Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.
Federal Program Research and Development Cluster Pass-through Entities University of Delaware Federal Agency U.S. Department of Health and Human Services Federal Award Number and Award Year 93.732 2M01HP31317-05 9/1/21-6/30/22 93.859 59449 7/1/21-6/30/22 Criteria In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a) is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b) follows an appointment made in accordance with the non-federal entity?s rules or written policies and meets the requirements of federal statute, where applicable; and c) is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Per 2 CFR 200.303, a 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. Condition and Context We identified four of 60 payroll expenditure samples where the amount recorded and submitted as an allowable expenditure under the grant exceeded the amount that should have been recorded based on the records and inputs detailing the work performed by the employees on the related programs. The value of the errors was $5,783 and the value of the sample items tested was $66,269. Possible Cause and Effect As a result of the implementation of a new payroll system in 2022, payroll expenditures of employees working on these programs were allocated via a manual process to the applicable cost centers (activity codes) based on documented time and effort allocation rates. Allocation rates were updated throughout the year as employee effort changed via multiple forms of communication including the submission of support tickets and email follow ups. Due to the manual nature of this process, increased risk of differences between recorded allocations and actual work performed arose requiring subsequent adjustment. While the Foundation recorded correcting entries and cost transfers in some instances to subsequently update certain issues that arose, there is a missing control to ensure all such entries were made completely and accurately. The effect is that potentially unallowable costs are submitted to the granting agencies as certain corrections were not made accurately and completely. Questioned Costs Known questioned costs of $5,783. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding No Recommendations The Foundation should standardize, centralize, and potentially automate the process by which updates to effort allocation percentages of employees working on federally funded programs are communicated and recorded. Additionally, a periodic review of these rates by the employees to which they relate, or their direct supervisors, should be implemented to detect any issues or changes that need to be made. Lastly, a process to follow up on and review the completeness and accuracy of correcting entries and cost transfers to validate all required entries are recorded appropriately should be implemented. View of Responsible Official Management agrees with the noted finding.
Federal Program Research and Development Cluster Pass-through Entities University of Delaware Federal Agency U.S. Department of Health and Human Services Federal Award Number and Award Year 93.732 2M01HP31317-05 9/1/21-6/30/22 93.859 59449 7/1/21-6/30/22 Criteria In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a) is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b) follows an appointment made in accordance with the non-federal entity?s rules or written policies and meets the requirements of federal statute, where applicable; and c) is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Per 2 CFR 200.303, a 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. Condition and Context We identified four of 60 payroll expenditure samples where the amount recorded and submitted as an allowable expenditure under the grant exceeded the amount that should have been recorded based on the records and inputs detailing the work performed by the employees on the related programs. The value of the errors was $5,783 and the value of the sample items tested was $66,269. Possible Cause and Effect As a result of the implementation of a new payroll system in 2022, payroll expenditures of employees working on these programs were allocated via a manual process to the applicable cost centers (activity codes) based on documented time and effort allocation rates. Allocation rates were updated throughout the year as employee effort changed via multiple forms of communication including the submission of support tickets and email follow ups. Due to the manual nature of this process, increased risk of differences between recorded allocations and actual work performed arose requiring subsequent adjustment. While the Foundation recorded correcting entries and cost transfers in some instances to subsequently update certain issues that arose, there is a missing control to ensure all such entries were made completely and accurately. The effect is that potentially unallowable costs are submitted to the granting agencies as certain corrections were not made accurately and completely. Questioned Costs Known questioned costs of $5,783. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding No Recommendations The Foundation should standardize, centralize, and potentially automate the process by which updates to effort allocation percentages of employees working on federally funded programs are communicated and recorded. Additionally, a periodic review of these rates by the employees to which they relate, or their direct supervisors, should be implemented to detect any issues or changes that need to be made. Lastly, a process to follow up on and review the completeness and accuracy of correcting entries and cost transfers to validate all required entries are recorded appropriately should be implemented. View of Responsible Official Management agrees with the noted finding.
Department of Health and Human Services Federal Financial Assistance Listing 93.958, All Awards Block Grants for Community Mental Health Services Activities Allowable or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Material Weakness in Internal Control over Compliance and Other Noncompliance Criteria: CFR 200.430 set forth the compensation for personal services standards non-federal entities other than states must follow when operating federal programs. Condition: Washburn Center has an internal control process designed to approve and calculate the payroll expenses and allocation of time to the program, but they did not maintain support for a true up of actual time spent on the program compared to the budget. Cause: The controls in place did not operate as designed and failed to detect that support was not maintained to support actual time spent working on the program versus the budget amount. Effect: Nine employees? wages did not include support for actual time spent working on the program. Questioned Costs: No questioned costs over $25,000. Context: Nine employees, accounting for $199,840, were selected for testing for the program from a total of 28 total employees that accounted for $736,089. Repeat Finding from Prior Years: No Recommendation: We recommend the procedures related to payroll expenses be reviewed with applicable program employees to ensure the control process is properly followed and documentation is retained to support compliance with program requirements. Views of Responsible Officials: Management agrees with the finding.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-006 Repeat Finding: Yes Type of Finding: Significant Deficiency in Internal Control and Nonmaterial Noncompliance Description: Payroll Expenditures Major Programs: AL#93.243 - Substance Abuse and Mental Health Services ? Direct Award (DHHS) ? Award numbers: 1H79SM087536-01, 1H79M087590-01, 5H79SP081724-03, 5H79SP081724-04, 5IH79SM082160-03, 5IH79SM082160-04, 6H79SP082229-01M001, 6H79SP082229-01M002, 5H79SM080189-03 AL#93.665 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ? Direct Award (DHHS) ? Award numbers: 6H79FG000252-01M003 and 6H79FG000689-01M004 AL#93.738 ? PPHF: Racial and Ethnic Approaches to Community Health Program financed solely by Public Prevention and Health Funds ? Direct Award (DHHS) ? Award numbers: 5NU58DP006960-02-00 and 6NU58DP006960-01-01 AL#93.772 - Tribal Public Health Capacity Building and Quality Improvement Umbrella Cooperative Agreement ? Direct Award (DHHS) ? Award numbers: 5NU38OT000257-04-00 and 5NU38OT000257-05-00 AL#93.933 ? Demonstration Projects for Indian Health ? Direct Award (DHHS) ? Award numbers: H1H5IHS001-01-01 and H1H5IHS001-02-00 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of the sample tested, there were numerous payroll transactions where the number of hours on the timesheet for the program, was not the amount that was allocated to the grant in the general ledger. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Cause: The Organization does not have the proper review process in place to ensure salaries and wages allocated to grants agree to employee timesheets. Effect: Without proper reconciliation between the number of hours coded to grants on the timesheets to the allocation to the grants in the general ledger, it is possible that grants could be over or undercharged. Recommendation: We recommend that a comparison of time charged to grants on the timesheet to the amount charged to the grants in the general ledger be performed prior to payroll being processed to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
Finding No. 2022-002 ? Allocation of Payroll Costs to Government Grant Programs Federal Agency: Department of Education Federal Program: 84.235F Rehabilitation Services Demonstration and Training Program Type of Finding: Material Weakness in Internal Control over Compliance Material Weakness in Internal Control over Financial Reporting Finding: Internal control processes over compliance did not ensure all payroll and labor costs were allocated in a consistent manner to grant programs. Criteria: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: The Organization paid bonuses to employees and allocated those costs to the federal and other government grant programs based upon criteria other than time and effort for actual work performed. These costs were allocated without obtaining a certification of the bonus allocation from staff members. Internal controls were not properly designed to allocate one-time payroll costs in accordance with the requirements of the Uniform Guidance. Sample Size and Population: Sampling was not applicable to this finding. Cause: The Organization?s internal controls over bi-monthly payroll allocation were not applied to bonus allocations. Effect: Payroll cost allocations not based on actual time and effort expended can result in unallowable costs charged to federal and other government grant programs. Questioned Costs: $5,000 Recommendation: Management and those charged with governance should consider increasing the controls around the allocation of payroll costs to ensure allocation is made based upon actual time and effort expended, and that a certification of time allocations is obtained from all employees in a timely and consistent manner, including one-time payroll bonuses and any time allocated to programs which is not eligible for reimbursement. Views of Management and Corrective Action Plan: Management?s response is reported in the ?Corrective Action Plan? at the end of this report. Contact Person: Ginger Kwan, Executive Director
Finding 2022-002 – Allowable Costs/Cost Principles U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children’s Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined. Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-002 – Allowable Costs/Cost Principles U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children’s Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined. Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-002 – Allowable Costs/Cost Principles U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children’s Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined. Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-002 – Allowable Costs/Cost Principles U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children’s Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined. Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
Finding 2022-002 – Allowable Costs/Cost Principles U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658) Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year. Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner. Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance. Effect: The County Children’s Services department may not be allocating payroll costs equitably. Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined. Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs. Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.
Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: H79TI081935 – 2022, H79TI080298 – 2022, H79TI085517 – 2022 Pass-Through Agency: Pierce County Pass-Through Number(s): SC-107323, SC-105454, SC-110121 Award Period: May 31, 2019 through May 30, 2024, September 30, 2017 through September 29, 2022, September 30, 2022 through September 30, 2027 Criteria or specific requirement: 2 CFR 200.430(i)(1)(viii) states that “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim changes made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: Grant hours are not consistently tracked on the employee monthly timesheet. Wages charged to the program are based on budgeted estimates. Per 2 CFR 200.430(i)(1)(viii), this is not allowed without additional steps to ensure accuracy, allowability and proper allocation. Insufficient evidence was presented to support a reasonable reflection of employee federal and non-federal activity. The alliance does not have a written policy nor system of internal controls to review and true-up grant wages to actual. Questioned costs: $447,634 Context: A sample of 40 was made from a population of 504 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, all were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation - personal services of Uniform Guidance. Sampled wages totaled $137,021.54. Total salaries and wages totaled $971,744 of the $1,599,883 tracked to the major program. Extrapolating the error to the actual costs reported on the SEFA results in a likely questioned cost amount of $447,634. Cause: Management was aware that estimated budgeted costs alone are not sufficient to support personnel costs charged to Federal awards. Effect: Charging grant wages based on estimates rather than actual hours worked on the program may raise compliance concerns. Estimating grant wages without adequate support for time and effort documentation may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: We recommend that the Alliance incorporate a system of internal controls that clearly documents the time and effort that each individual employee spends on each grant per month. This can be done by adjusting the format of the monthly timesheet to include a column that specifies how many hours per day were spent on which federal and nonfederal activities. PCA can further enhance clarity, accountability, and transparency by moving from a "day" format to an "hour" format on their timesheets. Views of responsible officials: Management has provide a response to the finding in their Corrective Action Plan.
Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: H79TI081935 – 2022, H79TI080298 – 2022, H79TI085517 – 2022 Pass-Through Agency: Pierce County Pass-Through Number(s): SC-107323, SC-105454, SC-110121 Award Period: May 31, 2019 through May 30, 2024, September 30, 2017 through September 29, 2022, September 30, 2022 through September 30, 2027 Criteria or specific requirement: 2 CFR 200.430(i)(1)(viii) states that “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim changes made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: Grant hours are not consistently tracked on the employee monthly timesheet. Wages charged to the program are based on budgeted estimates. Per 2 CFR 200.430(i)(1)(viii), this is not allowed without additional steps to ensure accuracy, allowability and proper allocation. Insufficient evidence was presented to support a reasonable reflection of employee federal and non-federal activity. The alliance does not have a written policy nor system of internal controls to review and true-up grant wages to actual. Questioned costs: $447,634 Context: A sample of 40 was made from a population of 504 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, all were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation - personal services of Uniform Guidance. Sampled wages totaled $137,021.54. Total salaries and wages totaled $971,744 of the $1,599,883 tracked to the major program. Extrapolating the error to the actual costs reported on the SEFA results in a likely questioned cost amount of $447,634. Cause: Management was aware that estimated budgeted costs alone are not sufficient to support personnel costs charged to Federal awards. Effect: Charging grant wages based on estimates rather than actual hours worked on the program may raise compliance concerns. Estimating grant wages without adequate support for time and effort documentation may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: We recommend that the Alliance incorporate a system of internal controls that clearly documents the time and effort that each individual employee spends on each grant per month. This can be done by adjusting the format of the monthly timesheet to include a column that specifies how many hours per day were spent on which federal and nonfederal activities. PCA can further enhance clarity, accountability, and transparency by moving from a "day" format to an "hour" format on their timesheets. Views of responsible officials: Management has provide a response to the finding in their Corrective Action Plan.
Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Substance Abuse and Mental Health Services Projects of Regional and National Significance Assistance Listing Number: 93.243 Federal Award Identification Number and Year: H79TI081935 – 2022, H79TI080298 – 2022, H79TI085517 – 2022 Pass-Through Agency: Pierce County Pass-Through Number(s): SC-107323, SC-105454, SC-110121 Award Period: May 31, 2019 through May 30, 2024, September 30, 2017 through September 29, 2022, September 30, 2022 through September 30, 2027 Criteria or specific requirement: 2 CFR 200.430(i)(1)(viii) states that “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim changes made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: Grant hours are not consistently tracked on the employee monthly timesheet. Wages charged to the program are based on budgeted estimates. Per 2 CFR 200.430(i)(1)(viii), this is not allowed without additional steps to ensure accuracy, allowability and proper allocation. Insufficient evidence was presented to support a reasonable reflection of employee federal and non-federal activity. The alliance does not have a written policy nor system of internal controls to review and true-up grant wages to actual. Questioned costs: $447,634 Context: A sample of 40 was made from a population of 504 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, all were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation - personal services of Uniform Guidance. Sampled wages totaled $137,021.54. Total salaries and wages totaled $971,744 of the $1,599,883 tracked to the major program. Extrapolating the error to the actual costs reported on the SEFA results in a likely questioned cost amount of $447,634. Cause: Management was aware that estimated budgeted costs alone are not sufficient to support personnel costs charged to Federal awards. Effect: Charging grant wages based on estimates rather than actual hours worked on the program may raise compliance concerns. Estimating grant wages without adequate support for time and effort documentation may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: No. Recommendation: We recommend that the Alliance incorporate a system of internal controls that clearly documents the time and effort that each individual employee spends on each grant per month. This can be done by adjusting the format of the monthly timesheet to include a column that specifies how many hours per day were spent on which federal and nonfederal activities. PCA can further enhance clarity, accountability, and transparency by moving from a "day" format to an "hour" format on their timesheets. Views of responsible officials: Management has provide a response to the finding in their Corrective Action Plan.
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: N/A Pass-Through Agency: State of Arizona, the Office of the Governor Pass-Through Number(s): GR-ARPA-AHCA-050122-01 Award Period: May 1, 2022 - June 30, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Condition/Context: Although management had processes and procedures in place to allocate budgeted employee time and costs to their grant award program, management either did not maintain or did not perform procedure to formally track employees' actual time and effort. Criteria or specific requirement: In accordance with the Compliance Supplement, Part 6 – Internal Control, 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. In accordance with 2 CFR 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. In accordance with 2 CFR 200.430 (g), for compensation to members of nonprofit organizations, trustees, directors, associates, officers, or the immediate families thereof, determination must be made that such compensation is reasonable for the actual personal services rendered rather than a distribution of earnings in excess of costs. This may include director's and executive committee member's fees, incentive awards, allowances for off-site pay, incentive pay, location allowances, hardship pay, and cost-of-living differentials. Questioned costs: None. Cause: The Organization did not have established internal controls and policies over the documentation of time and effort related to payroll disbursements. Because of the limited number of staff participating in the grant, management was aware that the actual time spent by employees met or exceeded the budgeted allocations. Effect: The Organization was not in compliance with the Compliance Supplement and the Code of Federal Regulations related to the documentation of time and effort provisions for payroll disbursements. Repeat Finding: No Recommendation: We recommend that the Association adopt a formal policy for tracking employee time and effort supporting grant expenses. Additionally, management should summarize the actual time employees spend on grant award programs and adjust the budgeted cost allocations to reflect the actual time spent. A second person knowledgeable of grant award requirements should review the time and effort summaries for proper completion and recording. This will help ensure that internal controls over compliance are established and will help ensure that cost charged to grant award programs are supported and allowable. Views of responsible officials: Management agrees with the audit condition.
(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges 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;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.
(2022-003) Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 21.027 Federal Program: Coronavirus State and Local Fiscal Recovery Funds Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $118,513 Condition The Center charged payroll expenses to the program based an allocation and did not adjust the charges to reconcile to actual time documents per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed…” Charges 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;…” And “budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Cause The Center's calculation of payroll charged to the grant is not reconciled to the actual hours reported by the employee on their individual timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation Questioned Costs There were questioned costs in the amount of $19,688 for the sample selected, which was extrapolated to $118,513 when the error rate was applied to the personnel costs not tested. Recommendation We recommend that the Center charge time to the program based on actual hours worked per the employees' timesheets. Management Response Personnel costs will be charged to the program based on actual time recorded in the organization’s case management software. Hours will be audited quarterly to ensure accuracy and completeness. The Center notes that the grantor, the State Bar of California, never requested the Center to charge payroll expenses to the program based on actual time documents, nor had they ever noted this discrepancy during their periodic audits of the program.
Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.
Finding 2022–002: Internal Controls over Allowable Costs Federal Department: U.S. Department of Treasury Pass-through Agencies: Cook County, Illinois and Women's Business Development Center COVID-19 - Coronavirus State and Local Fiscal Recovery Funds, Federal Assistance Listing Number 21.027 Criteria 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Subpart D – Post-Federal Award Requirements Standards for Financial and Program Management Section 200.303, Internal controls states “The non-Federal” entity must: (1) 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 terms and conditions of the Federal award. Section 200.430 (i) Standards for Documentation of Personnel Expenses states (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities…; (v) Comply with the established accounting policies and practices of the non-Federal entity. Condition During the current audit period, SDA did not maintain adequate controls over allowable costs related to its federally funded program. Cause Based on our discussions with management, this finding occurred due to staff turnovers. This resulted in consistent documentation not maintained to support the approval of invoices and related expenditures charged to the program. Effect The failure to maintain adequate documentation to verify that expenditures are properly reviewed and approved and to maintain adequate supporting documentation to ensure all payroll expenditures are reasonable and properly reviewed is a violation of federal regulations, which could result in unallowed costs being charged to the federally funded program. Questioned Costs We noted total questioned costs of $2,666. Context During our review of 45 expenditures (from a 326 population), we noted seven expenditures had no evidence of invoice approval prior to payment. From our review of these expenditures and related invoices, we did not note any costs that were deemed to be unallowed per the grantor(s) requirements and federal regulations. During our test of payroll, we noted two employees were charged to the grant with expenditures totaling $4,833. For one employee tested, we noted no evidence, such as time and effort reporting, to determine whether the employee worked on this grant and to support the amount of $2,666 charged to the program. Identification of Repeated Findings Repeated (Prior Finding No. 2021-002, 2020-002). Recommendation We recommend that SDA implement procedures to ensure all expenditures are properly reviewed and approved, and supporting documentation maintained in accordance with federal regulations. Views of Responsible Officials and Planned Corrective Action SDA agrees with the finding and recommendation. See SDA’s Corrective Action Plan on pages 40–44.
Item: 2022-003 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Arizona Department of Health Services Pass-Through Grantor Identifying Number: 252026/152034/152035 Award Year: January 1, 2022 to December 31, 2022; April 1, 2021 to July 15, 2022; August 1, 2022 to July 31, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – charges to federal programs for salaries and wages should be supported by a system of internal controls which provides reasonable assurance the amounts charged are accurate, allowable and properly allocated. Condition: The entity’s system of internal controls did not retain contemporaneous documentation of supervisory review over payroll allocations charged to the federal programs. 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 23 selections were charged to the program based on an allocation process. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the supervisory review of the allocations was inadequate. As such, this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Identification as a Repeat Finding: Repeat finding Recommendation: The Organization should enhance it processes and controls to ensure that supervisory review of the payroll allocations is evidenced within the Organization’s books and records. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
Item: 2022-004 Assistance Listing Number: 93.940 Programs: HIV Prevention Activities Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Arizona Department of Health Services Pass-Through Grantor Identifying Number: 252026/152034/152035 Award Year: January 1, 2022 to December 31, 2022; April 1, 2021 to July 15, 2022; August 1, 2022 to July 31, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: In accordance with 2 CFR § 200.430 – Compensation – charges to federal programs for salaries and wages should be supported by a system of internal controls which provides reasonable assurance the amounts charged are accurate, allowable and properly allocated. Condition: The entity’s system of internal controls did detect, or document the rationale for, instances in which the amounts charged to a federal program did not agree to the underlying supporting documentation maintained by the Organization. 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 2 selections were charged to the program for amounts that did not agree to the underlying supporting documentation maintained by the Organization. The variances between the amounts charged and the amounts supported, as well as the projected impact to the entire population, were trivial in nature. However, the deviation rate in the control objective resulted in the conclusion that this is deemed to be a material weakness in internal control over compliance. Effect: The system of internal controls was not properly implemented. Cause: Turnover within key positions of the organization resulted in insufficient documentation and/or inadequate implementation of the control procedures. Identification as a Repeat Finding: Not a repeat finding Recommendation: The Organization should enhance its processes and controls to ensure that differences between the amounts billed to federal awards and the underlying supporting documentation are thoroughly investigated. If the differences are justifiable, the justification should be documented and retained. If the differences are in error, the billing should be corrected prior to submission. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.
U. S. Department of Health and Human Services 2022-002 Allowable Costs Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must follow the costs principles set out at 2 CFR section 200.430 to substantiate compensation and other purchases charged to a federal program. “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: …(iii) reasonable reflect the total activity for which the employee is compensated by the non-Federal entity” 2 CFR section 200.430(i). The Organization’s processes did not maintain sufficient documentation of the approval of the activity of each employee or the purchase of goods/services for the programs identified above. Context and Condition - We selected 27 paychecks from three pay periods to test for compliance with standards in these two programs. Records for six of the paychecks tested lacked documentation of approval of the employee’s supervisor. We also selected 16 transactions for purchased goods and services to test compliance with standards in these two programs. Records for two transactions tested lacked documentation of approval by the program director. Cause - The Organization replaced its payroll processing servicer subsequent to 2022. Access to certain records from the prior servicer were no longer available. Personnel turnover resulting in inconsistencies in maintaining required documentation. Effect - A federal program could be charged compensation for employees who did not provide services directly attributable to the program or charged for goods/services not related to the program. Questioned Costs - No costs were questioned. Repeat finding - No Statistically valid - Yes Recommendation - We recommend the Organization ensure it 1) maintains records of each employee’s activity and 2) monitors compliance with the job-costing system implemented. Views of responsible officials - The Organization believes the paychecks and purchases identified were approved prior to payment. We will ensure that documentation is downloaded each pay period to ensure such documentation is not lost when a change in servicer is made.
U. S. Department of Health and Human Services 2022-002 Allowable Costs Program(s) Name of Federal Program (Assistance Listing Number) Urban Indian Health Services (93.193) Special Diabetes Program for Indians - Diabetes Prevention and Treatment Projects (93.237) Criteria - Recipients of federal awards must follow the costs principles set out at 2 CFR section 200.430 to substantiate compensation and other purchases charged to a federal program. “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: …(iii) reasonable reflect the total activity for which the employee is compensated by the non-Federal entity” 2 CFR section 200.430(i). The Organization’s processes did not maintain sufficient documentation of the approval of the activity of each employee or the purchase of goods/services for the programs identified above. Context and Condition - We selected 27 paychecks from three pay periods to test for compliance with standards in these two programs. Records for six of the paychecks tested lacked documentation of approval of the employee’s supervisor. We also selected 16 transactions for purchased goods and services to test compliance with standards in these two programs. Records for two transactions tested lacked documentation of approval by the program director. Cause - The Organization replaced its payroll processing servicer subsequent to 2022. Access to certain records from the prior servicer were no longer available. Personnel turnover resulting in inconsistencies in maintaining required documentation. Effect - A federal program could be charged compensation for employees who did not provide services directly attributable to the program or charged for goods/services not related to the program. Questioned Costs - No costs were questioned. Repeat finding - No Statistically valid - Yes Recommendation - We recommend the Organization ensure it 1) maintains records of each employee’s activity and 2) monitors compliance with the job-costing system implemented. Views of responsible officials - The Organization believes the paychecks and purchases identified were approved prior to payment. We will ensure that documentation is downloaded each pay period to ensure such documentation is not lost when a change in servicer is made.
Federal Program: Section 223 Demonstration Programs to Improve Community Mental Health Services Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Not Applicable Assistance Listing Number (ALN): 93.829 Federal Award Number: H79SM083269 Federal Award Year: December 31, 2022 Criteria: 2 CFR 200.430(i)(1)(i) & (vii) state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award, or a federal award and non-federal award Condition/Context: Six of the twenty-five personnel transactions that were tested did not have evidence of approval for the amount allocated to the federal program. The Organization experienced an unusually elevated level of turn-over of key personnel in business operations during the period of time that the control procedures lapsed as the individuals replacing those responsible for attaining allocation authorizations were not yet hired or fully trained in their assignments. The sample was not a statistically valid sample. Cause: The Organization's control process for monthly program allocation authorizations was not properly implemented during the months of May and June of 2022. Effect: Inadequate controls over the allocation of costs could result in unallowable costs being improperly applied to the federal program. Questioned Costs: None noted Recommendation: The Organization should have formal written procedure to ensure that all relevant authorization and reviews have been completed before allocating costs to federal programs. Views of responsible officials: Management agrees with the auditors' finding and will take action to implement controlling procedures over federal programs.
#2022-002 – Material Weakness – Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for 54 employee time periods, there were no timesheets to support the amount of time allocated to the Organization’s grant programs. Cause The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs. Effect The potential effects of not having supporting documentation for the allocation of payroll expenses is the overbilling of expenses to the grant program. Questioned Costs $397,499 Perspective Information We reviewed a sample of monthly reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding is related to multiple individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization’s grant programs. Identification as a repeat finding A similar issue was noted in prior year finding #2021-002. Recommendation We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported.
#2022-003 – Material Weakness – Activities Allowed or Unallowed Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with CFR 200.430, payroll costs charged to the program are allowable when: the total compensation paid to individual employees is reasonable according to the work performed on the program and the compensation is in accordance with the established policies of the organization. Condition During the audit we noted the Organization does not have established policies and procedures over payroll. We noted that while the Organization has established hourly and salary pay rates, these rates are not formally established and approved by the Organization’s Board. Cause The cause is a lack of a proper control structure that requires Board approval of pay rates and salaries. The Organization also does not have a process in place to ensure that payroll reports are properly reviewed and approved by a second independent reviewer prior to submission to the payroll company for processing. Effect The potential effects of not having formally approved pay rates and not having payroll reports reviewed by a second level prior to payroll processing is the potential for errors and overcharging of grants. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grants for a total of 284 samples. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2021-003. Recommendation We recommend that the Organization begin to formally establish and approve employee pay rates and salaries at Official Board Meetings and that these rates are documented in the Board Minutes. The Organization should also implement procedures to include a second level review of the payroll report for accuracy and completeness prior to submission for payment.
#2022-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2 CFR 200.303) Travel (2 CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2021-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.
#2022-002 – Material Weakness – Allowable Costs/Cost Principles Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for 54 employee time periods, there were no timesheets to support the amount of time allocated to the Organization’s grant programs. Cause The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs. Effect The potential effects of not having supporting documentation for the allocation of payroll expenses is the overbilling of expenses to the grant program. Questioned Costs $397,499 Perspective Information We reviewed a sample of monthly reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding is related to multiple individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization’s grant programs. Identification as a repeat finding A similar issue was noted in prior year finding #2021-002. Recommendation We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported.
#2022-003 – Material Weakness – Activities Allowed or Unallowed Opioid STR Grant ALN 93.788 Block Grants for Prevention and Treatment of Substance Abuse 93.959 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. In accordance with CFR 200.430, payroll costs charged to the program are allowable when: the total compensation paid to individual employees is reasonable according to the work performed on the program and the compensation is in accordance with the established policies of the organization. Condition During the audit we noted the Organization does not have established policies and procedures over payroll. We noted that while the Organization has established hourly and salary pay rates, these rates are not formally established and approved by the Organization’s Board. Cause The cause is a lack of a proper control structure that requires Board approval of pay rates and salaries. The Organization also does not have a process in place to ensure that payroll reports are properly reviewed and approved by a second independent reviewer prior to submission to the payroll company for processing. Effect The potential effects of not having formally approved pay rates and not having payroll reports reviewed by a second level prior to payroll processing is the potential for errors and overcharging of grants. Questioned Costs None Perspective Information We reviewed a sample of reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grants for a total of 284 samples. The finding represents the unsupported costs noted from this review. Identification as a repeat finding A similar issue was noted in prior year finding #2021-003. Recommendation We recommend that the Organization begin to formally establish and approve employee pay rates and salaries at Official Board Meetings and that these rates are documented in the Board Minutes. The Organization should also implement procedures to include a second level review of the payroll report for accuracy and completeness prior to submission for payment.
#2022-007 – Significant Deficiency – Special Tests Criteria Uniform Guidance (UG) requires non-Federal entities that receive grant funding to have written policies in the following areas: Internal Controls (2 CFR 200.303) Travel (2 CFR 200.474) Financial Management and Accounting which includes Cash Management and Allowability (2CFR 200.302) Personnel Compensation – Time and Effort Reporting (2CFR 200.430(i)) Conflict of Interest/Disclosures (2CFR 200.318) Procurement (2CFR 200.319) Condition During the audit we noted that the Organization does not have written policies in place over these areas in accordance with UG. Cause The Organization was not aware of the requirement to have these written policies in place. Effect The potential effect of not having these policies in place is that the Organization’s expenses are not in accordance with UG. Questioned Costs None Perspective Information No policies or procedures were noted that are in accordance with UG. As a response to the prior year finding, the Organization noted that they will add policies to the fiscal manual for future compliance. Identification as a repeat finding A similar issue was noted in prior year finding #2021-007. Recommendation We recommend that the Organization update the fiscal manual to include policies that are compliant with UG.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: Per 2 CFR §200.430, Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated.” Condition: For both programs, National CASA/GAL did not include the retention of reviewed payroll allocation workbooks (journal entry support) in its procedures. No transactions were selected for testing related to the review of these workbooks as the control was determined to not be functioning prior to testing. Additionally, we noted that National CASA/GAL allocated year-end payroll accrual expenditures to the Juvenile Mentoring Program based on budget allocation rates. There was no procedure in place to determine if a true-up was necessary from allocated costs. 37 transactions were tested, of which three were charged based on budgets and were not trued-up. Cause: National CASA/GAL did not have policies and procedures in place requiring the retention of the review and approval of timesheet allocations (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure allocations are adequately reviewed and approved, and document this review and approval, National CASA/GAL could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement National CASA/GAL is entitled to under the terms of the grant. Questioned Costs: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. There were 61 total timesheets tested for controls across both programs (51 within Court Appointed Special Advocates and ten within the Juvenile Mentoring Program). 97 total payroll transactions were tested across both programs (60 for Court Appointed Special Advocates and 37 for the Juvenile Mentoring Program) for compliance. Payroll costs for the Court Appointed Special Advocates in 2022 were $3,734,509. Payroll costs for the Juvenile Mentoring Program in 2022 were $160,643. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that National CASA/GAL consistently document the review and approval of the payroll allocations (journal entries), including any budget true-ups that are required for estimates at year end. Views of Responsible Officials: Management agrees with the finding that documentation of review and approval of journal entries was not retained and that a true-up of estimates was not specified in procedures. Management revised the control process in 2023 to include detailed review and approval of allocation workbooks within the general ledger. Management additionally has updated their policies and procedures to evaluate year-end payroll accruals and the considerations for any necessary true-ups.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: Per 2 CFR §200.430, Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated.” Condition: For both programs, National CASA/GAL did not include the retention of reviewed payroll allocation workbooks (journal entry support) in its procedures. No transactions were selected for testing related to the review of these workbooks as the control was determined to not be functioning prior to testing. Additionally, we noted that National CASA/GAL allocated year-end payroll accrual expenditures to the Juvenile Mentoring Program based on budget allocation rates. There was no procedure in place to determine if a true-up was necessary from allocated costs. 37 transactions were tested, of which three were charged based on budgets and were not trued-up. Cause: National CASA/GAL did not have policies and procedures in place requiring the retention of the review and approval of timesheet allocations (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure allocations are adequately reviewed and approved, and document this review and approval, National CASA/GAL could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement National CASA/GAL is entitled to under the terms of the grant. Questioned Costs: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. There were 61 total timesheets tested for controls across both programs (51 within Court Appointed Special Advocates and ten within the Juvenile Mentoring Program). 97 total payroll transactions were tested across both programs (60 for Court Appointed Special Advocates and 37 for the Juvenile Mentoring Program) for compliance. Payroll costs for the Court Appointed Special Advocates in 2022 were $3,734,509. Payroll costs for the Juvenile Mentoring Program in 2022 were $160,643. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that National CASA/GAL consistently document the review and approval of the payroll allocations (journal entries), including any budget true-ups that are required for estimates at year end. Views of Responsible Officials: Management agrees with the finding that documentation of review and approval of journal entries was not retained and that a true-up of estimates was not specified in procedures. Management revised the control process in 2023 to include detailed review and approval of allocation workbooks within the general ledger. Management additionally has updated their policies and procedures to evaluate year-end payroll accruals and the considerations for any necessary true-ups.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: Per 2 CFR §200.430, Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated.” Condition: For both programs, National CASA/GAL did not include the retention of reviewed payroll allocation workbooks (journal entry support) in its procedures. No transactions were selected for testing related to the review of these workbooks as the control was determined to not be functioning prior to testing. Additionally, we noted that National CASA/GAL allocated year-end payroll accrual expenditures to the Juvenile Mentoring Program based on budget allocation rates. There was no procedure in place to determine if a true-up was necessary from allocated costs. 37 transactions were tested, of which three were charged based on budgets and were not trued-up. Cause: National CASA/GAL did not have policies and procedures in place requiring the retention of the review and approval of timesheet allocations (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure allocations are adequately reviewed and approved, and document this review and approval, National CASA/GAL could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement National CASA/GAL is entitled to under the terms of the grant. Questioned Costs: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. There were 61 total timesheets tested for controls across both programs (51 within Court Appointed Special Advocates and ten within the Juvenile Mentoring Program). 97 total payroll transactions were tested across both programs (60 for Court Appointed Special Advocates and 37 for the Juvenile Mentoring Program) for compliance. Payroll costs for the Court Appointed Special Advocates in 2022 were $3,734,509. Payroll costs for the Juvenile Mentoring Program in 2022 were $160,643. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that National CASA/GAL consistently document the review and approval of the payroll allocations (journal entries), including any budget true-ups that are required for estimates at year end. Views of Responsible Officials: Management agrees with the finding that documentation of review and approval of journal entries was not retained and that a true-up of estimates was not specified in procedures. Management revised the control process in 2023 to include detailed review and approval of allocation workbooks within the general ledger. Management additionally has updated their policies and procedures to evaluate year-end payroll accruals and the considerations for any necessary true-ups.
Federal Agency: Department of Justice Federal Assistance Listing Numbers: 16.756, 16.726 Programs: Court Appointed Special Advocates, Juvenile Mentoring Program Award/Pass-Through Entity Identifying Numbers: 2018-CH-BX-K001, 15PJDP-21-GK-02762-CASA, 2019-MU-FX-0004, 2020-JU-FX-0028 Criteria: Per 2 CFR §200.430, Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the federal award is accurate, allowable, and properly allocated.” Condition: For both programs, National CASA/GAL did not include the retention of reviewed payroll allocation workbooks (journal entry support) in its procedures. No transactions were selected for testing related to the review of these workbooks as the control was determined to not be functioning prior to testing. Additionally, we noted that National CASA/GAL allocated year-end payroll accrual expenditures to the Juvenile Mentoring Program based on budget allocation rates. There was no procedure in place to determine if a true-up was necessary from allocated costs. 37 transactions were tested, of which three were charged based on budgets and were not trued-up. Cause: National CASA/GAL did not have policies and procedures in place requiring the retention of the review and approval of timesheet allocations (journal entries). Effect or Potential Effect: Without adequate controls in place to ensure allocations are adequately reviewed and approved, and document this review and approval, National CASA/GAL could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement National CASA/GAL is entitled to under the terms of the grant. Questioned Costs: Below reporting threshold. Context: This is a condition identified per review of National CASA/GAL’s compliance with specified requirements not using a statistically valid sample. There were 61 total timesheets tested for controls across both programs (51 within Court Appointed Special Advocates and ten within the Juvenile Mentoring Program). 97 total payroll transactions were tested across both programs (60 for Court Appointed Special Advocates and 37 for the Juvenile Mentoring Program) for compliance. Payroll costs for the Court Appointed Special Advocates in 2022 were $3,734,509. Payroll costs for the Juvenile Mentoring Program in 2022 were $160,643. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that National CASA/GAL consistently document the review and approval of the payroll allocations (journal entries), including any budget true-ups that are required for estimates at year end. Views of Responsible Officials: Management agrees with the finding that documentation of review and approval of journal entries was not retained and that a true-up of estimates was not specified in procedures. Management revised the control process in 2023 to include detailed review and approval of allocation workbooks within the general ledger. Management additionally has updated their policies and procedures to evaluate year-end payroll accruals and the considerations for any necessary true-ups.
Criteria: In accordance with 2 CFR Section 200.430.8(i), charges to Federal awards for salaries and wages must be based on records that reflect the actual work performed. The charges must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and must be incorporated into the official records of the non-Federal entity. In addition, 2 CFR Section 200.430.8(i)(viii) states that budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting, provided certain additional internal controls are implemented. Condition: During our testing of salaries and wages, we noted that all 242 sampled transactions did not have adequate supporting documentation and necessary approvals. Charges to Federal awards for salaries and wages were based on estimated allocations, rather than use of a system of internal controls that accounts for actual time and effort allocations. Allocation schedules, which included calculation and position title errors, were not prepared timely and documentation of approval by individuals knowledgeable of the Federal program was not retained. Cause: While there is a time keeping system implemented to track daily hours worked by employees, the Corporation’s current internal control system does not allow for specific coding for time actually spent on each federally funded program that would support the amount charged to the Federal award. Effect or Potential Effect: We were unable to determine whether charges to Federal awards for salaries and wages reflect specific time worked or amounts allocated by employee to specific Federal programs. Allowable costs incurred by the Corporation exceeded the amount of approved grant funding, therefore no questioned costs are reported. Questioned costs: Unknown Context: We selected 242 salary transactions charged to the Federal programs to test controls over allowable costs. All transactions charged to the Federal programs were based on budgeted Full Time Equivalents (FTE), and not actual hours employees worked for each Federal program. No analysis or true-up was performed to determine the accuracy of employee titles or amounts charged versus actual time and effort incurred. This is a condition identified per review of the Corporation’s compliance with specified requirements using a statistically valid sample. Repeat finding: This is a repeat finding from prior year. This was reported as finding 2021-005 in the 2021 report. Recommendation: We recommend the Corporation develop and incorporate internal controls in order to track specific time spent on each Federal program. This can include, time and effort reports completed on a routine basis, such as monthly, and adjust program expenditures as needed to properly reflect actual work performed. Completed time and effort reports should be reviewed and verified by management for accuracy. View of Responsible Officials: Due to turnover of several key financial executives and personnel, the Corporation did not maintain evidence of approval of salary and wage allocations.