FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-047 STATE AGENCY: Oklahoma State Department of Education (OSDE) FEDERAL AGENCY: United States Department of Education (USDE) ALN: 84.010; 84.027; 84.173; 84.425 – 84.425D & U FEDERAL PROGRAM NAME: Title I – Grants to Local Educational Agencies; Special Education IDEA, Part B and Preschool; Education stabilization Fund (ESF) - Elementary and Secondary School Emergency Relief (ESER) Fund and American Rescue Plan – Elementary and Secondary Schools Emergency Relief Fund (ARP ESSER) FEDERAL AWARD NUMBER: S010A220036; H027A220051-22A; H173A220084; S425D210024, S425U210024 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Activities Allowed or Unallowed; Allowable Costs/Cost Principles QUESTIONED COSTS: $0 Criteria: 2 CFR § 200.430 Compensation—personal services states in part, “(g) 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and (vi) 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 allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) Budget estimates (meaning, 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 performed; (B) Significant changes in the related work activity (as defined by the recipient's or subrecipient's written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient's or subrecipient's system of internal controls includes processes to perform periodic afterthe- fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. (viii) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. Condition and Context: Charges to Federal awards (Title IA, Special Education IDEA and IDEA Preschool, ESF – ESSER II and ARP ESSER III) for salaries and wages were not based on records that accurately reflect the work performed and were not properly allocated. While documenting controls, SAI requested the time and effort data for payroll totaling $7,493,331.34 charged to the Title IA, Special Education and the ESF – ESSER II and ARP ESSER III programs; however, OSDE did not provide the data requested. In addition, the United States Department of Education (USDOE) in their Consolidated Performance Review of Oklahoma dated July 25, 2024, (which included the SFY 23 audit period), noted that OSDE had used estimates to allocate payroll costs to federal awards but had not reconciled those estimates to the actual work performed on each federal program as required per 2 CFR § 200.430. Cause: Technical issue with the State’s recently adopted time and attendance system: the system will not allow OSDE to accurately charge fringe benefits for employees who are paid from both State and Federal sources and OSDE has not implemented an alternative process to accurately allocate payroll costs to federal awards. In addition, OSDE’s failure to provide requested time and effort data was impacted by significant staff turnover and inadequate record retention processes. Effect: Payroll costs charged to Federal programs may be incorrect or unallowable. Recommendation: We recommend that OSDE develop policies and procedures for ensuring personnel costs that are charged to Federal awards comply with the time and effort requirements per 2 CFR § 200.430. We recommend OSDE develop policies and procedures for ensuring all records are appropriately retained, especially when staff turnover is high. In addition, we recommend OSDE develop policies and procedures to provide adequate training for staff members regarding federal requirements for recording time and effort data and appropriately allocating salaries and wages to federal awards. Views of Responsible Official(s) Contact Person: Tammy Smith, Senior Director of Federal Programs | Office of Title Services Anticipated Completion Date: January 2024 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report. Contact Person: Sherri Coats, Director of Special Education Service | Office of Special Education Services Anticipated Completion Date: June 30, 2025 Corrective Action Planned: The Oklahoma State Department of Education agrees with the finding. See corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
FINDING NO: 2023-213 STATE AGENCY: Oklahoma Department of Education FEDERAL AGENCY: United States Department of Health and Human Services ALN: 93.323 FEDERAL PROGRAM NAME: Epidemiology and Laboratory Capacity for Infectious Diseases, passed through the Oklahoma State Department of Health FEDERAL AWARD NUMBER: NU50CK000535 FEDERAL AWARD YEAR: 2023 CONTROL CATEGORY: Subrecipient Monitoring QUESTIONED COSTS: Unknown Criteria: 2 CFR § 200.430(g)(1) Compensation – personal services 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the recipient or subrecipients; (iii) encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary record as defined in the recipient or subrecipient’s written policy; (iv) 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.” Condition and Context: The Oklahoma State Department of Education (“OSDE”) reimbursed subrecipient Local Education Agencies (“LEA”) for payroll related costs without obtaining certified time and effort or adequate supporting details of time and attendance for hours worked in payroll related reimbursement requests. Additionally, budgets based on pre-determined percentages cannot be relied upon without actual validation. As such, 15 of 60 (25%) subrecipient reimbursement contained payments made to LEAs for payroll related costs, without evidence of adequate time and effort records. Cause and Effect: Due to a lack of detailed payroll records, OSDE reimbursed LEAs for costs which may not have been actual time worked against Assistance Listing Number (AL#) 93.323. As a result, the grant could have been overcharged based on budgeted position setup rather than true time and effort spent towards the grant. Recommendation: We recommend OSDE requires LEAs to provide evidence of certified time and effort and accurate time tracking of hours spent prior to approving subrecipient claims for reimbursement. Views of Responsible Official(s) Contact Person: Kellie Carter, Program Manager, School Health Services Anticipated Completion Date: 6/30/2025 Corrective Action Planned: The Oklahoma Department of Education agrees with the finding. Please see the corrective action plan located in the corrective action plan section of this report.
ALLOWABLE COSTS/COST PRINCIPLES - PAYROLL ALLOCATIONS Finding Type: Significant Deficiency in Internal Controls over Compliance, Noncompliance ALN/CSFA and Program Title: 93.658 – Foster Care - Title IV-E, 93.676, Unaccompanied Alien Children Program, 60.074 – Out-of-Home Supports Federal/State Agency: U.S. Department of Health and Human Services, Florida Department of Children and Families Pass-Through Entity: Big Bend Community Based Care, Inc. dba NWF Health Network; Brevard Family Partnership; Children’s Network of Hillsborough; Children’s Network of Southwest Florida Social Services; Communities Connected for Kids; Community Partnership for Children; Embrace Families, Inc.; Families First Network, Inc.; Family Support Services of North Florida, Inc.; Family Support Services of Suncoast; Heartland for Children; Kids Central, Inc.; Partnership for Strong Families; Safe Children Coalition, Inc., Liberty Wilderness Crossroads Camp Contract Number: 0299-22, C0900, PCM776, N/A (Emergency Shelter), 90ZU0362 (direct), 90ZU0501 Criteria: Under 2 CFR 200.430(g) of the Uniform Guidance, "Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed", and "Budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to federal awards...". Per the Reference Guide for State Expenditures of the Florida Department of Financial Services, "Timesheets that support the hours worked on the project or activity must be kept." Additionally, 2 CFR 200.303(a) of the Uniform Guidance requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and Section 215.97(10), Florida Statutes, requires nonstate entities to have internal controls in place to provide reasonable assurance of compliance with the provisions of laws, regulations, and other rules, pertaining to state awards that have a material effect on each major state project. Condition: Time and pay for certain employees who perform work for multiple programs is allocated among these programs. The allocations are based on program budgets or other budgeted expectations of the employees’ activity. The Organization's internal control structure does not address adjusting these allocations to reflect actual time and effort expended. Cause: These employees do not record their time to each program, and management was unaware of federal and state requirements for the allocations. Effect: Time and pay being allocated charged to the programs may not accurately reflect their actual time spent on each program. Questioned Costs: None Recommendation: We recommend all employees record their time to each program that they work on, or that time studies be completed at least annually by the employees whose time needs to be allocated and those time studies be used to determine how the employes’ time and pay should be allocated. Views of Responsible Officials and Planned Corrective Actions: See management’s response and Corrective Action Plan on page 57.
Agency: U.S. Department of Health and Human Services Federal Assistance Listing Number: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Criteria: In accordance with 2 CFR §200.430(i) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), compensation for personal services charged to federal awards must be based on records that accurately reflect the work performed. When budget estimates are used for interim accounting purposes, they must: produce reasonable approximations of the activity actually performed, be reconciled to actual effort on a regular basis, and be adjusted in a timely manner to reflect significant changes in work activity. Documentation may include timesheets, effort certifications, payroll distribution reports, and other personnel activity records, and must be reviewed and approved by authorized personnel. Condition and Context: The Organization did not maintain documentation evidencing a hindsight review of employee working hours to verify alignment between actual hours worked and budgeted hours. This oversight was noted in instances where payroll costs for individual employees were allocated across multiple federal programs. While a time and effort certification was lacking for the items included in our sample, there was evidence of work performed on the grants and the amounts allocated aligned closely to the budget. Questioned Costs: We were unable to quantify an amount of questioned costs. While a time and effort certification was lacking for the items included in our sample, there was evidence of work performed on the grants and the amounts allocated aligned closely to the budget. Therefore, we were unable to quantify the amount of questioned costs. Cause: The Organization has not established or enforced formal policies and procedures requiring the documentation of time and effort for employees. Effect: The lack of documentation of hindsight review increases the risk of inaccurate payroll cost allocations and potential noncompliance with federal grant requirements. Recommendation: The Organization should update its policies and procedures to require and document a formal hindsight review of employee working hours. This review should verify that actual hours worked align with budgeted hours, particularly in cases where payroll costs are allocated across multiple federal programs. The updated procedures should include clear guidelines for conducting and retaining evidence of such reviews to support accurate cost allocations and ensure compliance with federal grant requirements.
2023-002 Allocation of Program Effort by Employees – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Program: Research and Development Cluster (ALN 47.049-Mathematical and Physical Sciences, Award 2043575, Award Period 3/15/21 – 2/28/23) Federal Agency: National Science Foundation Criteria: The financial management requirements include processes and controls over the allocation of personnel time and effort to program activities as required by 2 CFR 200.430. Condition: Our testing of payroll expenses charged to the program noted that the Organization allocates senior personnel time and effort in one journal entry as a program expense. Cause: The Organization did not adhere to documented policies for allocating senior personnel effort and time costs to program accounting records. Effect: The Organization does not maintain a compliant effort system and is not in compliance with 2 CFR 200.430 which could lead to inaccurate allocation of personnel costs to the federal program. Identification as a repeat finding, if applicable: The finding is a repeat of Finding 2022-004 in the prior year. Recommendation: We recommend the Organization communicate and enforce policies for allocating senior personnel effort and time costs to grant and accounting personnel and implement formal processes to monitor compliance with federal awards. View of Responsible Officials: The Organization has since improved its procedures for allocating senior personnel time and effort in its accounting and financial record keeping processes. Time and effort are now allocated via approved time and expense personnel reports and the charges are reconciled to the accounting records and there is a formal process to monitor compliance with this requirement. Questioned Costs: None
U.S. Department of Health and Human Services Leading Edge Acceleration Projects (LEAP) in Health Information Technology - 93.345 Award# 90AX0034/01-00 Criteria or Specific Requirement – Allowable Costs/Cost Principles/Cash Management Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). Additionally, costs may not be included as a cost of any other federally-financed program in either the current or a prior period (2 CFR 200.403(f)). Non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)).issuance or redemption of checks, warrants, or payment by other means (2 CFR Section 200.305(b)). Condition – During our test work over the LEAP grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations to support its compensation and fringe benefit expenses. Additionally, it appeared a substantial portion of certain employee's time was 100% charged to the LEAP award; however, may have also been included on other federal awards and been reimbursed. Lastly, indirect costs were charged to the federal program on the salary expenses which were not fully supported as required by the Uniform Guidance. Cause – There is a lack of understanding of the requirements of the time and activity reports and a lack of detail tracking by project of personnel time. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2023. This resulted in the Organization drawing down funds for unsupported expenses. Questioned Costs – Total questioned costs are $278,735. This includes $192,231 of all salaries and benefits charged to the award which lacked documentation to support the charge and allocation to the grant and $86,504 in indirect costs charged on these related expenses. Context - There was a total of $192,231 in salaries and fringe benefits charged to the LEAP award during the year ended June 30, 2023 which encompassed six employees. One hundred percent of the employees were reviewed and none had proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Additionally, it is uncertain how much of these employees' were also charged to other federally financed programs during the year. Identification as a Repeat Finding, if applicable – Not applicable Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with finding. See corrective action plan.
Federal Program: Head Start Cluster (CFDA #93.600) Federal Agency: U.S. Department of Health and Human Services Federal Award Number(s): 08CH012021-02-01 Compliance Requirement: Allowable Costs/Costs Principles Questioned Costs: $281 Condition – During testing of payroll expenditures charged to the Head Start program multiple deficiencies in payroll processing and documentation were identified including hours did not agree to approved timecards, incorrect pay rates, supporting documentation was missing or incomplete, retirement and/or FICA contributions were calculated incorrectly, and allocation percentages did not agree with approved allocations. Criteria – Under 2 CFR 200.430(i) charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed supported by documentation that is accurate, reflects actual hours worked, supported by the entity’s internal controls, and consistent with the entity’s established policies. Cause - Internal controls over payroll processing and documentation were not consistently followed or adequately monitored. There was insufficient review of payroll inputs, allocation percentages, and benefit calculations prior to posting payroll costs to the Head Start program. Additionally, staff responsible for payroll processing did not consistently retain or verify supporting documentation. Effect – Payroll costs charged to the Head Start program may be inaccurate or unallowable. Recommendation - We recommend that the government strengthen its internal controls related to payroll processing and documentation for federal program expenditures and ensure staff is knowledgeable regarding Uniform Guidance documentation requirements. Client Response – Management acknowledges this finding. With the changes in staffing at the time, there was not proper training for each employee. We no longer service this program. In the future if we take a grant of this size on, training will be held for any employees involved with the grant. Status of Finding – This is not a repeat finding from the prior year.
Finding 2023-006 – Activities Allowed or Unallowed/Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Head Start ALN# 93.600 (Repeat 2022-008) U.S. Department of Health & Human Services Federal Grant/Contract Number: 10CH011215-03-03; 10CH011215-03-C3; 10CH011215-04; 10HE000901-01-C6 Grant period – 2022 & 2023 Criteria – Per 2 CFR 200.303, 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 follow guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.403 – Factors affecting allowability of costs – Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: paragraph (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles; paragraph (g) Be adequately documented. Per 2 CFR section 200.404 – Reasonable costs – A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the decision was made to incur the cost. Per 2 CFR section 200.405 – Allocable costs –focuses on how costs are allocable, ensuring they are directly tied to the federal award or its benefits. Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and that are incorporated into the official records of the non-Federal entity. Condition – From the population of all disbursements charged to the grant, we selected 25 program disbursements, of which 9 invoices could not be located. Cause – Turnover in staff and the passage of time since the period under audit has caused documentation to be misplaced. Effect – Inadequate or inconsistent documentation of expenses may result in erroneous or fraudulent transactions occurring, loss of funding, or disallowed costs. Questioned Costs – Known questioned costs totaling $121 were identified related to 10 invoices could not be located. In addition, likely questioned costs are estimated at $34,616, based on the projection of the error identified in the tested transactions to the applicable population. Recommendation – Documentation should be prepared, reviewed, and retained to support the expense. Management’s Response – Management has reviewed and accepted the finding. See “Corrective Action Plan”.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster, Temporary Assistance for Needy Families Federal Assistance Listing Number: 93.224, 93.527, 93.558 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance testing, we noted that the time and effort attestations for all employees were not completed at all during fiscal year 2023. Salaries and related costs were charged to the grants based on budgeted estimates. Cause: Procedures and controls were not put in place to ensure actual time spent was properly charged to the programs. Effect or Potential Effect: The deficiency in the Center's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant. Questioned Costs: None Identification as a Repeat Finding Yes - See 2022-003 Auditor's Recommendation: The Center should ensure that the time and effort attestations are signed by both employee and supervisor timely. Views of Responsible Officials: The Center will review its Time and Effort policy to ensure continued compliance with federal regulations in maintaining records of personnel time and effort to substantiate salary costs associated with its federal grants. We will add steps to our process to ensure that the certifications by employees whose time is allocated to one federally funded program will sign an after-the-fact certification on a semi-annual basis confirming that the employee worked on a single award for the given period. The transition from ADP (our past payroll processor) to Paycom (our new payroll processor) will provide additional levels of timekeeping detail that will enable time and effort to be more closely monitored and reported.
Condition: We identified salary expenses for one employee applied to one housing grant tested that were not authorized in the grant budget. Criteria: As required by 2 CFR section 200.430, the Center must meet the following mandatory standards: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: The Center retained a third-party accounting firm to perform accounting functions in 2022, due to staff turnover during the fiscal year. As a result, this salary was not correctly allocated to the proper grant. Effect: Claiming salaries that were not authorized in the grant budget may lead to costs that are disallowed under the grant agreement. Recommendation: We recommend that the Center implement a training program for personnel responsible for cost allocation, establish stronger internal controls to verify cost allocation accuracy, and conduct a comprehensive review to identify and correct any misallocations. Views of Responsible Officials and Planned Corrective Actions: The Center agrees that the salary expense for that one employee was not correctly allocated and has provided a corrective action plan. Prior to this finding, in April 2023, the Center had already implemented internal controls and processes regarding allocation of salaries to specific grants, which should prevent this this type of finding going forward.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Finding number: 2022-002 – Significant Deficiency in Internal Control over Compliance Assistance Listing Number – 93.323 Program Title – COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases Federal award identification number and year – PH-004537, PH-004631, and PH-004855; 2021 and 2022 Name of federal agency – U.S. Department of Health and Human Services Name of pass-through entity – County of Los Angeles Department of Public Health Repeat finding – Yes, of finding number 2021-002 Criteria – Under the Uniform Guidance, specifically 2 CFR 200.430, charges to federal awards for compensation must be supported by a system of internal controls which provides reasonable assurance that costs are allocated appropriately and accurately. Organizations are permitted to use budget estimates when the system for developing the estimates provide reasonable approximations of the allocable costs and the internal controls include an after-the-fact review of charges, with adjustments entered as necessary. Condition/context – There was no written documentation to support the review of payroll costs allocated to federal programs. We selected 25 employees out of 39 whose time and effort was charged to the program. Cause – The management team of the organization is relatively small and conducted its reviews in meetings, without utilizing a formal documentation process. Possible effect – Due to lack of controls, disallowed costs could be charged to the program and go undetected. Questioned cost – N/A Recommendation – Management should review the requirements of CFR 200.430 and implement a system that efficiently and effectively allows for allocation and documentation of compensation costs. The system could be transaction-based (i.e., a change in software that allows for approval of allocations each pay period) or estimate and review based (subsequent modification based on review of budgeted estimates). Views of responsible officials – Agree with the finding. While allocations and allocation methodologies were reviewed by executive and senior management of Rising Communities, these reviews were not adequately documented. Rising Communities has/will take steps to address this finding. First, Rising Communities’ new financial system requires that all journal entries, including journal entries for the recording and allocation of payroll, be approved by a manager. This control has been in place since the beginning of the third quarter of 2022. Second, Rising Communities will implement a process where the appropriate member of the executive management team reviews allocation methodologies and specific allocation percentages for staff. When a change to either the methodology or percentages need to be made, the appropriate executive management team member will approve before implementation. Third, Rising Communities will utilize systems to back test allocation methodologies and allocation percentages. Rising Communities has recently implemented a new payroll system that will allow the tracking of employee time by program. Rising Communities is developing a plan and process to roll this functionality out to all employees during the first quarter of 2023. Rising Communities also utilizes a project management system which executive management reviews on a continual basis, providing them with qualitative information on where Rising Communities resources are being allocated. Finally, Rising Communities, with its new financial system, is implementing reporting to program managers that will allow them to have significantly greater insight into the spending on their respective programs.
Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Federal Award Identification Number and Year: 03-22-001-0001-0001 - 2022 Pass-Through Agency: Thurston County Pass-Through Number: None Award Period: March 1, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control and Compliance over Major Programs Criteria or Specific Requirement: Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR § 200.430(i)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Internal controls and adherence to compliance did not detect an error in payroll expenditures to the Coronavirus State and Local Recovery Funds program. Questioned costs: Total questioned cost of $69 based on 2.75 hours of sick time incorrectly charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027), contract number 03-22-001-0001-0001. Context: During our testing of payroll, 1 out of the 40 paychecks had hours charged to the Coronavirus State and Local Recovery Funds program. Cause: The error related to charging sick time to the grant rather than to administrative expenses. The error was not detected until the audit. Effect: Lack of review and reconciliation of time and effort could lead to inappropriate charges to Federal programs. Recommendation: CLA recommends increased payroll training and reconciliation. View of Responsible Official: There is no disagreement with the audit finding. Management’s response and corrective action plan is attached to our report.
Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Federal Award Identification Number and Year: 03-22-001-0001-0001 - 2022 Pass-Through Agency: Thurston County Pass-Through Number: None Award Period: March 1, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control and Compliance over Major Programs Criteria or Specific Requirement: Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR § 200.430(i)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program. Questioned costs: Total questioned cost of $2,983 based on two payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027), contract number 03-22-001-0001-0001. Context: During our payroll testing, of the two Executive Director timesheets tested, both didn't show a secondary control offsetting the program manager and for one item, there was no proof of approval at all. Cause: The error was caused by not applying an adequate amount of controls necessary for an executive director's time. For the lack of evidence of review, this likely was caused by an oversight (timesheet shows evidence of review, just no initials). Effect: The Coronavirus State and Local Recovery Funds program and other Federal programs could be incorrectly charged. Recommendation: CLA recommends that the program manager and a member of the finance committee knowledgeable about 2 CFR § 200.430(i)(1) review the executive director costs charged to the Coronavirus State and Local Recovery Funds program. View of Responsible Official: There is no disagreement with the audit finding. Management’s response and corrective action plan is attached to our report.
Finding 2022-004: Salaries and Wages (Allowable Costs) Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: i. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ii. Be incorporated into the official records of the non-Federal entity; iii. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; v. Comply with the established accounting policies and practices of the non-Federal entity; vi. [Reserved] vii. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition: During our testwork, we determined that SAMU did not adequately document employee time spent on the Federal program versus other programs. In addition, we noted one instance in which an employee offer letter was not available for examination. Cause: SAMU does not require that all employees complete timesheets documenting time spent on the Federal award versus other awards. Additionally, SAMU does not have effective internal controls in place to ensure that employee salary documentation is retained. Effect or Potential Effect: SAMU could inadvertently charge time to the Federal award that was not truly spent working on the Federal award. This could result in the Federal Government over-paying for salaries associated with the award. Questioned Costs: Indeterminable. Context: We noted that employees selected for testing did not have completed, detailed timesheets to indicate time spent on the Federal award versus other programs. We also noted instances in which an employee offer letter and employee transition letter were not available for examination. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that SAMU implement formal time tracking policies to require all employees to complete a detailed timesheet in order to track actual time spent on various programs. All timesheets should have evidence of both employee and supervisory approval. Additionally, we recommend that SAMU ensure all salary records for employees are retained.
2022-002—ALLOWABLE COSTS AND ACTIVITIES Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Opportunities For Persons With Aids Assistance Listing Number: 14.241 Federal Award Identification Number and Year: NMH200032-2020 and NMH2001W068- 2020 Award Period: 6/9/2020 – 06/9/2023 for Grant68 and 05/20/2021 – 05/20/2024 for Grant32 Questioned Costs: $453,784.05 Type of Finding • (D) Material Weakness in Internal Control Over Compliance of Federal Awards • (F) Instances of Noncompliance related to Federal Awards Statement of Condition During our testing of allowable activities and costs, we noted a lack of evidence of internal controls over compliance and lack of evidence of compliance for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. Context Internal Control over Compliance 40 transactions out of 40 tested did not have evidence of approval of review of budget to actual, review of allowable activities and allowable costs. The dollar amount of the exceptions were $469,439.37. Compliance 21 transactions out of 40 tested did not have evidence of supporting documentation necessary to determine if the transaction was in compliance with grant requirement. The dollar amount of the exceptions were $453,784.05. Criteria As set forth in 2 CFR part 200 internal controls should be put in place to ensure costs and activities allowable under a Federal award are made in accordance with the government-wide cost principles in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards In addition, § 200.430 Compensation—personal services. (I) Standards for Documentation of Personnel Expenses: charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Examples of illustrative control activities can be found in OMB Compliance Supplement, part 6—Internal Control, Appendix 2. Some examples of control activities as follows: • Supervisors review and approve invoices, cost allocations, efforts of personnel, fringe benefits and indirect charges for allowability, adherence to cost principles, accuracy, and completeness. • Grant supervisor reviews the budget vs. actual report investigating unusual or unexpected variances and documents results of follow-up work performed. • Journal entries to transfer costs from one project to another are reviewed for appropriateness and approved. Effect The organization does not appear to have sufficient internal controls in place and does not appear to be in compliance with grant requirements as set forth in 2 CFR part 200. The lack of compliance has resulted in a disclaimer of opinion for allowable costs for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. A potential effect of noncompliance of the federal award or future funding decisions could result in disallowance of costs, suspension or termination of the award, or reduction of future allocations. Cause Internal controls over compliance do not appear to have been adequately implemented due to lack of training, oversight, or resources. Recommendation We recommend the organization prevent recurrence of noncompliance by developing and implementing written policies and procedures, conducting regular reviews and reconciliations, provide training and guidance to staff and monitoring compliance View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
2022-002—ALLOWABLE COSTS AND ACTIVITIES Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name: Housing Opportunities For Persons With Aids Assistance Listing Number: 14.241 Federal Award Identification Number and Year: NMH200032-2020 and NMH2001W068- 2020 Award Period: 6/9/2020 – 06/9/2023 for Grant68 and 05/20/2021 – 05/20/2024 for Grant32 Questioned Costs: $453,784.05 Type of Finding • (D) Material Weakness in Internal Control Over Compliance of Federal Awards • (F) Instances of Noncompliance related to Federal Awards Statement of Condition During our testing of allowable activities and costs, we noted a lack of evidence of internal controls over compliance and lack of evidence of compliance for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. Context Internal Control over Compliance 40 transactions out of 40 tested did not have evidence of approval of review of budget to actual, review of allowable activities and allowable costs. The dollar amount of the exceptions were $469,439.37. Compliance 21 transactions out of 40 tested did not have evidence of supporting documentation necessary to determine if the transaction was in compliance with grant requirement. The dollar amount of the exceptions were $453,784.05. Criteria As set forth in 2 CFR part 200 internal controls should be put in place to ensure costs and activities allowable under a Federal award are made in accordance with the government-wide cost principles in the Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards In addition, § 200.430 Compensation—personal services. (I) Standards for Documentation of Personnel Expenses: charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Examples of illustrative control activities can be found in OMB Compliance Supplement, part 6—Internal Control, Appendix 2. Some examples of control activities as follows: • Supervisors review and approve invoices, cost allocations, efforts of personnel, fringe benefits and indirect charges for allowability, adherence to cost principles, accuracy, and completeness. • Grant supervisor reviews the budget vs. actual report investigating unusual or unexpected variances and documents results of follow-up work performed. • Journal entries to transfer costs from one project to another are reviewed for appropriateness and approved. Effect The organization does not appear to have sufficient internal controls in place and does not appear to be in compliance with grant requirements as set forth in 2 CFR part 200. The lack of compliance has resulted in a disclaimer of opinion for allowable costs for the Housing Opportunities For Persons With Aids grants NMH200032 and NMH2001W068. A potential effect of noncompliance of the federal award or future funding decisions could result in disallowance of costs, suspension or termination of the award, or reduction of future allocations. Cause Internal controls over compliance do not appear to have been adequately implemented due to lack of training, oversight, or resources. Recommendation We recommend the organization prevent recurrence of noncompliance by developing and implementing written policies and procedures, conducting regular reviews and reconciliations, provide training and guidance to staff and monitoring compliance View of Responsible Officials and Corrective Action Plan Response. Agreed. Where feasible, the Housing Trust will aim to improve management of all federal grants. A process of documentation verification prior to any requests made for financial draws will include employee, supervisor, business operations manager, and executive director level approvals to ensure compliance and availability of funds. A monthly federal request for reimbursements with all grantee information will be used and reconciled monthly with QuickBooks. This report will mirror the SEFA form so auditors will receive the information in a timely manner. For any quarterly reports, the three months of reporting will again be reconciled prior to submission. All new processes and compliance will be updated in the policies and procedure manual. As the Executive Director prepares the 2024 budget, a reorganization of the business operations department will be sought. A new position to prepare and work on all federal grant tasks will be hired and report to the Business Operations Manager. In the meantime, the Business Operations Manager has started to develop checks and balances. Corrective Action Plan Timeline: Immediately Designation Of Employee Position Responsible For Meeting Deadline: Business Operations Manager
Item: 2022-002 Assistance Listing Number: 21.027 Programs: COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Agencies: Arizona State Office of the Governor; Maricopa County Pass-Through Grantor Identifying Number: Unknown Award Year: January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Item: 2022-003 Assistance Listing Number: 84.425U Programs: COVID-19 - American Rescue Plan – Elementary and Secondary School Emergency Relief (ARP ESSER) Federal Agency: U.S. Department of Education Pass-Through Agencies: Arizona Department of Education Pass-Through Grantor Identifying Number: Unknown Award Year: April 19, 2022 to September 30, 2024 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates. Condition: The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates. Questioned Costs: n/a Context: In a population of 182 payroll costs charged to the program, we conducted a non-statistical sample of 18 payroll costs charged to the program. In our sample of 18, we noted that all selections were charged to the program based on estimated allocations determined in advance based on job descriptions and duties. We noted that actual time incurred was not used to charge expenditures to the program. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates. Cause: Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review. Identification as a Repeat Finding: Not a repeat finding Recommendation: The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.
U.S. Department of Justice, passed through Missouri Department of Social Services Crime Victim Assistance - 16.575 Multiple Awards and Award Years Criteria or Specific Requirement – Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). The Crime Victim Assistance award document also requires "daily time and activity records for all staff funded by this grant project that document the services and grant projects that the staff person worked on and the time spent providing the services or programs." Condition – During our test work over the Crime Victim Assistance grant, we noted the Organization did not have time and activity records with sufficient detail per federal regulations and Crime Victim Assistance award document to support its compensation and fringe benefit expenses. Questioned Costs – Total questioned costs of $27,051 were identified as a result of lack of proper documentation to support the charge and allocation to the grant. Context – We selected a sample of 60 charges to the Crime Victim Assistance grants of which 59 were salaries and benefits expenditures with a value of $35,957. Within our sample, we noted 47 of the selections did not have proper documentation to support the charge and allocation to the grant (e.g ., daily time and activity records, etc.). These 47 selections had a value of $27,051. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $1,378,704 and represented 94% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Effect – Based on testing completed, the Organization did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2022. Cause – Management indicated that this was attributed to a misunderstanding of the requirements of the time and activity reports. This issue was brought to the attention of management in the third quarter of fiscal year 2022. Management implemented a time and activity tracking method that tracks employees' time and effort on a daily basis in the fourth quarter of fiscal year 2022. Identification as a Repeat Finding – Repeat finding, see 2021-004 and 2020-004. Recommendation – We recommend that management utilize a time and activity method which meets the requirements of federal regulations and Crime Victim Assistance award documents. We also recommend employees and their supervisors are provided training on the requirements. Views of Responsible Official and Planned Corrective Actions – Management agrees with the stated finding and has implemented a corrective action plan.