Management agrees. See separately issued Corrective Action Plan.
Finding 2022-001 U.S. Department of Education Native Hawaiian Education Assistance Listing No. 84.362A Criteria ? Under Section 200.405 of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined, the costs may be allocated on a reasonable documented basis. Under Section 200.430 of the Uniform Guidance, salaries and wages charged to federal awards must be based on records that accurately reflect the work performed. Condition ? During the audit for the year ended December 31, 2022, the bases used to allocate nonpayroll costs to two or more programs were not adequately documented. In addition, salaries and wages charged to federal awards were not based on records that accurately reflected the work performed. Cause ? The Organization did not document the basis for the allocation of nonpayroll costs to its various federal programs. The Organization did not maintain records that accurately reflected the work performed on its federal programs. Salaries and wages charged to federal awards were based on budgeted amounts. Effect or Potential Effect ? Nonpayroll costs that benefit more than one federal program may be misallocated among federal and other programs. Salaries and wages for employees who work on more than one federal program may be misallocated among federal and other programs. Questioned Costs ? Unknown. Context ? The Organization had $573,039 in nonpayroll costs and $417,366 in salaries and wages included in its federal expenditures during the year ended December 31, 2022. Recommendation ? Maintain documentation to support the allocation of nonpayroll costs between two or more programs. Maintain documentation, such as a timesheet or certified statement, to substantiate the salaries and wages charged to the federal programs that is based on the actual time worked by personnel. Responsible Official?s Response and Corrective Action Planned ? Refer to the Corrective Action Plan.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Continuum of Care, CFDA # 14.267 2022-001: Criteria: According to 2 CFR 200.430 i(i)(vii) charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and there should be support to the distributions of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award. Condition: In gaining our understanding of controls over payroll, we noted the following control: the majority of the employees at Housing Forward and Subsidiary work for only one grant with the exception of management that may work for two. We viewed 40 timesheets related to the CoC program of which twelve showed the employee working for multiple grants but did not include the number of hours worked for each program on the timesheet, it was tracked through management and staff. Cause: The timesheets that were missing a breakdown of time and effort applied to each grant did not have a detailed tracking of hours by grants to remind employees to allocate their time by grant. The allocation was made based on a percentage rather than the actual time worked. Effect: The hours charged to a program could be under or overstated based budget compared to actual hours that should be documented on the timesheets. Auditor?s Recommendation: We recommend that the timesheets revised to either have ability to breakout the hours per day by grant and remind staff the importance to track their time by funder. Management Response: Employees have transitioned to submitting time and effort bi-weekly within the ADP payroll system to ensure timeliness of allocation of wages. Hours will be reported based on actual time worked in projects, even when employees are working in a single project. These hours are used to allocate salaries and wages and unpaid time off bi-weekly. Fringe benefits will be allocated on a monthly basis using the allocation of hours for that month. Allocation of hours and coding is reviewed by the Finance department for accuracy and allowance before submittal of payroll. If changes are needed after processing, Finance staff will work with staff to correct time and effort reporting through a manual time and effort report.
2022-003 Department of Justice Passed through State of South Dakota Department of Public Safety Federal Financial Assistance Listing #16.575 2022-COMBO-VA018, 7/1/2021 ? 6/30/2022; 2023-COMBO-VA023, 7/1/2022 ? 6/30/2023 Crime Victim Assistance Activities Allowed or Unallowed and Allowable Costs/Cost Principles Material Weakness in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: Our testing over payroll expenditures charged to federal program identified nine instances in which percentage of VOCA hours worked per employee timesheet differed from the percentage of VOCA hours charged to the federal program. Cause: The Organization?s internal control process did not detect the errors. Effect: The Organization?s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Organization could submit disallowed costs under the federal awards. Questioned Costs: No questioned costs Context: A nonstatistical sample of 60 expenditures were selected for testing, including 40 payroll transactions out of approximately 300 total payroll transactions, accounting for approximately $54,423 of $494,822 total payroll costs charged to federal program and 20 non-payroll transactions out of approximately 1,160 total nonpayroll transactions, accounting for approximately $26,192 of $244,249 total non-payroll costs charged to the federal program. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management to review payroll policies and procedures over the tracking of time and allocation of wages with related program employees. Views of Responsible Officials: Management is in agreement.
FINDING 2022-005 Subject: CDBG - Entitlement Grants Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 - Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-19-MC-18-0015, B-20-MC-20-0015, B-20-MW-18-0015, B-21-MC-18-0015, B-22-MC-18-0015 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-003. Condition and Context Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income - Use Payroll The City charged employee salaries for Community Development Block Grants/Entitlement Grants (grant) activities to the grant based on fixed percentages. Adequate time and effort records were not maintained to support the percentages charged to the federal award. Two employees were paid from the grant funds during the audit period: ? The first employee's salary and benefits were being paid 50 percent from federal grant funds. However, documentation to support the distribution of the employee's pay (i.e., time and effort logs) did not begin until November 19, 2022. The amount paid from the beginning of the audit period until November 19, 2022, was $48,677. As this amount was not adequately supported, it is considered questioned costs. ? The second employee was paid 100 percent from the federal grant. The City made a payroll correction to remove the employee's pay for the months of July through December. After the payroll adjustment, there was a remaining amount of payroll and benefits of $5,611 for the period of July through December charged to the grant which lacked supporting documentation that the costs were appropriate for the grant. This amount, $5,611, is considered questioned costs. Vendor Late fees and taxes were paid from the federal grant funds. A total of $51 was paid in late fees and sales tax during the audit period. This amount was determined to be a questioned cost. Program Income - Determining or Assessing and Recording Program income is gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award during the period of performance. Program income is to be recorded in the unit's financial system along with the Housing and Urban Development (HUD) nationwide database, the Integrated Disbursement and Information System (IDIS). The City recorded program income in the accounting ledger for the sale of a Neighborhood Stabilization Property. After determining an approval process would be necessary to consider this program income, a request was sent to the HUD. Prior to receiving permission to include the sale as program income to the federal grant, an adjustment was made to transfer this program income to another fund. It was later recorded in the IDIS as program income but was never adjusted back into the unit's federal grant fund designated for this grant. The internal controls in place were not effective to ensure the amounts recorded in the accounting ledger and the amounts recorded in the IDIS agree and are accurate. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.430(i)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." 24 CFR 570.504(a) states: "Recording program income. The receipt and expenditure of program income as defined in ? 570.500(a) shall be recorded as part of the financial transactions of the grant program." 24 CFR 570.504(b)(2) states in part: "If the recipient chooses to retain program income, that program income shall be disposed of as follows: . . . (ii) Substantially all other program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U.S. Treasury. . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payments were made that resulted in questioned costs. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were known questioned costs of $54,288. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place over payroll, benefits, and vendor payments, as well as the proper recording of program income for the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-005 Subject: CDBG - Entitlement Grants Cluster - Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income Federal Agency: Department of Housing and Urban Development Federal Programs: Community Development Block Grants/Entitlement Grants, COVID-19 - Community Development Block Grants/Entitlement Grants Assistance Listings Number: 14.218 Federal Award Numbers and Years (or Other Identifying Numbers): B-19-MC-18-0015, B-20-MC-20-0015, B-20-MW-18-0015, B-21-MC-18-0015, B-22-MC-18-0015 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2021-003. Condition and Context Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Program Income - Use Payroll The City charged employee salaries for Community Development Block Grants/Entitlement Grants (grant) activities to the grant based on fixed percentages. Adequate time and effort records were not maintained to support the percentages charged to the federal award. Two employees were paid from the grant funds during the audit period: ? The first employee's salary and benefits were being paid 50 percent from federal grant funds. However, documentation to support the distribution of the employee's pay (i.e., time and effort logs) did not begin until November 19, 2022. The amount paid from the beginning of the audit period until November 19, 2022, was $48,677. As this amount was not adequately supported, it is considered questioned costs. ? The second employee was paid 100 percent from the federal grant. The City made a payroll correction to remove the employee's pay for the months of July through December. After the payroll adjustment, there was a remaining amount of payroll and benefits of $5,611 for the period of July through December charged to the grant which lacked supporting documentation that the costs were appropriate for the grant. This amount, $5,611, is considered questioned costs. Vendor Late fees and taxes were paid from the federal grant funds. A total of $51 was paid in late fees and sales tax during the audit period. This amount was determined to be a questioned cost. Program Income - Determining or Assessing and Recording Program income is gross income earned by a non-federal entity that is directly generated by a supported activity or earned as a result of the federal award during the period of performance. Program income is to be recorded in the unit's financial system along with the Housing and Urban Development (HUD) nationwide database, the Integrated Disbursement and Information System (IDIS). The City recorded program income in the accounting ledger for the sale of a Neighborhood Stabilization Property. After determining an approval process would be necessary to consider this program income, a request was sent to the HUD. Prior to receiving permission to include the sale as program income to the federal grant, an adjustment was made to transfer this program income to another fund. It was later recorded in the IDIS as program income but was never adjusted back into the unit's federal grant fund designated for this grant. The internal controls in place were not effective to ensure the amounts recorded in the accounting ledger and the amounts recorded in the IDIS agree and are accurate. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.430(i)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." 24 CFR 570.504(a) states: "Recording program income. The receipt and expenditure of program income as defined in ? 570.500(a) shall be recorded as part of the financial transactions of the grant program." 24 CFR 570.504(b)(2) states in part: "If the recipient chooses to retain program income, that program income shall be disposed of as follows: . . . (ii) Substantially all other program income shall be disbursed for eligible activities before additional cash withdrawals are made from the U.S. Treasury. . . ." Cause A proper system of internal controls was not designed by management of the City. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the City's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, payments were made that resulted in questioned costs. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the City. Questioned Costs There were known questioned costs of $54,288. Recommendation We recommended that management of the City design and implement a proper system of internal controls, including policies and procedures that would provide segregation of duties to ensure appropriate reviews, approvals, and oversight are taking place over payroll, benefits, and vendor payments, as well as the proper recording of program income for the grant. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
2 CFR ?2400.101 gives regulatory effect to the Department of Housing and Urban Development for 2 CFR ?200.303(a) states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Furthermore, 2 CFR ?200.430(i)(1)(i) states "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. During testing of payroll expenses for AL #14.218 CDBG Entitlement Grant Cluster, we noted the City utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the City?s established internal control procedures did not occur for six out of 40 timesheets. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee?s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Failure to ensure all time sheets are appropriately approved by a knowledgeable supervisor could result in unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the City review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.