Finding Number: 2022-052 Prior Year Finding Number: 2021-046 Compliance Requirement: Allowable Costs/Cost Principles – Payroll Activities Program: U.S. Department of Education COVID-19 - Education Stabilization Fund State Educational Agency (Outlying Areas) (ESF-SEA) ALN: 84.425A Award #: S425A200004, S425A210004 Award Period: 06/22/2020 - 09/30/2022 01/13/2021 - 09/30/2023 COVID-19 - Education Stabilization Fund Governors (Outlying Areas) (ESF-Governor) ALN: 84.425H Award #: S425H200003, S425H210003 Award Period: 06/29/2020 - 09/30/2022 01/13/2021 - 09/30/2023 COVID-19 – American Rescue Plan - Outlying Areas State Educational Agency (ARP-OA SEA) ALN: 84.425X Award #: S425X210004 Award Period: 04/08/2021 – 09/30/2024 Government Department/Agency: Department of Education (VIDE) Office of Management and Budget (OMB) 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. Additionally, salaries and wages charged to Federal awards are subject to the standards of documentation as described by 2 CFR Section 200.430(i) and must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records: • Reasonable reflect the total activity for which the employee is compensated across all grant-related and non-grant related activities (100% effort); and • Support the distribution of employee salary across multiple activities or cost objectives. Condition – For ALN 84.425A, we sampled and selected 60 out of 2,319 payroll expenditures and noted 4 timesheets were not available for review. Further, it does not appear that the controls in place are operating at a level of precision to ensure compliance with the activities allowed or unallowed and allowable costs/cost principles compliance requirements. Questioned Costs – Not determinable. Context – This is a condition identified per review of VIDE’s compliance with the specified requirements using a statistically valid sample. The total payroll expenditures charged to program in fiscal year 2022 is $3,138,454. Total amount sampled is $98,332. The known amount of the exceptions if $7,968. Effect – Failure to properly review and support expenditures can result in noncompliance with laws and regulations along with loss of funding. Cause – VIDE does not appear to have adequate policies and procedures in place to ensure compliance with applicable cost principles and maintenance of underlying documentation. Recommendation – We recommend that VIDE improve internal controls to ensure adherence to Federal regulations related to the fiscal and administrative requirements for expending and accounting for payroll expenditures. Where employees work on multiple activities or cost objectives, a distribution of salaries or wages should be supported by personnel activity reports (time and attendance) or equivalent documents. Such information should also be monitored, retained, and approved by a responsible official of VIDE in a timely manner. Views of Responsible Officials - The Government concurs with the auditor’s findings and recommendations. VIDE is addressing audit findings related to payroll activities by enhancing internal controls to ensure compliance with federal regulations. Key measures include improving timesheet management through electronic submission, mandatory supervisor review, and secure storage. Additionally, VIDE will strengthen rate verification processes with a standardized checklist for comparing NOPA rates with payroll system rates, requiring payroll staff to complete it at each pay cycle and maintain a discrepancy tracker. Mandatory training sessions will be conducted for employees and supervisors to ensure understanding of the new policies, covering timesheet completion, rate verification, and adherence to guidelines. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-056 Prior Year Finding Number: N/A Compliance Requirement: Allowable Costs/Cost Principles – Payroll Activities Program: U.S. Department of Health and Human Services Epidemiology and Laboratory Capacity for Infectious Disease ALN: 93.323 Award #: NU50CK000507 Award Year: 08/01/19 – 07/31/24 Government Department/Agency: Department of Health (DOH) Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Control Section (a), requires the non-federal entities receiving Federal awards (1.e., auditee management) establish and maintain internal control designed to reasonable ensure compliance with Federal statutes, regulations, and other terms and conditions of the Federal Award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principle process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Additionally, salaries and wages charged to Federal awards are subject to the standards of documentation as described by 2 CFR Section 200.430(i) and must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records; • Reasonably reflect the total activity for which the employee is compensated across all grant-related and non-grant related activities (100%); and • Support the distribution of employee salary across multiple activities or cost objectives. Condition – DOH was unable to reconcile the payroll expense include in the SEFA ($2,025,690) with the payroll expense in the payroll register ($1,909,128). As a result, the auditor was not able to establish the completeness of the population and was unable to perform testing procedures. Questioned Costs – None. Context – This is a condition identified per review of DOH’s compliance with the specified requirements. Cause – DOH does not appear to have adequate policies and procedures in place to review and reconcile program expenditures. Effect – Lack of proper reconciling information can result in noncompliance with laws and regulation along with loss of funding. Recommendation – We recommend that DOH improve internal controls to ensure program data is reconciled, monitored and retained in order to facilitate adherence to federal regulations and compliance requirements. Views of Responsible Official - The Government concurs with the auditor’s findings and recommendations. DOH acknowledges the auditor's finding regarding the inability to reconcile payroll expenses in the SEFA with the payroll register due to untimely payroll adjustments. To address this, DOH is training its team and ensuring staff have access to make necessary adjustments in the Government Financial Management System starting FY2024. Moving forward, DOH will enhance its SOPs by holding monthly reconciliation meetings with relevant program teams for timely adjustments and continuous monitoring. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
Finding Number: 2022-063 Prior Year Finding Number: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Payroll Activities Program: U.S. Department of Health and Human Services CCDF Cluster ALN: 93.575, 93.489 Award #: Various Award Period: Various Government Department/Agency: Department of Human Services (DHS) Criteria – The Uniform Guidance in 2 CFR Section 200.303, Internal Controls, requires the non-federal entities receiving Federal awards (1.e., auditee management) establish and maintain internal control designed to reasonable ensure compliance with Federal statutes, regulations, and other terms and conditions of the Federal Award. Management is responsible for establishing and maintaining a system of internal control that should include controls over its activities allowed or unallowed, allowable cost/cost principal process. CFR 200.403(g) states that for costs to be allowed under federal awards, they must be adequately documented. Additionally, salaries and wages charged to Federal awards are subject to the standards of documentation as described by 2 CFR Section 200.430(i) and must be based on records that accurately reflect the work performed. These records must: • Be incorporated into the organization’s official records. • Reasonably reflect the total activity for which the employee is compensated across all grant-related and non-grant related activities (100%); and • Support the distribution of employee salary across multiple activities or cost objectives. Condition – We sampled and selected 67 out of 302 payroll transactions and in all instances found that DHS did not consistently apply funding allocation in accordance with the Notice of Personnel Action (NOPA). We found the project code approved on the NOPA did not agree to the project code used on the payroll register. However, in all instances we found the employee’s actual time and effort was appropriately charged to the CCDF program. Thus, internal controls were not operating at a level of precision to ensure compliance with the allowable costs compliance requirement. Questioned Costs – None. Context – This is a condition identified per review of DHS’s compliance with the specified requirements using a statistically valid sample. The total amount of payroll expenditures charged to the program were $820,305. Total amount sampled was $202,805. Effect – Failure to properly update an employee’s NOPA can result time and effort charged to the incorrect project code resulting in noncompliance with laws and regulations along with loss of funding. Cause – DHS does not appear to have adequate policies and procedures in place to ensure compliance with applicable cost principles. Recommendation – We recommend that DHS improve internal controls to ensure adherence to Federal regulations related to the fiscal and administrative requirements for expending and accounting for payroll expenditures. Views of Responsible Officials – The Government concurs with the auditor’s findings and recommendations. The Division of Human Resources is updating the Notice of Personnel Actions to include the necessary Project code at the start of each fiscal year. The planned corrective actions are presented in the Government’s Corrective Action Plan attached as Appendix B to the Single Audit Report.
ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: During our review of payroll related transactions, 2 of the 25 payroll samples tested did not have review and approval of the Supervisor on the timecard. Criteria: 2 CFR section 200.303 – Internal Controls of the Uniform Guidance states that the nonfederal entity must: (a) Establish and maintain effective internal controls over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Effect: The Entity may unintentionally under/over compensate what is applicable for the work performed by that employee. This could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify that documentation was maintained to indicate the employees’ time paid under the federal grant. Questioned Costs: No questioned costs identified.
ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: During our review of payroll related transactions, 2 of the 25 payroll samples tested did not have review and approval of the Supervisor on the timecard. Criteria: 2 CFR section 200.303 – Internal Controls of the Uniform Guidance states that the nonfederal entity must: (a) Establish and maintain effective internal controls over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Effect: The Entity may unintentionally under/over compensate what is applicable for the work performed by that employee. This could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify that documentation was maintained to indicate the employees’ time paid under the federal grant. Questioned Costs: No questioned costs identified.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
2022-018 Activities Allowed or Unallowed, Allowable Costs/ Cost Principles - Payroll Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund (DWSRF) Cluster ALN: 66.468, 66.483 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 582-22-30745 9/1/2021 ? 8/31/2022 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.430 (i-vii), the Texas Commission on Environmental Quality must ensure 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 federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; and (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. Condition: During our testing, we selected 40 payroll-related expenditures incurred during the fiscal year totaling $134,012 to validate allowability and proper documentation of time and effort. We noted that for three out of the 40 samples, wages charged to the federal program were overstated by $27. Questioned costs: $27 Context: See ?Condition.? Cause: Hours incorrectly charged to the grant are a result of system and manual errors when allocating time to federal grants. Effect: Unallowable costs charged to the grant will result in noncompliance with the grant terms and questioned costs. Repeat Finding: No Recommendation: TCEQ should strengthen its controls related to review of payroll expenditures for compliance with federal time and effort requirements to ensure unallowed costs are not charged to the grant. Views of responsible officials: Federally funded and site-specific employees are required to record their time accurately and to charge to grants correctly. Supervisors are required to implement the quality control measures necessary to ensure that salaries and wages are based on records that accurately reflect the work performed.
ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: During our review of payroll related transactions, 2 of the 25 payroll samples tested did not have review and approval of the Supervisor on the timecard. Criteria: 2 CFR section 200.303 – Internal Controls of the Uniform Guidance states that the nonfederal entity must: (a) Establish and maintain effective internal controls over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Effect: The Entity may unintentionally under/over compensate what is applicable for the work performed by that employee. This could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify that documentation was maintained to indicate the employees’ time paid under the federal grant. Questioned Costs: No questioned costs identified.
ALN: 84.126 Federal Award Title: Rehabilitation Services Vocational Rehabilitation Grants to States Federal Agency: United States Department of Education Pass-Through Entity: Texas Health and Human Services Commission Award Number(s): HHS000186000005, HHS000202900008 Federal Award Year: 2022 Condition: During our review of payroll related transactions, 2 of the 25 payroll samples tested did not have review and approval of the Supervisor on the timecard. Criteria: 2 CFR section 200.303 – Internal Controls of the Uniform Guidance states that the nonfederal entity must: (a) Establish and maintain effective internal controls over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR section 200.430 – Compensation – personal services, paragraph (i) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Effect: The Entity may unintentionally under/over compensate what is applicable for the work performed by that employee. This could lead to questioned costs and repayment of funds to the Grantor agency. Cause: The Entity does not have proper controls in place to verify that documentation was maintained to indicate the employees’ time paid under the federal grant. Questioned Costs: No questioned costs identified.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
Significant Deficiency CFDA No.: 16.575 Program Title: Crime Victim Assistance Federal Award No.: 2020-V2-GX-004 and 2019-V2-GX-0011 Federal Award Year: September 30, 2021 Name of Pass-through Entity: Texas Office of the Governor ? Criminal Justice Division (CJD) and Children?s Advocacy Centers of Texas, Inc. (CACTX) Name of Federal Agency: U.S. Department of Justice 2022-001 Allowable Costs Criteria 2 CFR 200.430(i)(1)(i) states, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? In addition, state and federal grant standards require that the method used to allocate a cost should be reasonable and measurable means of distributing the cost to those funding sources, and consistently applied for the type of cost. Condition During the audit, we noted two instances in which salaries and wages charged to the grant did not agree to time allocated on timesheets. In addition, we noted multiple variances in indirect costs charged to the grant because of misapplication of the Organization?s cost allocation plan. The total extrapolated difference amounted to less than 1% of total expenditures for this grant. Questioned Cost $0 Context This does not appear to be an isolated instance. Cause Coding of timesheets in accounting software was not reviewed prior to preparation of requests for reimbursement. In addition, the Organization did not update and apply its cost allocation plan correctly on a monthly basis. Effect The Organization had multiple variances in salaries and indirect costs. Recurrence This is a repeat finding. Recommendation The Organization should review timesheets before coding salaries and wages in QuickBooks and preparing requests for reimbursement. In addition, the Organization should be updating its FTE calculation for its cost allocation plan and certifying it monthly to determine monthly grant expenditures. Views of Responsible Officials The Henderson County HELP Center, Inc. (the Organization) will ensure each employee timesheet is reviewed and approved monthly prior to payroll being paid. The Organization will also ensure the cost allocation plan based on full-time equivalents (FTE) is reviewed and certified monthly prior to preparation of requests for reimbursement.
2022-018 Activities Allowed or Unallowed, Allowable Costs/ Cost Principles - Payroll Federal Agency: Environmental Protection Agency Federal Program Title: Drinking Water State Revolving Fund (DWSRF) Cluster ALN: 66.468, 66.483 Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Number and Period: 582-22-30745 9/1/2021 ? 8/31/2022 Statistically Valid Sample: No, and not intended to be a statistically valid sample Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance Criteria or specific requirement: Per 2 CFR 200.430 (i-vii), the Texas Commission on Environmental Quality must ensure 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 federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) comply with the established accounting policies and practices of the non-Federal entity; and (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. Condition: During our testing, we selected 40 payroll-related expenditures incurred during the fiscal year totaling $134,012 to validate allowability and proper documentation of time and effort. We noted that for three out of the 40 samples, wages charged to the federal program were overstated by $27. Questioned costs: $27 Context: See ?Condition.? Cause: Hours incorrectly charged to the grant are a result of system and manual errors when allocating time to federal grants. Effect: Unallowable costs charged to the grant will result in noncompliance with the grant terms and questioned costs. Repeat Finding: No Recommendation: TCEQ should strengthen its controls related to review of payroll expenditures for compliance with federal time and effort requirements to ensure unallowed costs are not charged to the grant. Views of responsible officials: Federally funded and site-specific employees are required to record their time accurately and to charge to grants correctly. Supervisors are required to implement the quality control measures necessary to ensure that salaries and wages are based on records that accurately reflect the work performed.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Finding 2022-002: Allowable Costs/Cost Principles - Time and Effort Reporting (Repeat Observation) Federal program information: U.S. Department of Health and Human Services, CFDA Number 93.600, Head Start Program and Early Head Start Child Care Partnership/Babies Step Forward; U.S. Department of Health and Human Services, CFDA Number 93.569/93.558, 477 Cluster; U.S. Department of Health and Human Services, CFDA Number 93.568, Low-Income Energy Assistance; U.S. Department of Health and Human Services, CFDA Number 93.575, CCDF Cluster; U.S. Department of Energy, CFDA Number 81.042, Weatherization Services for Low- Income Persons Criteria: The Code of Federal Regulations Section 200.430 (2 CFR 200.430) requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined prior to services being performed by personnel may be used for interim accounting processes, but the organization’s internal controls must include a process to review these charges after services have been performed to make any necessary adjustments to ensure that final amounts charged to federal awards are accurate, allowable and properly allocated. Budget estimates alone do not qualify as support for charges to federal awards. Charges for salaries and wages must be supported by documentation that is incorporated into the official records of the organization. Condition: For the year ended July 31, 2022, WestCOP and Affiliates used status change forms to document an estimation of the distribution of employees’ salaries and wages among specific programs. Management’s process is to complete a status change form for an employee upon hire and then modify the form when there is a significant change in an employee’s duties impacting the allocation of time and effort among programs. The accounting department uses the distribution documented in the status change form to determine how to charge an employee’s compensation to programs and federal awards. While management has communicated to the auditors that regular reviews of actual personnel time and effort were performed during the year ended July 31, 2022, there is no formal documentation of this review process. Questioned Costs: Not determinable. Context: For all major programs tested, management did not provide documentation of its review of actual personnel time and effort after employee services were provided, such as personnel time reports or any other documented analysis of how personnel actually spent their time versus the estimates. Personnel costs represent a significant component of the total cost charged to the three major programs for the year ended July 31, 2022. We tested 40 individual charges of salaries and wages for each of the major federal award programs. We were able to recalculate the charges based on the estimated distributions per employee status change forms. Several selected employees for each program also spend 100% of their time on the programs, so allocations are not applicable. Effect: WestCOP and Affiliates were unable to demonstrate that personnel costs charged to the major federal award programs reflected actual time incurred on the programs that were properly supported in compliance with the time and effort reporting requirements described in 2 CFR 200.430. Cause: Management does not have a formal, documented process to review actual personnel time and effort after employee services are performed to ensure that charges to federal awards based on estimates are accurate. Charges to federal awards are based on estimates documented in personnel status change forms prior to services being performed. While these forms may be updated periodically to reflect changes in estimates of personnel time and effort, the updates are not supported by any documented analysis of actual time and effort. Recommendation: Management can continue using the estimates of the distribution of employees’ time per status change forms for interim accounting processes. However, we recommend that management formally document a process to periodically review the actual distribution of employee time and effort among federally-funded programs. Management can determine the frequency of this documentation, but we recommend that such review be formally documented at least monthly. Documentation could be in the form of personnel time and effort reports reflecting the distribution of actual time among programs prepared by employees and reviewed by direct supervisors. Alternatively, management personnel familiar with employees’ activities, such as direct supervisors, could prepare periodic analyses of the distribution of employee time and effort to support allocations and charges of salaries and wages to federal awards. Views of responsible officials and planned corrective actions: For employees who are paid in full or in part with federal and other funds, management will increase the frequency of the time and effort reporting to quarterly intervals. Specifically, employees will document their time and effort based on funding sources for each payroll period; and at the end each quarter, management will review and compare the actual time and effort percentages with the current ADP Labor Distribution Report for reasonableness. The Management review report will be used as a basis to effect changes to the labor distribution report using the employee status change forms. The time and effort documentation will be available for audit. The implementation of the Corrective Action Plan did not commence until FY23 because the auditor’s field work for fiscal year 2021 ended after the close of fiscal year 2022.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and 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 for the year ended June 30, 2022, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $46,460 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $46,460. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
2022-004 – Internal Control Over Compliance and Compliance - Activities Allowed or Unallowed and Allowable Costs/Cost Principles Program- U.S. Department of Energy, Environmental Monitoring/Cleanup, Cultural and Resource Management Emergency Response Research, Outreach, Technical Analysis ALN: 81.214, Award #: DE-EM0005173, Award Year: 04/23/2018 – 06/30/2023 Program- U.S. Department of Health and Human Services, Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health ALN: 93.421, Award #: Various, Award Year: 08/01/2018 – 07/31/2023 Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.430 Compensation – Personal Services: “Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the establish written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable.” 2 CFR Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (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; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During our payroll disbursement testing for major program ALN 81.214, we noted that for one (1) out of eight (8) samples for testing, there was no proper review on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. During our payroll disbursement testing for major program ALN 93.421, forty (40) samples were selected for testing. We noted the following: • For two (2) samples, the project codes used to record the payroll expense in the general ledger were not the same as the project codes entered by the employees in the timesheets. • For one (1) sample, the project code used to record the payroll expense in the general ledger was not found in the timesheet. • For one (1) sample, the hours used to record payroll expense in the general ledger did not agree with the hours entered by the employee in the timesheet. • For one (1) sample, there were two different salary rates used for regular hours worked by the employee. • For six (6) samples, there was no proper review process on the calculation of compensated absences and fringe benefits. In particular, the expense calculation was prepared, reviewed and approved by only one individual, the CFO. Questioned Costs – Not determinable. Context – This is a condition identified per review of NGA Center’s compliance with specified requirements using a statistically valid sample. Cause – NGA Center is not adhering to the internal control policies and procedures to ensure that payroll costs are in accordance with the time and effort reporting requirements. NGA Center does not have procedures in place to ensure adequate documentation that the hours entered in the timesheet are correctly charged to the project codes. Effect – NGA Center was unable to provide documentation to demonstrate that the payroll expenditures charged to the programs accurately reflected the actual time incurred on the programs and whether they were properly supported in accordance with 2 CFR Part 200.430 Compensation-personal service.These errors resulted in incorrect amounts charged to the Federal programs. Repeat Finding – This is not a repeat finding. Recommendation – We recommend that NGA Center improve internal controls over the review of timesheets and hours charged to the grants, including the maintenance of adequate records and documentation. In addition, we recommend improvement on the preparation and review of compensated absences and fringe benefits. The preparation and review should be performed by different individuals to reduce the risk of both erroneous and inappropriate actions. Views of Responsible Officials – NGA Center agrees with the finding and recommendations of this finding set forth within and has developed a corrective action plan to address the lapse in the prescribed internal controls.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it 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, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding l 00% of compensated activities, and ( 4) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a Federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted four employees who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $271,029 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
2022-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in unallowable costs. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $11,649 for FALN 14.231 Likely Questioned Costs: $76,266 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: No Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2022-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in unallowable costs. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $11,649 for FALN 14.231 Likely Questioned Costs: $76,266 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: No Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2022-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in unallowable costs. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $11,649 for FALN 14.231 Likely Questioned Costs: $76,266 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: No Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.
2022-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness) Federal Program Information: Funding Agency: U.S. Department of Agriculture FALN: 10.561 Federal Award Identification Numbers: 42700-040-0000104184 Pass Through Entity: State of Georgia Department of Human Services Award Year: 2021-2022 Federal Program Information: Funding Agency: U.S. Department of Housing and Urban Development FALN: 14.231 Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards. Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County Award Year: 2021-2022 Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner. Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards. Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in unallowable costs. Cause: The Association was not aware of the requirements to maintain this documentation. Known Questioned Costs: $11,649 for FALN 14.231 Likely Questioned Costs: $76,266 for FALN 14.231 Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement. Repeat Finding: No Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.