2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
2022-006 Cost Principles over Compensation (Noncompliance and Material Weakness in Internal Controls over Compliance – 21.023) Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430(i)(1)(viii) states budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Context: Audit procedures revealed that there was a lack of clear documentation to support the actual hours that were allocated or expensed to each program. Cause: The Organization records payroll expenses by award based on an estimate with a set number of hours allocated per pay period to each award. Actual payroll hours expensed to the grant were not tracked. Effect: The Organization was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation Questioned Costs – Unknown Recommendation: Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements. Views of Responsible Officials and Planned Corrective Actions: Management will revise their policies for tracking of time and related payroll costs to at least have some follow-up of tracked hours and consider the need for a subsequent adjustment to initial allocation of payroll costs.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: We noted that the Village allocated payroll expenditures to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster during 2022 based on budget allocation rates or employees’ schedules. For the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster, the majority of employees did not track actual time and effort for comparison to budget allocations or employees’ schedules. There was no procedure in place to determine if a true-up was necessary from allocated costs. 180 timesheets were tested during the audit (60 for each program). All 60 were charged based on employee schedules for Health Center Program Cluster. 59 timesheets of the 60 tested were charged based on budgets for the CDBG-Entitlement Grants Cluster. Lastly, 45 timesheets of the 60 tested were based on budgets for the Emergency Solutions Grants Program. Cause: The Village did not have policies and procedures in place to review and reconcile the estimated amounts of payroll expenditures charged to the CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, and the Health Center Program Cluster to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted allocations are reasonable and reconcile to the actual time spent on the program, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known CDBG-Entitlement Grants Cluster: $16,765 Likely CDBG-Entitlement Grants Cluster: $842,671 Known Emergency Solutions Grants Program: $9,453 Likely Emergency Solutions Grants Program: $1,646,760 Known Health Center Cluster Program: $27,601 Likely Health Center Cluster Program: $2,133,947 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Any payroll costs not adequately support by time and effort reports are considered questioned costs. Identification as a Repeat Finding: 2021-007. Recommendation: We recommend that the Village implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR §200.430. Views of Responsible Officials: Management agrees with the finding. Management is updating their written procedures to ensure that allowable costs and cost principles comply with §200.430 as well as enhancements to the time entry system and allocation procedures.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.231, 14.241 Program: Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-21-35, HHI-20-21, 563770, 558951 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated…” Condition: For the Housing Opportunities for Persons with AIDS, for 12 out of 60 sample selections, calculation errors were found in the request for reimbursement resulting in small differences between actual payroll costs and the amounts charged to the program. We also noted that in 14 of the 60 samples selections for the Emergency Solution Grant Program, had similar calculation errors. This is an indication that controls are not functioning at a level to detect and correct all errors. Cause: The Village relied heavily on manual processes which are more prone to errors, and did not have an adequate review process to identify and correct calculation errors within the request for reimbursement. Effect or Potential Effect: Calculation errors may go undetected without adequate controls in place. The Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Emergency Solutions Grants Program: $277 Likely Questioned Costs Emergency Solutions Grants Program: $44,276 Known Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Likely Questioned Costs Housing Opportunities for Persons with AIDS: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $1,529,275. Payroll costs including fringe benefits for the Housing Opportunities for Persons with AIDS in 2022 were $708,148 with known questioned costs of $427 and likely questioned costs of $18,245. Identification as a Repeat Finding: 2021-012. Recommendation: We recommend system improvements that require less manual entry and implement policies and procedures to review calculations within the requests for reimbursement prior to submission. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to reduce manual errors.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.218, 14.231, 93.224 & 93.527 Program: CDBG-Entitlement Grants Cluster, Emergency Solutions Grants Program, COVID-19 Emergency Solutions Grants Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HHI-21-03, HHI-22-21, NCIP-FY20-010, HHI-21-35, HHI-20-21, 563770, 19H80CS10606, 21H8FCS40355C6 Criteria: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain the records for timesheet approvals by the employee and/or direct supervisor. We noted in accordance with §200.430(i) that 34 out of 60 samples selected for testing within the Community Development Grants Program, did not have employee and/or supervisor approval. We noted 19 out of 60 samples selected for testing within the Health Center Program Cluster, that did not have documentation of employee and/or supervisor approval. We noted 44 out of 60 samples selected for testing within the Emergency Solutions Grants Program, did not have documentation of employee and/or supervisor approval. Cause: The Village did not have policies and procedures in place to timely receive and retain sufficient documentation over the approval of timesheets. Effect or Potential Effect: Without adequate controls in place to ensure timesheets are adequately reviewed and approved, the Village could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Known Questioned Costs Community Development Block Grant: $7,528 Likely Questioned Costs Community Development Block Grant: $378,395 Known Questioned Costs Health Center Program Cluster: $16,397 Likely Questioned Costs Health Center Program Cluster: $1,267,711 Known Questioned Costs Emergency Solutions Grants Program: $9,472 Likely Questioned Costs Emergency Solutions Grants Program: $1,649,038 Context: Payroll costs including fringe benefits for the CDBG-Entitlement Grants Cluster in 2022 were $848,919. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2022 were $2,052,649. Payroll costs including fringe benefits for the Health Center Program Cluster in 2022 were $2,133,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently obtain and retain timesheet approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.430(i) states that “charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Federal Agencies: Department of Housing and Urban Development Federal Assistance Listing Numbers: 14.241 Program: Housing Opportunities for Persons with AIDS, COVID-19 Housing Opportunities for Persons with AIDS Award/Pass-Through Entity Identifying Numbers: 558951 Criteria: The Uniform Guidance in 2 CFR §200.430(i) states that “charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; and (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) The system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) Significant changes in the corresponding work activity (as defined by the non-Federal entity’s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.” Condition: The Village did not maintain all records for timesheet approvals by the employee and/or direct supervisor. We noted 7 out of 60 samples selected for testing within the Housing Opportunities for Persons with AIDS, that did not have documentation of employee and/or supervisor approval. Cause: The Village’s record retention policy within its payroll system allows for certain details related to timecards and employee and supervisor approvals to be deleted after one year. Because of this policy, records were not available for inspection during the audit to verify that costs were appropriately reviewed and approved in accordance with 2 CFR 200.430. Effect or Potential Effect: The Village could not provide appropriate evidence to verify that internal controls functioned during the audit period and costs were charged to the federal program in accordance with the requirements of 2 CFR.430. Questioned Costs: Known Questioned Costs: None above the $25,000 reporting threshold. Likely Questioned Costs: None above the $25,000 reporting threshold. Context: Payroll costs including fringe benefits in 2022 were $708,148 with known questioned costs of $373 and likely questioned costs of $15,947. Questioned costs consist of amounts lacking documentation of fully approved timesheets. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Village consistently retain timesheet records and approvals by both the employee and supervisor for each pay period requested for reimbursement by the grantor. These records should be maintained at least through the close out of the grant and completion of required audits. Views of Responsible Officials: Management agrees with the finding. Management is in the process of upgrading the system utilized for time and entry allocations to grants to ensure accurate and timely time entry record keeping. The record retention policy for timesheets will be extended.
Finding 2022-001 Significant deficiency in internal control over allowable costs. Federal Agency: Department of the Treasury Program Title: Emergency Rental CFDA Number: 21.023 Award Numbers: OH21-BBP1 Award Period: May 15, 2021 ? September 30, 2022 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E section 200.430 requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition/Context for Evaluation During our audit, we tested salary costs charged to the federal award, noting compensation expenses consisted of the entire salary of one employee who did not work on more than one federal award and allocated compensation costs for multiple other employees. Allocated compensation costs were charged to the award based upon budget estimates which were not adjusted for actual time dedicated to the award and did not support the distribution of salary or wages among specific cost objectives. Questioned Costs Not applicable Effect or Potential Effect The Organization may have charged costs to the federal award in excess or below actual benefit received by the award. Repeat Finding Partially, see prior year finding 2021-002 Recommendation We recommend the Organization implement the necessary internal controls to ensure documentation is retained to support actual effort spent on federal awards. Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Federal Program Information: WIOA Pilots, Demonstrations, and Research Projects (ALN#: 17.261) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): B. Allowable Costs/Cost Principles ? 2 CFR 200 Subpart E- Cost Principles ? 200.430 Compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Compensation for personal services may also include fringe benefits which are addressed in ? 200.431. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, when applicable. Condition: An instance was identified where BGCA allocated costs in excess of actual services rendered. Cause: Insufficient internal controls and administrative oversight with respect to payroll and fringe expenditure allocation based on approved hours worked on federal grant. Effect: BGCA was not in compliance with allowable cost requirements. Questioned Costs: Amount was below reportable threshold. Context: For 1 of 5 employees selected for testing, payroll expenditures and fringe benefits were allocated to the grant in excess of actual hours worked. Consequently, the overallocated expenditures were submitted and approved for reimbursement in excess of actual expenses incurred. Identification as a Repeat Finding: No similar findings noted in the prior year. Recommendation: We recommend BGCA enhance its internal controls and policies and procedures over allocation of payroll and fringe expenditures to federal grants based on actual hours worked. Views of Responsible Officials and Planned Corrective Actions: Management will implement a new quality review process to ensure that correct default fund codes are assigned to staff for the DOL WPY grant. In addition, management will implement a complete oversight review of all grant time charges in advance of the execution of a drawdown of DOL funds.
Criteria or Specific Requirement: The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires that non-Federal entities receiving Federal awards (i.e. auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR ? 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (the following is not a comprehensive list of requirements): ** Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. ** Be incorporated into the official records of the non-Federal entity. ** Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. ** Encompass both federally assisted, and all other activities compensated by the non- Federal entity on an integrated basis but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. ** Comply with the established accounting policies and practices of the non-Federal entity. ** Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The City did not have records to adequately support payroll costs of the DDPHE Department Director allocated to the program. Cause: The City does not require employees working on multiple programs to certify their time and effort spent on each program. Time charged for the Director was based on a flat rate percentage of 25%; there was no support for the percentage used. Effect or Potential Effect: Payroll expenditures charged to the grant may be in excess of actual time and effort devoted to the program. Questioned Costs: The total amount of payroll charged to the program for the DDPHE Department Director of $26,816 (25% of the Director?s annual salary). Context: During follow-up on a prior year finding (2021-015), BDO noted the City had not yet implemented corrective action with respect to how time and effort should be recorded and had not performed periodic reviews to true-up time to the actual time and effort spent on the grant. For the year ended December 31, 2022, a portion of the Director?s salary in the amount of $26,816 was charged to the grant without documentation of time and effort. Identification as a Repeat Finding: This is a repeat finding from prior year. This was reported as finding 2021-015 in the 2021 report. Recommendation: The Department should implement policies and procedures pertaining to employees not 100% funded by grant programs. These policies and procedures should outline how time and effort should be recorded and provide for periodic reviews to true-up time to the actual time and effort spent on the grant. Views of Responsible Officials: The City agrees with the finding and has implemented a process requiring review and approval of personnel costs that are allocated to the grant at less than 100%. For additional information, see the City?s separate report for planned corrective action.
Finding 2022-002: Failure to Maintain Proper Documentation of Time and Effort Reporting Federal Agency: U.S. Department of Health and Human Services (HHS) Program Name: Illinois SOR2 ALN and Program Expenditures: 93.788 ($1,232,160) Federal Award Numbers: H79TI083278 Federal Award Year: 2022/2023 Questioned Costs: None Compliance Requirement: Allowable Costs Type of Finding: Material Weakness and Material Noncompliance Condition Found: Carle did not have proper documentation of time and effort relating to personnel costs charged to the program. In testing of 27 selected payroll costs, Carle was unable to provide physical documentation of timesheets or other effort tracking to support the amounts allocated by percentage to the Illinois SOR2 award. Though Carle was able to provide rationale for the amounts allocated including estimated time spent on the award, allocations do not meet standards for documentation of personnel expenses. Criteria or Requirement: 2 CFR 200.430(i) requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Budget estimates alone do not qualify as support for charges to Federal awards. 2 CFR 200.303 requires non-Federal entities receiving Federal awards to establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure time charged to federal grants is appropriately tracked and certified. Cause: In discussion with Carle management, internal controls were not effectively implemented at the organizational level or cascaded to department leadership. This was the first grant for the department and while internal controls were in place, it is clear they were not sufficient. Possible Asserted Effect: Failure to maintain appropriate documentation of personnel costs may lead to questioned costs or inaccurate reporting of federal expenditures. Repeat Finding: A similar finding was not reported in the prior year audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend Carle evaluate its process for preparing and reviewing time tracking for federal awards and implement the procedures necessary to ensure documentation of personnel costs are complete and accurate. Views of Management: There is an understanding of the finding, and a need for corrective action. Actions have already been put into place to improve internal controls and ensure compliance in maintaining proper documentation of time and effort reporting for federal awards.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-001 Documentation of Personnel Expenses (Timesheets) Material Weakness Criteria: Generally accepted accounting principles in the United States (GAAP) requires entities to establish and maintain effective internal controls over financial reporting to ensure accurate financial reports. A good system of internal controls requires contemporaneous timesheets be maintained for all employees and the timesheets should be signed by both the employee and the supervisor. 2 CFR Section 200.430 also requires charges to federal awards for salaries and wages to be based on records that accurately reflect the work performed. Condition: A sample of ten employees was selected from four payrolls throughout the year under audit. 27 employees did not have timesheets. Cause: Management believed that full-time salaried employees did not require a timesheet. Effect: Contemporaneous documentation was not obtained from employees. Subsequent, employees signed certifications for the allocation of their time. Auditor?s Recommendation: We recommend that management require all employees to complete a timesheet which includes all required UG elements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and has already taken corrective action. On January 1, 2023 an electronic time reporting function was put into effect through ADP (?Automatic Data Processing?), the company?s payroll processing system. This improvement allows employees to enter their time and select a cost center (?department code?) at the time of entry. It then routes the timesheet for approval by the supervisor before reaching the accounting department for payment initiation, resulting in an automated review and approval.
DEPARTMENT OF HEALTH AND HUMAN SERVICES Program Information Assistance Listing # 93.137 Community Programs to Improve Minority Health Grant Program 2022-001 Documentation of Personnel Expenses (Timesheets) Material Weakness Criteria: Generally accepted accounting principles in the United States (GAAP) requires entities to establish and maintain effective internal controls over financial reporting to ensure accurate financial reports. A good system of internal controls requires contemporaneous timesheets be maintained for all employees and the timesheets should be signed by both the employee and the supervisor. 2 CFR Section 200.430 also requires charges to federal awards for salaries and wages to be based on records that accurately reflect the work performed. Condition: A sample of ten employees was selected from four payrolls throughout the year under audit. 27 employees did not have timesheets. Cause: Management believed that full-time salaried employees did not require a timesheet. Effect: Contemporaneous documentation was not obtained from employees. Subsequent, employees signed certifications for the allocation of their time. Auditor?s Recommendation: We recommend that management require all employees to complete a timesheet which includes all required UG elements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with this finding and has already taken corrective action. On January 1, 2023 an electronic time reporting function was put into effect through ADP (?Automatic Data Processing?), the company?s payroll processing system. This improvement allows employees to enter their time and select a cost center (?department code?) at the time of entry. It then routes the timesheet for approval by the supervisor before reaching the accounting department for payment initiation, resulting in an automated review and approval.
2 C.F.R. ? 2400.101 provides that unless excepted under 24 CFR chapters I through IX, the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, set forth in 2 CFR part 200, shall apply to Federal Awards made by the Department of Housing and Urban Development to non-Federal entities. 2 C.F.R. ? 200.430(a)(1) states, in part, costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities. In addition, 2 C.F.R. ? 200.430(i)(1) states, in part, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity; and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. 2 C.F.R. ? 200.430(i)(1)(viii) further states that budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that the subsequent provisions are met. Due to a lack of internal controls over federal compensation costs, Erie County General Health District ultimately paid employee wages based on pre-determined budget percentages rather than actual time worked for the Assistance Listing Number #14.900 Lead-Based Paint Hazard Control in Privately-Owned Housing federal grant program. This error resulted in $810 in salary payments being incorrectly charged to the program. Failure to have the proper controls in place to ensure the accuracy of reported payroll costs could result in the Department of Housing and Urban Development taking action against the District for failure to comply with programmatic requirements. The District should implement and have controls in place to ensure salaries and wages are properly charged to federal programs.
Federal Agency: U.S. Department of Commerce Compliance Requirement: Allowable Costs Federal Program: 11.805 - MBDA Business Center-Coronavirus Recovery/Relief Grant Award: MB21OBD8050183 Condition/Context: For some employees working under the coronavirus grants, timesheets were submitted and approved several months after the grant period ended. As a result, payroll costs charged to the grant were based on budgeted amounts rather than actual hours worked per timely submitted timesheets. Criteria: 2 CFR 200.430(i) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Timesheets must be submitted and approved in a timely manner. Cause: CRMSDC's internal controls over payroll charging practices for the federal program were not properly implemented to ensure timesheets were completed and approved promptly. Effect: CRMSDC's actual payroll costs per the late timesheets exceeded the budgeted amount charged to the grant. Questioned Costs: No overcharge costs resulted since CRMSDC charged less than actual supported costs. Recommendation: We recommend CRMSDC implement proper internal controls to ensure timesheets are completed, submitted, reviewed, and approved prior to payroll processing and charging payroll costs to the federal program. Supervisors should be required to review timesheets for appropriateness and accuracy. Views of Responsible Officials and Planned Corrective Actions: See Corrective Action Plans section
Section III - Federal Awards Findings Finding 2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Microloan Technical Assistance Program Federal Assistance Listing Number: 59.046 Compliance Requirements: Allowable costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed which must, among other things be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition The Organization was reporting budgeted hours in the quarterly reimbursement requests rather than actual hours worked for the Technical Assistance Microloan Program. Context: A sample of 3 employees were selected from a population of 22 employees. We identified exceptions in 1 out of the 3 employees' timecards we tested. One employee charged budgeted hours to their timecard as opposed to actual hours. This caused CDC to overcharge the program by $5,879. Cause: Insufficient supervisor review led to supervisors approving budgeted time as opposed to actual time. Effect or Potential Effect: CDC Small Business Finance Corp. was not in compliance with the terms and conditions of the award, nor with the allowable costs/cost principle requirement of the Uniform Guidance. Questioned Costs: N/A Identification as a Repeat Finding This finding is not a repeat finding. Auditor's Recommendation: CDC should ensure that supervisors have adequate training to properly review employee timecards to ensure that actual hours worked are appropriately charged to the Technical Assistance Program. Views of Responsible Officials CDC's management performed a review of all payroll charges submitted to the U.S. Small Business Administration ("SBA") in relation to the Microloan Technical Assistance Program and noted that CDC had been overcharging the SBA for multiple years. CDC's management notified the SBA of the discrepancy and worked with the SBA to determine the amount to reimburse the SBA. The SBA accepted the reimbursement as well as management's proposed resolution.
Finding 2022-010 Program Affected: 66.818 Brownfields Assessment and Cleanup Cooperative Agreements U.S. Environmental Protection Agency Contract year: 2022 FAIN: 00A00664 / 00A00676 / 00A00909 Criteria: 2 CFR ?200.430(i) specifies that "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated..." Condition and Context: The Organization did not maintain documentation of what program the employee or the paid consultant expended time and effort on, and therefore was charging an estimated amount of time to the federal program that is not directly supported by a timecard or invoices. Additionally, the rate charged was not directly calculated based on the rate that the employee and the consultant were paid, but rather the Organization billed the federal program for an estimate which approximated the rate they were paid. During our nonstatistical sampling of costs, we noted 6 of 6 transactions tested were not properly supported. Cause and Effect: The Organization does not have internal processes to properly document and retain records which would appropriately support the amounts charged to the federal grant. The Organization does not have processes in place to properly document and retain the review of the calculation of billings charged to the federal grant. As a result, the Organization would not be able to properly identify unallowable costs charged to the major federal program. Questioned Costs :N/A Identification of Repeat Findings N/A Recommendation : We recommend the Organization bill the major federal program based on actual hours and rates charged by employees and contractors. Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding. See attached Planned Corrective Actions.
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: 14.889 - Choice Neighborhoods Implementation Grants Federal Award Year: 2022 Name of Pass-Through Entity: Cuyahoga Metropolitan Housing Authority; City of Detroit Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; and (iv) Support the distribution of the employee's salary or wages among specific activities. Condition: The Community Builders, Inc. and Subsidiaries (the ?Company?) used grant budgets as the only support for the salaries and wages charged to the grants under the Choice Neighborhoods Implementation Grants program, which is specifically disallowed per Paragraph (i)(1)(viii) of 2 CFR 200.430. Cause: Management did not implement internal control procedures to comply with the regulations for documentation of personnel expenses. Effect: Salary and wage costs may be charged to the program that are inaccurate, unallowable, or not properly allocated. Questioned Costs: The questioned costs relate to six employees whose salaries and wages charged to the program are allocated at less than 100%. The total charges for these employees were calculated as $73,804. Context: The audit finding is prevalent because it relates to payroll charges allocated on a bi-weekly basis and to requests for reimbursement processed monthly for the City of Detroit grant and periodically for the Cuyahoga Metropolitan Housing Authority (?CMHA?) grant and is not an isolated instance as it relates to the Company not implementing appropriate and complete record keeping procedures for the federal program to comply with the regulations for documentation of personnel expenses. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Company should establish a system of internal controls to provide reasonable assurance that salary and wage costs are accurate, allowable, and properly allocated by basing salaries and wages charged to federal awards on underlying records that accurately reflect all work performed on a daily basis in accordance with 2 CFR 200, Subpart E, Subsection 430.
Name of Federal Agency: Department of Housing and Urban Development Federal Program Name and Assistance Listing Number: 14.889 - Choice Neighborhoods Implementation Grants Federal Award Year: 2022 Name of Pass-Through Entity: Cuyahoga Metropolitan Housing Authority; City of Detroit Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; and (iv) Support the distribution of the employee's salary or wages among specific activities. Condition: The Community Builders, Inc. and Subsidiaries (the ?Company?) used grant budgets as the only support for the salaries and wages charged to the grants under the Choice Neighborhoods Implementation Grants program, which is specifically disallowed per Paragraph (i)(1)(viii) of 2 CFR 200.430. Cause: Management did not implement internal control procedures to comply with the regulations for documentation of personnel expenses. Effect: Salary and wage costs may be charged to the program that are inaccurate, unallowable, or not properly allocated. Questioned Costs: The questioned costs relate to six employees whose salaries and wages charged to the program are allocated at less than 100%. The total charges for these employees were calculated as $73,804. Context: The audit finding is prevalent because it relates to payroll charges allocated on a bi-weekly basis and to requests for reimbursement processed monthly for the City of Detroit grant and periodically for the Cuyahoga Metropolitan Housing Authority (?CMHA?) grant and is not an isolated instance as it relates to the Company not implementing appropriate and complete record keeping procedures for the federal program to comply with the regulations for documentation of personnel expenses. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: The Company should establish a system of internal controls to provide reasonable assurance that salary and wage costs are accurate, allowable, and properly allocated by basing salaries and wages charged to federal awards on underlying records that accurately reflect all work performed on a daily basis in accordance with 2 CFR 200, Subpart E, Subsection 430.
2022-003 Department of Education and Passed through State of South Dakota Department of Education Federal Financial Assistance Listing #84.425C, 2021G-798, 03/13/2020 ? 09/30/2022 COVID-19 Education Stabilization Fund - Governor?s Emergency Education Relief (GEER) Fund Federal Financial Assistance Listing #84.287C, 21-80064-22, 21-80064-23, 7/1/2021 ? 6/30/2022, 7/1/2022 ? 6/30/2023 Twenty-First Century Community Learning Centers Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: The amount of payroll taxes allocated to the GEER program exceeded the amount of payroll taxes actually paid for two of two employees tested. Additionally, one instance in which an employee?s overtime hours was not charged to the Twenty First Century Program. Lastly, one instance in which one employee?s biweekly wages were not charged to the Twenty First Century Program. Cause: Tracking of grant-related payroll is a manual process which increases the likelihood of error. Effect: Payroll and related costs were not properly reported by an insignificant amount. Questioned Costs: None reported Context: For the GEER program, a non-statistical sample of 6 employees were selected for testing of approximately 17 total employees whose time was charged to the federal award. The 6 employees selected for testing accounted for $53,784 of the $146,073 payroll costs charged to the federal award in the fiscal year. For the Twenty First Century Community Learning Centers Program, a non-statistical sample of 60 expenditures were selected for testing, including 56 payroll transactions and 4 nonpayroll transactions. The 56 payroll transactions accounted for $35,585 of $213,359 total payroll costs charged to the federal award. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
2022-003 Department of Education and Passed through State of South Dakota Department of Education Federal Financial Assistance Listing #84.425C, 2021G-798, 03/13/2020 ? 09/30/2022 COVID-19 Education Stabilization Fund - Governor?s Emergency Education Relief (GEER) Fund Federal Financial Assistance Listing #84.287C, 21-80064-22, 21-80064-23, 7/1/2021 ? 6/30/2022, 7/1/2022 ? 6/30/2023 Twenty-First Century Community Learning Centers Program Activities Allowed or Unallowed and Allowable Costs/Cost Principles Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the official records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: The amount of payroll taxes allocated to the GEER program exceeded the amount of payroll taxes actually paid for two of two employees tested. Additionally, one instance in which an employee?s overtime hours was not charged to the Twenty First Century Program. Lastly, one instance in which one employee?s biweekly wages were not charged to the Twenty First Century Program. Cause: Tracking of grant-related payroll is a manual process which increases the likelihood of error. Effect: Payroll and related costs were not properly reported by an insignificant amount. Questioned Costs: None reported Context: For the GEER program, a non-statistical sample of 6 employees were selected for testing of approximately 17 total employees whose time was charged to the federal award. The 6 employees selected for testing accounted for $53,784 of the $146,073 payroll costs charged to the federal award in the fiscal year. For the Twenty First Century Community Learning Centers Program, a non-statistical sample of 60 expenditures were selected for testing, including 56 payroll transactions and 4 nonpayroll transactions. The 56 payroll transactions accounted for $35,585 of $213,359 total payroll costs charged to the federal award. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management implement procedures and control processes to comply with the federal requirements noted above. Views of Responsible Officials: Management is in agreement.
2022 ? 001 DOCUMENTATION OF PERSONNEL EXPENSES CHARGED TO FEDERAL AWARDS Criteria: 2 CFR ? 200.430 explains that personnel expenses charged to multi-funding sources have adequate authorization and specific activities be documented. Condition: During our testing of the HHS Two Generational Mental Health (Block Grants for Community Mental Health Services), authorized timesheets were not able to be observed, and allocation of different funding activities were not formally documented. Cause: Mountain Home Montana, Inc. needs to authorize Federal and non-Federal activities in a documented support to show Federal payroll activities of the Grant. Effect: Uniform Guidance timesheet support documentation is not adhered to as the Federal grant requires. Recommendation: We recommend that management implement internal control policies, that supports timesheet approval with time sheet activities associated with each different funding level. These timesheets need to be able to support the salary levels and be reproduced with approval signatures to support the Federal expenditures.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
FINDING 2022-002 Identification of the Federal Program: 21st Century Community Learning Centers (Assistance Listing 84.287C), Temporary Assistance for Needy Families (Assistance Listing 93.558) Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Allowable Costs/Cost Principles - According to 2 CFR ?200.430(i)(viii), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing the estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner; and (C) the non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates. Condition: Records to substantiate the allocation of payroll costs to the grant were not maintained. Cause: Lack of internal controls and administrative oversight with respect to time and effort recordkeeping. Effect or Potential Effect: The Organization did not meet the standards for documentation of personnel expenses. Questioned Costs: Indeterminable. Context: Time and effort system was not implemented until after the audit year; as such, timesheets could not be provided to substantiate hours allocated to the Organization?s federal awards. Identification as a Repeat Finding: This is a repeat finding of Finding 2021-001. Recommendation: We recommend that the Organization establish policies and procedures as well as enhance its internal controls to ensure that salaries and wages charged to a federal award accurately reflect the work performed. Views of Responsible Officials: The Alliance employees will implement a policy and procedures, as well as grant requirements, to ensure that timesheets are completed and certified by both the employee and their supervisor. All Alliance employees will begin to record and submit grant time physical Timesheets. The Timesheets will be used to determine the appropriate amount of the employee?s payroll and payroll related costs that should be allocated to the grant(s) that receive the benefit of the employee?s time and effort. This finding was identified by the Alliance prior to audit when new Executive Director Awisi Bustos began her leadership at the Alliance in January of 2023. It was identified that the prior years corrective action plan was determined to be ineffective. The corrective action plan laid out here has already taken effect.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.431 - Compensation - Fringe Benefits: ?The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in ? 200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.? Per 2 CFR Section 200.430 - Compensation ? Personnel Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: a. The system for establishing the estimates produces reasonable approximations of the activity actually performed. b. Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and c. The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? In addition, per 2 CFR Section 200.403 regarding all direct costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: We noted that Safe & Sound allocated fringe benefits during 2022 based on a flat percentage of salaries charged to the grant based on a methodology determined during the budget making process. The methodology was isolated to charges of fringe benefits. In addition, shared costs (e.g., insurance and occupancy) during 2022 were charged on a monthly basis as one twelfth of the total budgeted amount for the year. The methodology was isolated to certain shared costs. Safe & Sound does not have a process in place to true-up certain costs charged based on budget during interim periods to actual amounts. Context: Total fringe benefits charged to the grant were $38,534. Total shared costs charged to the grant were $16,536. Cause: Safe & Sound did not have policies and procedures in place to review and reconcile the budgeted amounts of fringe benefits or shared costs charged to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted totals are reasonable and reconcile to the actual time spent on the program, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement. Safe & Sound is entitled to under the terms of the grant. Questioned Costs: $55,070 Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend training be provided to staff on requirements of their federal grants. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actuals are properly supported.