Finding Number: Prior Year Finding Number:N/A Compliance Requirement:Allowable Costs/Cost Principles Program:CSLRF Pass through Entity: Office of Out of School Times Grant and Youth Outcomes and NAARC - Safe Passage Safe Blocks CFDA #:21.027 Award #:SY2021-22-SPSB-008-CSC: Award Year:10/01/2021-09/30/2022 Criteria: 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 statutes, regulations, and the terms and conditions of the federal award. In addition, 2 CFR 200.430 ? Factors Affecting Allowability of Costs - Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (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 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 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. (h)Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to ?200.308(e)(3). Condition: We sampled 40 payroll expense transactions and noted the following: ? 17 payroll transactions did not satisfy the prohibited felony background requirements as specified in the Safe Passage Safe Block grant agreement for personnel hired under this award. ? 14 payroll transactions from the Safe Passage Safe Block award did not show evidence of clearance by the D.C. Child and Family Services Child Protection Registry (CPR) and four (4) transactions did not show evidence of Metropolitan Police Department Criminal Background Check as a condition for employment. ? CSC received four (4) separate awards funded under this CFDA number. Two of the four awards were funded under the Safe Passage Safe Blocks program and CSC failed to provide the detail expenses of $212,866 to support federal revenues received from one of the grantors. Questioned Costs:$242,698 Context: This is a condition identified per review of CSC?s compliance with the specified requirements using a statistically valid sample. The known amount of the payroll transactions totaled $29,832 and the total of the pass-through award without detail expenses amounted to $212,866. Effect:CSC is not in compliance with the stated provisions of the grant awards. Failure to properly review and support expenses can result in noncompliance with laws and regulations along with loss of funding. Cause:CSC did not appear to have adequate policies and procedures in place to ensure compliance with the required stipulations regarding background and other checks and ensuring that expenses exist prior to funds being reimbursed. Recommendation:We recommend that CSC ensure that personnel hired under the grant meet all the background and other checks within the stipulated time frame outlined in the grant agreement. We recommend that CSC strengthen its processes with respect to setting up and charging expenditures between various grant awards. We also recommend that CSC improve internal controls to ensure adherence to Federal regulations related to the fiscal and administrative requirements for expending and accounting for expenses incurred and reported.
Agency: Department of Health and Human Services, Centers for Disease Control and Prevention Federal Program: Immunization Research, Demonstration, Public Information and Education Training and Clinical Skills Improvement Projects Assistance Listing: 93.185 Grant Identification Numbers: NH231P922569 and NH231P922569C5 ? COVID-19 Grant Period: 2022 Finding 2022-001: Significant Deficiency - Internal Controls Over Payroll Criteria: Per 2 CFR 200.430(i), payroll charges must ?be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Condition: There were deficiencies found when testing internal controls over payroll, impacting internal controls over financial reporting and internal controls over compliance. Documentation of review of timesheets by an appropriate level of supervisor was not consistent. Context: Statistical sampling was not utilized, however, sampling methods were applied using AICPA guidelines. Finding 2021-002 noted that AIM employees do maintain timesheets; however, documentation of a review of the time allocation by a supervisor was not consistent. We noted this issue continued at the beginning of the 2022 fiscal year. After policy changes as a result of addressing finding 2021-002, approval by a supervisor was documented consistently. Cause: A formal policy was not in place for the full year that would require approval of timesheets by a supervisor knowledgeable about the activity of the personnel. Effect: Internal controls were not in line with best practices and the lack of approval could result in an inaccurate charge to grants. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is a repeat finding of 2021-002. Auditor?s recommendation: We recommended that AIM adopt a policy in writing that would require all timesheets be approved by an appropriate level of supervisor. This approval must be documented and retained on file as part of the Organization?s records to support grant activity. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
Agency: Department of Health and Human Services, Centers for Disease Control and Prevention Federal Program: Immunization Research, Demonstration, Public Information and Education Training and Clinical Skills Improvement Projects Assistance Listing: 93.185 Grant Identification Numbers: NH231P922569 and NH231P922569C5 ? COVID-19 Grant Period: 2022 Finding 2022-001: Significant Deficiency - Internal Controls Over Payroll Criteria: Per 2 CFR 200.430(i), payroll charges must ?be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated?. Condition: There were deficiencies found when testing internal controls over payroll, impacting internal controls over financial reporting and internal controls over compliance. Documentation of review of timesheets by an appropriate level of supervisor was not consistent. Context: Statistical sampling was not utilized, however, sampling methods were applied using AICPA guidelines. Finding 2021-002 noted that AIM employees do maintain timesheets; however, documentation of a review of the time allocation by a supervisor was not consistent. We noted this issue continued at the beginning of the 2022 fiscal year. After policy changes as a result of addressing finding 2021-002, approval by a supervisor was documented consistently. Cause: A formal policy was not in place for the full year that would require approval of timesheets by a supervisor knowledgeable about the activity of the personnel. Effect: Internal controls were not in line with best practices and the lack of approval could result in an inaccurate charge to grants. Questioned costs: There were no questioned costs related to this finding. Repeat finding: This is a repeat finding of 2021-002. Auditor?s recommendation: We recommended that AIM adopt a policy in writing that would require all timesheets be approved by an appropriate level of supervisor. This approval must be documented and retained on file as part of the Organization?s records to support grant activity. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
2022-001 Noncompliance and Internal Controls over Compliance with Cost Principles ? Compensation ? 93.569 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 adjustment 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 agreement. Cause ? The Association?s internal policy states all time entries are to reflect the time actually spent performing assigned duties on each job. In practice, the Association records payroll expenses by award based on an estimate with a set number of hours allocated per week to each award. Actual payroll hours expensed to the grant were not tracked. Effect ? The Association was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation. Questioned Costs ? None Recommendations ? Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements, as well as their own time entry policies. Views of Responsible Officials and Planned Corrective Actions ? Senior management has reviewed the Association?s policies for payroll time with the full management team. The Association will continue to use an estimate for payroll hours expensed to awards, but will also record or track actual hours and consider the need for a subsequent adjustment.
2022-001 Noncompliance and Internal Controls over Compliance with Cost Principles ? Compensation ? 93.569 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 adjustment 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 agreement. Cause ? The Association?s internal policy states all time entries are to reflect the time actually spent performing assigned duties on each job. In practice, the Association records payroll expenses by award based on an estimate with a set number of hours allocated per week to each award. Actual payroll hours expensed to the grant were not tracked. Effect ? The Association was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation. Questioned Costs ? None Recommendations ? Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements, as well as their own time entry policies. Views of Responsible Officials and Planned Corrective Actions ? Senior management has reviewed the Association?s policies for payroll time with the full management team. The Association will continue to use an estimate for payroll hours expensed to awards, but will also record or track actual hours and consider the need for a subsequent adjustment.
2022-001 Noncompliance and Internal Controls over Compliance with Cost Principles ? Compensation ? 93.569 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 adjustment 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 agreement. Cause ? The Association?s internal policy states all time entries are to reflect the time actually spent performing assigned duties on each job. In practice, the Association records payroll expenses by award based on an estimate with a set number of hours allocated per week to each award. Actual payroll hours expensed to the grant were not tracked. Effect ? The Association was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation. Questioned Costs ? None Recommendations ? Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements, as well as their own time entry policies. Views of Responsible Officials and Planned Corrective Actions ? Senior management has reviewed the Association?s policies for payroll time with the full management team. The Association will continue to use an estimate for payroll hours expensed to awards, but will also record or track actual hours and consider the need for a subsequent adjustment.
2022-001 Noncompliance and Internal Controls over Compliance with Cost Principles ? Compensation ? 93.569 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 adjustment 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 agreement. Cause ? The Association?s internal policy states all time entries are to reflect the time actually spent performing assigned duties on each job. In practice, the Association records payroll expenses by award based on an estimate with a set number of hours allocated per week to each award. Actual payroll hours expensed to the grant were not tracked. Effect ? The Association was not in compliance with financial management standards for maintaining payroll expenditure supporting documentation. Questioned Costs ? None Recommendations ? Management should strengthen their processes, controls, and review over payroll recording and documentation to ensure compliance with Uniform Administrative Requirements, as well as their own time entry policies. Views of Responsible Officials and Planned Corrective Actions ? Senior management has reviewed the Association?s policies for payroll time with the full management team. The Association will continue to use an estimate for payroll hours expensed to awards, but will also record or track actual hours and consider the need for a subsequent adjustment.
Program: Shuttered Venue Operations Program Assisting Lister Number: 59.075 Federal Grantor: U.S. Small Business Administration Passed-through: N/A Award No. and Year: SBAHQ21SV002930.2 and 2022 Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control and Instance of Non-Compliance Criteria: 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states that charges to Federal awards for salaries and wage records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the Foundation?s compliance with the Activities Allowed or Unallowed, and Allowable Costs/Costs Principles compliance requirements, we noted that in 37 of 40 payroll program expenditures selected, the employee?s timecard was not approved by a supervisor. Cause: The Foundation?s procedures did not consistently ensure that the review of timecards was documented. Effect: Lack of review and approval for personnel hours could lead to unallowable activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Repeat Finding from Prior Years: N/A ? First year of Single Audit. Recommendation: We recommend that the Foundation modify and strengthen its current policies and procedures to ensure that all timecards consistently document evidence of approval. The procedures should also address the compensating controls for circumstances where obtaining a supervisor?s approval is not possible. View of Responsible Officials: Management agrees and has designed controls for the supervisor to approve the timecards and ensure the costs are allowable costs.
Item: 2022-004 Assistance Listing Number: 14.241 Programs: Housing Opportunities for Persons with AIDS Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 144347 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: Under cost principles established by 2 CFR 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. Condition: In our sampling of payroll expenditures charged to the program, we noted one employee's wage rate charged to the grant was not updated consistent with the employee's wage rate increase paid in their payroll. As a result, the incorrect amount of payroll costs was charged to the program (undercharged). Questioned Costs: n/a Context: In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted 2 of 40 payroll selections did not reflect the correct pay rate charged to the program. We noted the program was charged with an old wage rate that was lower than the actual paid rate. As a result, the program was undercharged. This is deemed to be a material weakness in internal control over compliance. Effect: The program was undercharged payroll costs totaling approximately $9. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to ensure payroll costs charged to the grant properly reflected payroll changes and that amounts charged to the grant were properly supported by current wage rates. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to ensure payroll costs charged to the grant properly reflected payroll changes and that amounts charged to the grant were properly supported by current wage rates. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.
Finding No. 2022-003 Federal Agency: U.S. Department of Education Assistance Listing No. and Title: 84.027 Special Education – Grants to States (IDEA, Part B) Area: Allowable Costs/Cost Principles Questioned Costs: $0 Criteria: The Schedule of Expenditures of Federal Awards (SEFA) must be supported by underlying accounting and other records used in preparing the financial statements. 2 CFR 200.403(g) provides that costs must be adequately documented to be considered allowable under Federal awards. 2 CFR 200.430(i)(1)(i) requires 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: 1. For the year ended September 30, 2022, the total amount of payroll expense under ALN 84.027 determined from the journal entry details supporting the SEFA (or general ledger) was lower by $480,743 as compared to the total amount of payroll expense per labor cost summary (or subsidiary ledger). It was further noted that $404,198 out of this amount pertains to costs initially charged under the program but were reclassified to the Education Stabilization Fund (ESF) federal program through a general ledger entry only. No questioned costs are raised as the payroll costs that caused the variance were identified in detail. 2. For 3 (or 8%) of 40 transactions tested aggregating $61,202 out of $3,196,892 in total payroll expenditures, employee timecards were not provided. No questioned costs are raised as summary timesheets were provided. See Schedule of Findings and Questioned Costs for chart/table. Cause: PSS did not perform a reconciliation of the general ledger and subsidiary ledger for payroll costs. In addition, PSS failed to ensure that costs charged to the grant are adequately supported. Effect: PSS is in noncompliance with applicable allowable costs/cost principles requirements. Recommendation: PSS should implement a regular reconciliation of its labor cost summary report with the general ledger journal entries and ensure that any discrepancies are resolved or validly supported. Further, PSS should strengthen recordkeeping procedures so that documents are readily available to substantiate costs charged to the grant. Views of responsible officials: The PSS Corrective Action Plan provides a detailed rationale for disagreement with the finding. Auditor response: Condition 1 – The finding does acknowledge that PSS reclassified the amount under ESF funds. Given the knowledge of the journal entry limitation, PSS failed to show evidence of effort to regularly reconcile the labor cost summary report with the general ledger. The condition remains. Condition 2 – Based on our understanding of PSS’ internal controls, timecards are required to be provided every pay period to support the payment of salaries and wages. The condition remains.
Finding No. 2022-003 Federal Agency: U.S. Department of Education Assistance Listing No. and Title: 84.027 Special Education – Grants to States (IDEA, Part B) Area: Allowable Costs/Cost Principles Questioned Costs: $0 Criteria: The Schedule of Expenditures of Federal Awards (SEFA) must be supported by underlying accounting and other records used in preparing the financial statements. 2 CFR 200.403(g) provides that costs must be adequately documented to be considered allowable under Federal awards. 2 CFR 200.430(i)(1)(i) requires 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: 1. For the year ended September 30, 2022, the total amount of payroll expense under ALN 84.027 determined from the journal entry details supporting the SEFA (or general ledger) was lower by $480,743 as compared to the total amount of payroll expense per labor cost summary (or subsidiary ledger). It was further noted that $404,198 out of this amount pertains to costs initially charged under the program but were reclassified to the Education Stabilization Fund (ESF) federal program through a general ledger entry only. No questioned costs are raised as the payroll costs that caused the variance were identified in detail. 2. For 3 (or 8%) of 40 transactions tested aggregating $61,202 out of $3,196,892 in total payroll expenditures, employee timecards were not provided. No questioned costs are raised as summary timesheets were provided. See Schedule of Findings and Questioned Costs for chart/table. Cause: PSS did not perform a reconciliation of the general ledger and subsidiary ledger for payroll costs. In addition, PSS failed to ensure that costs charged to the grant are adequately supported. Effect: PSS is in noncompliance with applicable allowable costs/cost principles requirements. Recommendation: PSS should implement a regular reconciliation of its labor cost summary report with the general ledger journal entries and ensure that any discrepancies are resolved or validly supported. Further, PSS should strengthen recordkeeping procedures so that documents are readily available to substantiate costs charged to the grant. Views of responsible officials: The PSS Corrective Action Plan provides a detailed rationale for disagreement with the finding. Auditor response: Condition 1 – The finding does acknowledge that PSS reclassified the amount under ESF funds. Given the knowledge of the journal entry limitation, PSS failed to show evidence of effort to regularly reconcile the labor cost summary report with the general ledger. The condition remains. Condition 2 – Based on our understanding of PSS’ internal controls, timecards are required to be provided every pay period to support the payment of salaries and wages. The condition remains.
Finding 2022-004 – Allowable costs – payroll Assistance Listing #: 93.243 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: During fiscal year 2022, the Organization charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: As noted above, fiscal year 2022 is the Organization’s first Single Audit and management was unaware that using budget estimates was not allowed without further reconciliation against actual time or effort activities. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: The Organization is now aware that utilization of budget estimates is not allowed for charging payroll and will utilize proper accounting treatment going forward.
Finding 2022-004 – Allowable costs – payroll Assistance Listing #: 93.243 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: During fiscal year 2022, the Organization charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: As noted above, fiscal year 2022 is the Organization’s first Single Audit and management was unaware that using budget estimates was not allowed without further reconciliation against actual time or effort activities. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: The Organization is now aware that utilization of budget estimates is not allowed for charging payroll and will utilize proper accounting treatment going forward.
Finding 2022-004 – Allowable costs – payroll Assistance Listing #: 93.243 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: During fiscal year 2022, the Organization charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: As noted above, fiscal year 2022 is the Organization’s first Single Audit and management was unaware that using budget estimates was not allowed without further reconciliation against actual time or effort activities. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: The Organization is now aware that utilization of budget estimates is not allowed for charging payroll and will utilize proper accounting treatment going forward.
Federal Agency: U.S. Department of Health and Human Services Program: Family Violence Prevention and Services/Discretionary Assistance Listing Number: 93.592 Major Program Compliance Requirement: Allowable Costs/Activities Allowed Criteria: In accordance with 200.430(i) in Subpart E of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), changes 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: Accurate and reliable records are necessary to meet ongoing financial reporting and operations needs and requirements. During our testing of the Organization’s compliance with Assistance Listing 93.592 Family Violence Prevention and Services/Discretionary, the Organization was unable to provide documentation that compensation rates were approved by management or the Board of Directors for all employees (5) selected for testing. Cause: The Organization did not consistently document in personnel records or elsewhere employee compensation or changes to employee compensation rates that were approved by management or the Board of Directors. Effect: The absence of approved employee compensation inhibits the Organization from complying with federal program requirements and the potential of disallowed costs and/or repayment to the federal agency. Recommendation: The Organization should retain all supporting documentation for reported expenditures.
Federal Agency: U.S. Department of Health and Human Services Program: Family Violence Prevention and Services/Discretionary Assistance Listing Number: 93.592 Major Program Compliance Requirement: Allowable Costs/Activities Allowed Criteria: In accordance with 200.430(i) in Subpart E of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), changes 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: Accurate and reliable records are necessary to meet ongoing financial reporting and operations needs and requirements. During our testing of the Organization’s compliance with Assistance Listing 93.592 Family Violence Prevention and Services/Discretionary, the Organization was unable to provide documentation that compensation rates were approved by management or the Board of Directors for all employees (5) selected for testing. Cause: The Organization did not consistently document in personnel records or elsewhere employee compensation or changes to employee compensation rates that were approved by management or the Board of Directors. Effect: The absence of approved employee compensation inhibits the Organization from complying with federal program requirements and the potential of disallowed costs and/or repayment to the federal agency. Recommendation: The Organization should retain all supporting documentation for reported expenditures.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-004—Allowable Costs/Cost Principles Federal program information: Funding agency: All Title: All ALN: All Award year and number: All Pass-through entity (if applicable): All Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity. Condition: Accurate and complete records to support payroll disbursements were not maintained for federal award programs. We specifically noted the following: • There is no documentation of an employee’s approved pay rate. • The Institute has not developed formal accounting or personnel policies and procedures that meet the requirements of federal statutes. Questioned Costs: Undeterminable Context: Six of six payroll disbursements tested were not adequately documented. Cause: The Institute was not aware of the Uniform Guidance requirements regarding allowable costs/cost principles (2 CFR Part 200.403), and compensation for personal services (2 CFR Part 200.430). Additionally, the Institute has not developed formal accounting or personnel policies. Effect: The Institute may not be able to demonstrate that costs charged to federal programs are allowable. Auditor’s Recommendations: The Institute should develop formal accounting and personnel policies and procedures that meet the requirements of the Uniform Guidance. Management’s Response: Management of the Institute did not provide any comments in response to this finding.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
2022-002—Unallowable Gift Card Disbursements Charged to Federal Program Type of Finding: (F) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – COVID-19: Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $15,300 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to both salaried employees and independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. The total value of the gift cards was approximately $15,300 and was charged to the COVID-19: Epidemiology and Laboratory Capacity grant (AL #93.231). For contractors, these gift cards were provided in addition to their regular compensation. The gift card disbursements were not processed through payroll nor formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR § 200.403, costs charged to federal awards must be necessary, reasonable, allocable, and conform to limitations set forth in federal regulations. Per 2 CFR § 200.421(e)(3), the cost of gifts—including cash or cash equivalents such as gift cards—is generally unallowable. Compensation for employees must comply with 2 CFR § 200.430, including support through written policies and documentation of time and effort. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of personnel during the COVID-19 public health response. However, they were unaware that the use of gift cards for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions. All compensation for employees should be processed through payroll, supported by appropriate documentation and internal policies. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award.
Allowable Activities and Costs for Provider Relief Fund Significant Deficiency in Internal Control Over Compliance Federal Assistance Listing Number: 93.498 COVID-19 – Provider Relief Fund (PRF) Criteria: Per 2 CFR 200.430 (i), personnel costs charged to federal grants are required to be supported by documentation including time records. Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Condition: Our audit procedures over payroll expenses charged to the PRF federal program disclosed timesheets that were not approved by management prior to payment. Cause: The Hospital has a policy requiring supervisory approval of timesheets. The absence of the proper approval for the timesheets tested appears to be a lack of management oversight. Effect: Unauthorized wages can result from undocumented reviews and approvals of timesheets. Questioned Costs: None Perspective: Seven timesheets in a sample of forty timesheets were not approved by management. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Hospital enforce their policy requiring supervisory review and approval for timesheets to ensure time recorded by employees’ is valid and accurate, and that the salaries and wages paid is for work performed. View of Responsible Officials: See management’s response to the finding in the accompanying Corrective Action Plan.
Finding Type: Noncompliance and material weakness in internal control over compliance (activities allowed or unallowed and allowable costs / cost principles). Program: Continuum of Care: Assistance Listing Number 14.267 Criteria: The Uniform Guidance (Title 2 CFR 200.430) requires that allocations for salaries must be based on records that reflect the work performed. Payroll records (timesheets) must be supported by internal controls that create the environment to ensure that payroll items are charged to activities that are accurate, allowable, and properly allocated. Any necessary adjustments to these items should be made so that the final amount charged to the activities is accurate, allowable, and properly allocated. Condition/Finding: Salaries and wages were allocated using percentages to distribute payroll costs allocated to grants. Costs were not consistently allocated to reflect the activity actually performed in five out of the six payroll cycles that we tested. Cause: The Organization did have a system of controls in place for the fiscal year ending September 30, 2022 requiring employees report time spent in specific areas on their timesheets. However, the control was overridden by management and was not applied on a consistent basis. There were payrolls tested where timesheet was not compared to payroll journals provided by the payroll service, the accounting records, or the reimbursement requests for grants. Effect: Payroll costs reflected in the books and records of the Organization did not agree to the payroll journals, timesheets, and reimbursement requests. This required the Organization to use spreadsheets and calculation to support grant funding requests. Some timesheets were found to be inaccurate, resulting in employee personnel costs being reimbursed without proper documentation. Questioned Costs: The total amount of payroll reimbursed without timecards documenting actual labor charges was $21,326 during the year ended September 30, 2022. Recommendation: We recommend that the Organization improve its financial management policies and procedures to ensure that multiple staff members are involved in the process of reviewing and allocating personnel expenses to grants. Policies and procedures over payroll should include employees entering time accurately across areas where they spent time, supervisory review, recalculation and approval of timesheets, review of timesheets and compiled time reporting before it is sent to the payroll provider and review of the reporting provided after the payroll run. Payroll postings input into the accounting system should accurately reflect time spent in each grant area (class) and grant reporting and reimbursement requests should be prepared using those numbers. View of Responsible Officials (Corrective Action): See corrective action plan.
Finding 2022-004 Program Affected Under the U.S. Department of Health and Human Services - Award Year October 1, 2021 - September 30, 2022: Assistance Listing 93.262 Occupational Safety and Health Program 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 During our program audit procedures related to the payroll cycle, we noted an internal control deficiency related to allocation of payroll costs among federally funded programs. Management did not perform sufficient review of payroll allocations to identify that some payroll expenses were being recorded in excess of readily available wage and time and effort data. We tested a nonstatistical sample of 13, totaling $100,952 from a population totaling $672,541. Cause and Effect The condition identified was caused by infrequent and periodic review of program-related payroll costs which were reconciled on a biannual basis. This process did not occur on a pay period basis. This resulted in an overstatement of program-related payroll expenses of $6,348. Questioned Costs $6,348 Identification as a Repeat Finding, if Applicable Not applicable. Recommendation We recommend the Organization strengthen controls surrounding program-related record keeping, including increasing the frequency of reconciliations and program wage allocation procedures to match the payroll cycle. Views of Responsible Officials and Corrective Action Plan Management agrees with the finding. See attached Corrective Action Plan.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i) outlines the standards for appropriate documentation of personnel expenses. The current standards require that charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed and are supported by a system of internal controls that provides reasonable assurance the charges are accurate, allowable and properly allocated. In addition, semiannual certifications of time and effort spent working on federal programs are required for employees working on a single cost objective or employees whose salary is supported by only one federal program to document the personnel expenses. During the testing of time and attendance records of employees paid from the Education Stabilization Fund, the following problems were noted: • Timesheet or payroll service reports for twelve of the fourteen employees tested were not approved by the appropriate Principal, Director or Supervisor, as applicable. • Documentation was not provided to support that five of the fourteen employees tested were paid in accordance with the approved salary or stipend schedules. • Time and effort reports were not provided for any of the fourteen employees tested to document personnel charges to the federal programs. The Dallas County Board of Education (the “Board”) did not have internal controls in place to ensure all timesheets were properly approved, employees were paid in accordance with approved salary schedules and semiannual certifications of time and effort spent working on the federal programs were properly completed. As a result, the Board is not in compliance with the Uniform Guidance documentation requirements for personnel services charged to the Education Stabilization Fund.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i) outlines the standards for appropriate documentation of personnel expenses. The current standards require that charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed and are supported by a system of internal controls that provides reasonable assurance the charges are accurate, allowable and properly allocated. In addition, semiannual certifications of time and effort spent working on federal programs are required for employees working on a single cost objective or employees whose salary is supported by only one federal program to document the personnel expenses. During the testing of time and attendance records of employees paid from the Title I Grants to Local Educational Agencies, the following problems were noted: • Timesheet or payroll service reports for twelve of the sixteen employees tested were not approved by the appropriate Principal, Director or Supervisor, as applicable. • Documentation was not provided to support that seven of the sixteen employees tested were paid in accordance with the approved salary or stipend schedules. • Time and effort reports were not provided for one of twelve employees tested to document personnel charges to the federal programs. The Dallas County Board of Education (the “Board”) did not have internal controls in place to ensure all timesheets were properly approved, employees were paid in accordance with approved salary schedules and semiannual certifications of time and effort spent working on the federal programs were properly completed. As a result, the Board is not in compliance with the Uniform Guidance documentation requirements for personnel services charged to the Title I Grants to Local Educational Agencies Program.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i) outlines the standards for appropriate documentation of personnel expenses. The current standards require that charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed and are supported by a system of internal controls that provides reasonable assurance the charges are accurate, allowable and properly allocated. In addition, semiannual certifications of time and effort spent working on federal programs are required for employees working on a single cost objective or employees whose salary is supported by only one federal program to document the personnel expenses. During the testing of time and attendance records of employees paid from the Title I Grants to Local Educational Agencies, the following problems were noted: • Timesheet or payroll service reports for twelve of the sixteen employees tested were not approved by the appropriate Principal, Director or Supervisor, as applicable. • Documentation was not provided to support that seven of the sixteen employees tested were paid in accordance with the approved salary or stipend schedules. • Time and effort reports were not provided for one of twelve employees tested to document personnel charges to the federal programs. The Dallas County Board of Education (the “Board”) did not have internal controls in place to ensure all timesheets were properly approved, employees were paid in accordance with approved salary schedules and semiannual certifications of time and effort spent working on the federal programs were properly completed. As a result, the Board is not in compliance with the Uniform Guidance documentation requirements for personnel services charged to the Title I Grants to Local Educational Agencies Program.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i) outlines the standards for appropriate documentation of personnel expenses. The current standards require that charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed and are supported by a system of internal controls that provides reasonable assurance the charges are accurate, allowable and properly allocated. In addition, semiannual certifications of time and effort spent working on federal programs are required for employees working on a single cost objective or employees whose salary is supported by only one federal program to document the personnel expenses. During the testing of time and attendance records of employees paid from the Title I Grants to Local Educational Agencies, the following problems were noted: • Timesheet or payroll service reports for twelve of the sixteen employees tested were not approved by the appropriate Principal, Director or Supervisor, as applicable. • Documentation was not provided to support that seven of the sixteen employees tested were paid in accordance with the approved salary or stipend schedules. • Time and effort reports were not provided for one of twelve employees tested to document personnel charges to the federal programs. The Dallas County Board of Education (the “Board”) did not have internal controls in place to ensure all timesheets were properly approved, employees were paid in accordance with approved salary schedules and semiannual certifications of time and effort spent working on the federal programs were properly completed. As a result, the Board is not in compliance with the Uniform Guidance documentation requirements for personnel services charged to the Title I Grants to Local Educational Agencies Program.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(i) outlines the standards for appropriate documentation of personnel expenses. The current standards require that charges to Federal awards for salaries and wages are based on records that accurately reflect the work performed and are supported by a system of internal controls that provides reasonable assurance the charges are accurate, allowable and properly allocated. In addition, semiannual certifications of time and effort spent working on federal programs are required for employees working on a single cost objective or employees whose salary is supported by only one federal program to document the personnel expenses. During the testing of time and attendance records of employees paid from the Title I Grants to Local Educational Agencies, the following problems were noted: • Timesheet or payroll service reports for twelve of the sixteen employees tested were not approved by the appropriate Principal, Director or Supervisor, as applicable. • Documentation was not provided to support that seven of the sixteen employees tested were paid in accordance with the approved salary or stipend schedules. • Time and effort reports were not provided for one of twelve employees tested to document personnel charges to the federal programs. The Dallas County Board of Education (the “Board”) did not have internal controls in place to ensure all timesheets were properly approved, employees were paid in accordance with approved salary schedules and semiannual certifications of time and effort spent working on the federal programs were properly completed. As a result, the Board is not in compliance with the Uniform Guidance documentation requirements for personnel services charged to the Title I Grants to Local Educational Agencies Program.
Criteria: 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 both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis; (v)Comply with the established accounting policies and practices of the non-Federal entity; (vi)Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Citation: 2 CFR 200.430(i) Condition: Electronic timesheets are maintained for all employees to document time spent on this grant as required by the funder; however, there was no evidence of supervisory review available within the timekeeping system for the period covering October 2021 through May 2022. For the period after May 2022 through August 31, 2022, the review was inconsistently documented. Cause: There was no evidence of the supervisory review to ensure salary expense was distributed to specific Federal awards for the period from October 2021 to May 2022. Effect: There is a risk that the salary of an employee could be distributed to a federal award at an amount that is different than the actual time spent on that Federal program. Context: We reviewed timesheets and noted the entity?s system of internal control was not designed to include a supervisors? review of the accuracy of timesheets to verify that an employees? time was distributed to the program that they spent time on from October 2021 to May 2022. Repeat Finding: Yes Recommendation: We recommend that all timesheets and other electronic records used to track time spent on the program be reviewed by a supervisor and that this review be documented.
Reference Number: 2022-001 Federal Agency: U.S. Environmental Protection Agency Federal Program: Water Pollution Control Assistance Listing Number: 66.419 Award Number and Year: I-98339417 (10/1/2021 ? 9/30/2022) Compliance Requirement: Allowable Cost/Cost Principles ? Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Noncompliance Criteria or specific requirement: Compliance: 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: 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 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; (v) Comply with the established accounting policies and practices of the non-Federal entity; (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. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Commission did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses applied to the federal program. Context: Forty payroll transactions were selected for testing and one of the transactions charged to the grant was not supported by a timesheet. The timesheet was also not approved by a supervisory or independent individual. Questioned costs: The amount charged to the grant for this transaction was $582. Cause: Controls were not operating effectively to ensure that payroll reporting was performed in a timely and accurate manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Recommendation: The Commission should reevaluate its current process and update internal controls related to time and effort reporting. Views of responsible officials: One of our employee?s timesheets was supposed to charge Account #500, but the incorrect formula was used and summed to Account #802 in December. This resulted in $582 difference between the two projects identified as a questioned cost above. By the end of 2022 fiscal year, however, we didn't overcharge project #802. ICPRB expended nearly $80,000 more on this project than was charged to the federal government so this oversight had no effect. This minor error resulted from the termination of our former Admin Director and the resignation of his temporary replacement. Our new Office Manager (hired on February 15, 2023) has assumed the responsibility of reviewing the timesheets so this will not be repeated. In addition, we have decided to block employees from adding accounts directly into their monthly timesheets without first including the account into the YTD portion of the timesheet software.
Item 2022-001 Written policies, procedures, and standards of conduct Water and Waste Disposal Systems for Rural Communities Assistance Listing Number 10.760 U.S. Department of Agriculture Grant period: Year ended September 30, 2022 Questioned Costs ? $0 Condition ? The Board does not have all of the written policies, procedures and standards of conduct required by UG. Criteria ? Grantees should have written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. 2 CFR 200, Subparts D & E requires the non-Federal entity to establish and maintain written policies, procedures, and standards of conduct including internal controls over the Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award. Specific requirements relate to the following: ? ? 200.302 Financial management ? ? 200.305 Payment ? ? 200.319 Competition ? ? 200.320 Methods of procurement to be followed ? ? 200.430 Compensation?personal services ? ? 200.431 Compensation?fringe benefits Cause of Condition ? The Board has failed to prepare written policies, procedures, and standards of conduct as required by 2 CFR 200, Subparts D & E of the Uniform Guidance. Potential Effect of Condition ? Lack of written policies, procedures, and standards of conduct could result in noncompliance related to federal awards. Recommendation ? We recommend that the Board implement the required written policies and procedures. Audit finding 2022-001 relates to prior year 2021-001 finding. Updated reference number to current audit year 2022.
2022-001: Controls over the payroll process should be enhanced. Type: Significant deficiency in internal control over compliance Assistance Listing Number, Federal Agency, Program Name, Program Title, Pass-through Grantor, and Pass-through Name and Grant Number: Assistance Listing #93.044, U.S. Department of Health and Human Services, Passed Through Area Agency on Aging, Special Programs for the Aging-Grants for Supportive Services and Senior Centers, Title III, Part B - Chore, 20-9046-C Criteria: Per 2CFR 200.430, personnel expenses that are charged to a federal program must, among other things, be based on records that accurately reflect the work performed. Condition: During our testing of payroll charged to the program, we noted differences between the personal activity reports and the amount charged to the program. Cause: The Council?s calculation of the allocation of wages to the program did not include essential pay or opt-out compensation as part of the hours worked. Context: Four (4) out of seven (7) personal activity reports tested for the Chore program differed from the amount charged to the program. Effect: No financial effect since the Council charges less than 100% of the eligible salaries, wages, and payroll taxes to the Chore program. Recommendation: The control process should be reviewed and modified appropriately so that control would be established to note any differences between the amounts being charged and personal activity reports.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(a)(2) outlines the requirements of allowable compensation specifically that the compensation follows an appointment made in accordance with the non-Federal entity's written policies. The Monroe County Board of Education's (the ?Board?) Policies and Procedures Manual states, "All compensation must be approved by the Board, regardless of the sources of funding."; "No employee is entitled to compensation except for work performed by the employee in accordance with an approved contract or applicable terms of appointment."; and "Compensation may be withheld pending the employee's timely, accurate, and complete submission of all required records, data, and reports." When reviewing the Education Stabilization Fund, 60 expenditures were randomly selected for testing, in addition to two judgmentally selected expenditures. During the test of expenditures, the following issues were noted: ? Twenty-five payments totaling $24,087.50 were made to personnel for after school tutoring services without proper Board approval. The Board did not provide contracts or other documentation of Board approval for personnel that received compensation for providing after school tutoring. Furthermore, the Board did not approve a specified rate of pay for these services. ? Five payments were made to independent contractors for which compensation did not agree with daily rates of pay specified in the independent contractor agreements. ? An administrative stipend of $1,230 was paid to an employee for serving as the Homeless Liaison Coordinator. Review of the Board minutes indicated that the Board did not approve the payment of the administrative stipend to the employee. A retroactive contract dated November 10, 2021, for Homeless Liaison Coordinator was located in the employee's personnel file, but it was not signed by the Superintendent. Additionally, the contract stated work was to be performed outside of the employee's normal work hours and time worked must be reflected on a sign-in sheet. No documentation was provided to substantiate the hours worked for the expenditure tested. ? Two payments were made to independent contractors for nursing services. Independent contractor agreements were on file for each nurse; however, the Board did not approve the independent contractor agreements in a Board meeting. Per the agreements, the independent contractors agreed to provide adequate documentation of work performed and times worked. The Board did not provide any documentation of work performed or hours worked for one of the independent contractors. Total compensation paid to these two independent contractors for nursing services totaled $159,147.84. ? A payment of $1,265.40 was made for temporary housing of homeless students. The Board did not provide any documentation that students were identified as homeless students or eligible to receive benefits under the Homeless Children and Youth grant. Controls were not in place to ensure personnel were properly compensated, contracts were properly approved, and appropriate records to support work performed were maintained. Additionally, payments were made for unallowable activities from the federal program . As a result, the Monroe County Board of Education expended $194,009.26 for personnel compensation and contract services that were not approved and/or substantiated by appropriate records and $1,265.40 for unallowable activities from the federal program. Recommendation The Monroe County Board of Education should implement controls to ensure all expenditures are allowable, compensation is approved, and appropriate records to support work performed are maintained.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(a)(2) outlines the requirements of allowable compensation specifically that the compensation follows an appointment made in accordance with the non-Federal entity's written policies. The Monroe County Board of Education's (the ?Board?) Policies and Procedures Manual states, "All compensation must be approved by the Board, regardless of the sources of funding."; "No employee is entitled to compensation except for work performed by the employee in accordance with an approved contract or applicable terms of appointment."; and "Compensation may be withheld pending the employee's timely, accurate, and complete submission of all required records, data, and reports." When reviewing the Education Stabilization Fund, 60 expenditures were randomly selected for testing, in addition to two judgmentally selected expenditures. During the test of expenditures, the following issues were noted: ? Twenty-five payments totaling $24,087.50 were made to personnel for after school tutoring services without proper Board approval. The Board did not provide contracts or other documentation of Board approval for personnel that received compensation for providing after school tutoring. Furthermore, the Board did not approve a specified rate of pay for these services. ? Five payments were made to independent contractors for which compensation did not agree with daily rates of pay specified in the independent contractor agreements. ? An administrative stipend of $1,230 was paid to an employee for serving as the Homeless Liaison Coordinator. Review of the Board minutes indicated that the Board did not approve the payment of the administrative stipend to the employee. A retroactive contract dated November 10, 2021, for Homeless Liaison Coordinator was located in the employee's personnel file, but it was not signed by the Superintendent. Additionally, the contract stated work was to be performed outside of the employee's normal work hours and time worked must be reflected on a sign-in sheet. No documentation was provided to substantiate the hours worked for the expenditure tested. ? Two payments were made to independent contractors for nursing services. Independent contractor agreements were on file for each nurse; however, the Board did not approve the independent contractor agreements in a Board meeting. Per the agreements, the independent contractors agreed to provide adequate documentation of work performed and times worked. The Board did not provide any documentation of work performed or hours worked for one of the independent contractors. Total compensation paid to these two independent contractors for nursing services totaled $159,147.84. ? A payment of $1,265.40 was made for temporary housing of homeless students. The Board did not provide any documentation that students were identified as homeless students or eligible to receive benefits under the Homeless Children and Youth grant. Controls were not in place to ensure personnel were properly compensated, contracts were properly approved, and appropriate records to support work performed were maintained. Additionally, payments were made for unallowable activities from the federal program . As a result, the Monroe County Board of Education expended $194,009.26 for personnel compensation and contract services that were not approved and/or substantiated by appropriate records and $1,265.40 for unallowable activities from the federal program. Recommendation The Monroe County Board of Education should implement controls to ensure all expenditures are allowable, compensation is approved, and appropriate records to support work performed are maintained.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(a)(2) outlines the requirements of allowable compensation specifically that the compensation follows an appointment made in accordance with the non-Federal entity's written policies. The Monroe County Board of Education's (the ?Board?) Policies and Procedures Manual states, "All compensation must be approved by the Board, regardless of the sources of funding."; "No employee is entitled to compensation except for work performed by the employee in accordance with an approved contract or applicable terms of appointment."; and "Compensation may be withheld pending the employee's timely, accurate, and complete submission of all required records, data, and reports." When reviewing the Education Stabilization Fund, 60 expenditures were randomly selected for testing, in addition to two judgmentally selected expenditures. During the test of expenditures, the following issues were noted: ? Twenty-five payments totaling $24,087.50 were made to personnel for after school tutoring services without proper Board approval. The Board did not provide contracts or other documentation of Board approval for personnel that received compensation for providing after school tutoring. Furthermore, the Board did not approve a specified rate of pay for these services. ? Five payments were made to independent contractors for which compensation did not agree with daily rates of pay specified in the independent contractor agreements. ? An administrative stipend of $1,230 was paid to an employee for serving as the Homeless Liaison Coordinator. Review of the Board minutes indicated that the Board did not approve the payment of the administrative stipend to the employee. A retroactive contract dated November 10, 2021, for Homeless Liaison Coordinator was located in the employee's personnel file, but it was not signed by the Superintendent. Additionally, the contract stated work was to be performed outside of the employee's normal work hours and time worked must be reflected on a sign-in sheet. No documentation was provided to substantiate the hours worked for the expenditure tested. ? Two payments were made to independent contractors for nursing services. Independent contractor agreements were on file for each nurse; however, the Board did not approve the independent contractor agreements in a Board meeting. Per the agreements, the independent contractors agreed to provide adequate documentation of work performed and times worked. The Board did not provide any documentation of work performed or hours worked for one of the independent contractors. Total compensation paid to these two independent contractors for nursing services totaled $159,147.84. ? A payment of $1,265.40 was made for temporary housing of homeless students. The Board did not provide any documentation that students were identified as homeless students or eligible to receive benefits under the Homeless Children and Youth grant. Controls were not in place to ensure personnel were properly compensated, contracts were properly approved, and appropriate records to support work performed were maintained. Additionally, payments were made for unallowable activities from the federal program . As a result, the Monroe County Board of Education expended $194,009.26 for personnel compensation and contract services that were not approved and/or substantiated by appropriate records and $1,265.40 for unallowable activities from the federal program. Recommendation The Monroe County Board of Education should implement controls to ensure all expenditures are allowable, compensation is approved, and appropriate records to support work performed are maintained.
Title 2 U. S. Code of Federal Regulations, Part 200, Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards (Uniform Guidance), 2 CFR 200.430(a)(2) outlines the requirements of allowable compensation specifically that the compensation follows an appointment made in accordance with the non-Federal entity's written policies. The Monroe County Board of Education's (the ?Board?) Policies and Procedures Manual states, "All compensation must be approved by the Board, regardless of the sources of funding."; "No employee is entitled to compensation except for work performed by the employee in accordance with an approved contract or applicable terms of appointment."; and "Compensation may be withheld pending the employee's timely, accurate, and complete submission of all required records, data, and reports." When reviewing the Education Stabilization Fund, 60 expenditures were randomly selected for testing, in addition to two judgmentally selected expenditures. During the test of expenditures, the following issues were noted: ? Twenty-five payments totaling $24,087.50 were made to personnel for after school tutoring services without proper Board approval. The Board did not provide contracts or other documentation of Board approval for personnel that received compensation for providing after school tutoring. Furthermore, the Board did not approve a specified rate of pay for these services. ? Five payments were made to independent contractors for which compensation did not agree with daily rates of pay specified in the independent contractor agreements. ? An administrative stipend of $1,230 was paid to an employee for serving as the Homeless Liaison Coordinator. Review of the Board minutes indicated that the Board did not approve the payment of the administrative stipend to the employee. A retroactive contract dated November 10, 2021, for Homeless Liaison Coordinator was located in the employee's personnel file, but it was not signed by the Superintendent. Additionally, the contract stated work was to be performed outside of the employee's normal work hours and time worked must be reflected on a sign-in sheet. No documentation was provided to substantiate the hours worked for the expenditure tested. ? Two payments were made to independent contractors for nursing services. Independent contractor agreements were on file for each nurse; however, the Board did not approve the independent contractor agreements in a Board meeting. Per the agreements, the independent contractors agreed to provide adequate documentation of work performed and times worked. The Board did not provide any documentation of work performed or hours worked for one of the independent contractors. Total compensation paid to these two independent contractors for nursing services totaled $159,147.84. ? A payment of $1,265.40 was made for temporary housing of homeless students. The Board did not provide any documentation that students were identified as homeless students or eligible to receive benefits under the Homeless Children and Youth grant. Controls were not in place to ensure personnel were properly compensated, contracts were properly approved, and appropriate records to support work performed were maintained. Additionally, payments were made for unallowable activities from the federal program . As a result, the Monroe County Board of Education expended $194,009.26 for personnel compensation and contract services that were not approved and/or substantiated by appropriate records and $1,265.40 for unallowable activities from the federal program. Recommendation The Monroe County Board of Education should implement controls to ensure all expenditures are allowable, compensation is approved, and appropriate records to support work performed are maintained.
Finding number: 2022-001 AL number: 14.231 AL title: Emergency Solutions Grants Program Federal award identification number and year: 32101372, 32101373, 32101371, 32101283, 32101297; 2022 Name of Federal agency: Department of Housing and Development Urban Name of pass-through entity: County of Marin Repeat finding: No Criteria: Per 2 CFR 200.430, "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed", and records must be "supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated". Furthermore, "budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards", and there must be an after-the-fact review to ensure payroll costs are accurately allocated. Condition: During our testing of payroll costs charged to the Federal award, we noted that from the start of the award period through June 2022 the Society allocated and charged payroll costs to the Federal award based on budget estimates and an after-the-fact review was not performed. This resulted in the Federal award not being charged for the actual costs incurred for the award. Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Management revised the process for allocating payroll costs in July 2022 to a methodology that reflects the actual time incurred. Cause: The Society previously had not administered Federal awards subject to the Uniform Guidance and therefore did not have a system of internal control in place that complies with the standards for documentation of personnel expenses required by the Uniform Guidance. Possible effect: The Society overbilled the Federal award by $115,889 over a two year period. Questioned cost: Management performed an analysis of the time incurred and charged to the Federal award and determined that the Society overbilled the Federal award $68,357 and $47,532 during the years ended September 30, 2022 and 2021, respectively. Recommendation: We recommend that the Society continue to follow the internal controls and procedures around payroll allocation that were implemented in July 2022. Management should continue to ensure that all payroll costs are allocated to Federal awards based on the actual time spent by each employee. Views of responsible officials: Management concurs with the finding and will continue to follow the revised methodology that was implemented in July 2022 for allocating payroll costs to Federal awards such that payroll costs charged to Federal awards
Criteria: The Code of Federal Regulations (CFR) Subpart E ? Cost Principles, ?200.430(i), allowable costs must be adequately documented. ?200.430(i)(1) states ?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?? Further, according to 29CFR ?516.5(b) records such as employment contracts or agreements must be retained by employers for at least three years from their last effective date. Condition: For 3 of 115 items tested, or 3% of the sample, we noted that the contract form was signed after the effective date of the renewal of employment. Cause: NMC staff who are responsible for monitoring contract form renewals did not review these personnel files in a timely manner. Effect: NMC did not comply with federal regulations requirements in which contract forms should be signed prior to renewal of employment. With this situation, the employee is working without properly documented approval from authorized personnel. Recommendation: NMC should ensure that human resources personnel adhere to the internal control policies and procedures relevant to renewal of employment. Ample time to process employment documents should be available to ensure that the required approvals are obtained prior to renewal of employment. Views of Responsible Officials See corrective action plan immediately following this schedule of findings and questioned costs.
Finding 2022-002: Allowable Costs/Cost Principles (Material Weakness and Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.231 - Emergency Solutions Grant Program Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? 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; and ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; 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. 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 award recipient?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time spent was used as a basis for allocating personnel charges to the grant. Questioned Costs: $166,148 (total employee salaries and wages charged to the program) Context: For our direct labor allowable costs sample, Army management indicated that all 10 expenditure selections totaling $12,871 were allocated to the program based on budgeted percentages. There was no evidence that a subsequent review of budget estimates was performed for all the selections. Cause: Current policies and procedures do not require documented timekeeping by employees working on the grant program, which is appropriately reviewed, approved and used as a basis for charges to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Repeat Finding: No. Recommendation: Policies and procedures should be implemented to ensure that employee timekeeping, as well as the salary and wage allocations to the grant, are appropriately documented and accurately reflect the work performed. Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management will enact processes outlined in our Corrective Action Plan to correct this deficiency in the future.
Finding 2022-002: Allowable Costs/Cost Principles (Material Weakness and Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.231 - Emergency Solutions Grant Program Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? 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; and ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; 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. 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 award recipient?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time spent was used as a basis for allocating personnel charges to the grant. Questioned Costs: $166,148 (total employee salaries and wages charged to the program) Context: For our direct labor allowable costs sample, Army management indicated that all 10 expenditure selections totaling $12,871 were allocated to the program based on budgeted percentages. There was no evidence that a subsequent review of budget estimates was performed for all the selections. Cause: Current policies and procedures do not require documented timekeeping by employees working on the grant program, which is appropriately reviewed, approved and used as a basis for charges to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Repeat Finding: No. Recommendation: Policies and procedures should be implemented to ensure that employee timekeeping, as well as the salary and wage allocations to the grant, are appropriately documented and accurately reflect the work performed. Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management will enact processes outlined in our Corrective Action Plan to correct this deficiency in the future.
Finding 2022-002: Allowable Costs/Cost Principles (Material Weakness and Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.231 - Emergency Solutions Grant Program Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? 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; and ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; 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. 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 award recipient?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time spent was used as a basis for allocating personnel charges to the grant. Questioned Costs: $166,148 (total employee salaries and wages charged to the program) Context: For our direct labor allowable costs sample, Army management indicated that all 10 expenditure selections totaling $12,871 were allocated to the program based on budgeted percentages. There was no evidence that a subsequent review of budget estimates was performed for all the selections. Cause: Current policies and procedures do not require documented timekeeping by employees working on the grant program, which is appropriately reviewed, approved and used as a basis for charges to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Repeat Finding: No. Recommendation: Policies and procedures should be implemented to ensure that employee timekeeping, as well as the salary and wage allocations to the grant, are appropriately documented and accurately reflect the work performed. Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management will enact processes outlined in our Corrective Action Plan to correct this deficiency in the future.
Finding 2022-002: Allowable Costs/Cost Principles (Material Weakness and Noncompliance) Federal Agency: Department of Housing and Urban Development Assistance Listing Number and Title: 14.231 - Emergency Solutions Grant Program Criteria: Per 2 CFR ?200.430, Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among other requirements, these records must: ? Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ? 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; and ? Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; 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. 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 award recipient?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates, and that all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: For this program, there was no evidence that actual employee time was tracked, reviewed and approved, or that the actual time spent was used as a basis for allocating personnel charges to the grant. Questioned Costs: $166,148 (total employee salaries and wages charged to the program) Context: For our direct labor allowable costs sample, Army management indicated that all 10 expenditure selections totaling $12,871 were allocated to the program based on budgeted percentages. There was no evidence that a subsequent review of budget estimates was performed for all the selections. Cause: Current policies and procedures do not require documented timekeeping by employees working on the grant program, which is appropriately reviewed, approved and used as a basis for charges to the grant. Effect: Personnel costs charged to federal awards without appropriate documentation may be subject to disallowance. Repeat Finding: No. Recommendation: Policies and procedures should be implemented to ensure that employee timekeeping, as well as the salary and wage allocations to the grant, are appropriately documented and accurately reflect the work performed. Views of Responsible Officials: Management notes the details of this finding and the resulting material weakness. Management will enact processes outlined in our Corrective Action Plan to correct this deficiency in the future.