2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
2022-008 Education Stabilization Fund (ALN 84.425), Federal Department of Education Child Care and Development Block Grant (ALN 93.575, 92.596), Federal Department of Health and Human Services Passed through the California Department of Equation Noncompliance and material weakness in internal control over Federal compliance Code 40000, 50000 Compliance Requirements Affected: Activities (A) and Costs (B) Criteria The Uniform Guidance 2 CFR section 200.430 specifies the standards for documenting salaries and wages charged to federal programs. 2 CFR section 200.200 stipulates the standards for documenting that direct charges to federal awards are for allowable costs. Condition The District did not provide supporting documentation for all the samples requested to support the audit. Cause We believe the cause is the turnover of District personnel, leaving no single responsible person with sufficient accountability to ensure full compliance. Effect The District was unable to support that it complied with the terms and conditions of Federal grant agreements. Questioned Costs Known and likely questioned costs by program are as follows: ALN Known Likely 84.425 $97,810 $48,365,738 93.575, 92.596 $39,372 $6,711,381 Context Audit samples of which no documentation was provided are considered deviations. The following table shows the number of deviations with the audit sample per program: ALN Sample Size Number of Deviations 84.425 68 31 93.575, 92.596 47 28 Recommendation We recommend that the District assigns a single person responsible for ensuring compliance and providing supporting documentation to the auditors. Views of Responsible Official The District has not prepared a response as of the date of this report. Identification as a Repeat Finding This finding was not reported in the previous year's audit.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
FINDING 2022-003 Subject: Special Education Cluster ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Programs: Special Education Grants to States, Special Education_Preschool Grants Assistance Listing Number: 84.027, 84.173 Federal Award Numbers and Years (or Other Identifying Numbers): FY21, FY22 Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness Section III ? Federal Award Findings and Questioned Costs (continued) FINDING 2022-003 (continued) Criteria: 2 CFR 200.303 states in part: ?The non-federal Entity must: (b) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the 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)?.? 2 CFR 200.303 states in part: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:? (g) Be adequately documented?? 2 CFR 200.430(i) states in part: ?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 (for IHE, this per the IHE?s definition of IBS); ? (iv) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; 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: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Cause: The School Corporation?s management had not developed a system of internal controls that would have ensured compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Effect: The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements could have resulted in the loss of federal funds to the School Corporation. Questioned Costs: There were no questioned costs identified. Context: The School Corporation is a member of a joint service cooperative (Cooperative). The Cooperative operated the special education programs on behalf of the School Corporation and managed the special education grant funds. Because the grant agreements were between the Indiana Department of Education and the School Corporation, the School Corporation was ultimately responsible for compliance with the grant agreement and the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. During fiscal year 2021, the School Corporation paid membership fees to the Cooperative out of federal Special Education funds. These membership fees made up approximately 48% of the total federal expenditures reimbursed during fiscal year 2021. The Cooperative accounted for state, local, and federal funds in a single fund. The fund did not separately account for each of the funding sources. This made it difficult to identify which expenditures were from federal funds, or to identify expenditures by federal program, award number, or years. Therefore, we could not test compliance for approximately 48% of the expenditures. The lack of internal controls and noncompliance were systemic issues, which occurred specifically during fiscal year 2021. No reportable findings were noted for fiscal year 2022. During fiscal year 2022, the School Corporation started paying membership fees to the Cooperative out of the General Education fund instead of the Special Education funds. All sampled expenditures paid from Special Education funds and requested for reimbursement were determined to be allowable under the Activities Allowed or Unallowed and Allowable Costs/Cost Principles compliance requirements. Identification as a repeat finding, if applicable: Yes, see Finding 2020-001. Recommendation: As recommended, management implemented internal control procedures for the year ended June 30, 2022. Views of Responsible Officials: Management agrees with this finding and has implemented their corrective action plan.
Criteria: The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, or standards of conduct as described in the following sections: Financial management (2 CFR 200.302) Payment (2 CFR 200.305) General procurement standards (2 CFR 200.318) Competition (2 CFR 200.319) Methods of procurement to be followed (2 CFR 200.320) Compensation ? personal services (2 CFR 200.430) Compensation ? fringe benefits (2 CFR 200.431) Transportation costs (2 CFR 200.474) Condition: The Town did not have written policies, procedures, and standards of conduct relative to federal awards as required by the Uniform Guidance. Cause: The Town was not aware of these requirements. Effect: The Town is not in compliance with the Uniform Guidance with respect to these written policies. Recommendation: We recommend that the Town update its policies and procedures to comply with the Uniform Guidance requirements mentioned above. Management?s Response: We agree that our existing policies do not explicitly address federal award compliance requirements. We will be updating the Town?s procedures and policies to incorporate the requirements of Part 200 of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.
Information on Federal Program(s) - U.S. Department of Agriculture Passed through Florida Department of Health CFDA Number: 10.558 CFDA Name: Child and Adult Care Food Program Criteria ? The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. Condition ? During our testing of payroll disbursements, we noted that one of the 25 payroll expenditures selected for testing did not have a properly approved personnel action form documenting the employee?s pay rate. Cause - Policies and procedures were not appropriately adhered to in this instance to ensure a properly approved personnel action form was maintained to evidence this cost was allowable and that an appropriate level of review and approval was completed prior to charging this cost to a federal program. Effect or Potential Effect - We were unable to confirm the accuracy or completeness of the expense claimed as a federal expenditure. Questioned Costs - There are no questioned costs as the disbursement amount is under the threshold. Context ? We tested a sample of 25 payroll expense items and found one exception. The expense consisted of $262 in gross employee wages charged to the federal program for which properly approved supporting documentation for the employee?s pay rate was not available. Total expense charged to the federal program for this employee was $5,948. This is a condition identified per review of the Organization?s controls over compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that the Organization review its controls over payroll disbursements to ensure that all employees have a personnel action form to document approved pay rates. Views of Responsible Officials ? Management was aware of the Organization?s manual process to approve and store physical copies of pay rate approval, which placed the Organization at risk of losing proper documentation especially when Management experienced high turnover in Human Resource Department. Beginning in September 2022, the Organization has modified this process to allow managers to virtually approve and store digital copies of pay rate documentation.
Information on Federal Program(s) - U.S. Department of Agriculture Passed through Florida Department of Health CFDA Number: 10.558 CFDA Name: Child and Adult Care Food Program Criteria ? The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under Federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable. Condition ? During our testing of payroll disbursements, we noted that one of the 25 payroll expenditures selected for testing did not have a properly approved personnel action form documenting the employee?s pay rate. Cause - Policies and procedures were not appropriately adhered to in this instance to ensure a properly approved personnel action form was maintained to evidence this cost was allowable and that an appropriate level of review and approval was completed prior to charging this cost to a federal program. Effect or Potential Effect - We were unable to confirm the accuracy or completeness of the expense claimed as a federal expenditure. Questioned Costs - There are no questioned costs as the disbursement amount is under the threshold. Context ? We tested a sample of 25 payroll expense items and found one exception. The expense consisted of $262 in gross employee wages charged to the federal program for which properly approved supporting documentation for the employee?s pay rate was not available. Total expense charged to the federal program for this employee was $5,948. This is a condition identified per review of the Organization?s controls over compliance with specified requirements using a statistically valid sample. Recommendation - We recommend that the Organization review its controls over payroll disbursements to ensure that all employees have a personnel action form to document approved pay rates. Views of Responsible Officials ? Management was aware of the Organization?s manual process to approve and store physical copies of pay rate approval, which placed the Organization at risk of losing proper documentation especially when Management experienced high turnover in Human Resource Department. Beginning in September 2022, the Organization has modified this process to allow managers to virtually approve and store digital copies of pay rate documentation.
FINDING 2022-003 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented, at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Of 25 employees tested, 2 did not have supporting documentation or personnel reports, such as time and effort logs, to support the time charged to the grant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "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; INDIANA STATE BOARD OF ACCOUNTS 18 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-003 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Condition and Context An effective internal control system was not designed, or implemented, at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Of 25 employees tested, 2 did not have supporting documentation or personnel reports, such as time and effort logs, to support the time charged to the grant. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "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; INDIANA STATE BOARD OF ACCOUNTS 18 CONCORD COMMUNITY SCHOOLS SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs There were no questioned costs identified. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FAL No. and Name: FAL 84.425D Covid-19 - Elementary and Secondary School Emergency Relief Award Number: Fund 21FESSII-110593-01A Federal Agency: Arizona Department of Education Compliance Requirement: Allowable Costs Questioned Costs: None Criteria: In accordance with 2 CFR, ?200.430(i)(1)(i), the School should maintain records that are supported by a system of internal control which provides reasonable assurance that the charges are accurate. Condition and context: For one out of forty employees tested, changes made to the employee's compensation were not accurately documented in the employee's personnel file. Cause: The School needs to formalize its procedures to properly document changes made to employee compensation levels. Effect: The employee's compensation costs charged to the program where not accurately documented in their personnel file, however it was determined that they where paid the proper amount. Recommendation: To help ensure that when changes are made to compensation levels employees are accurately paid, the School should implement internal control policies and procedures that require updates being adequately documented in the employee's personnel file. Management's Corrective Action Plan is included at the end of this report.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. 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 the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. 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 the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2022-002 Internal Control over Compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles ? Payroll Activities Information on the Major Federal Programs ? United States Department of Treasury Assistance Listing Number: 21.027 Assistance Listing Name: Coronavirus State and Local Fiscal Recovery Funds Passthrough Entity: State of Illinois, Department of Commerce and Economic Opportunity Program Title - Small Business Community Navigators Program Pass-through Entity Identifying Number - 21-483011 Sub-award Period - July 1, 2021 to June 30, 2022 National Endowment for the Humanities (NEH) Assistance Listing Number: 45.164 Assistance Listing Name: Promotion of the Humanities Public Programs Program Title - Telling the Full Story: Sustaining the Stewards of America?s Diverse Historic Places Award Number - ZOR-283411-21 Award Period - October 1, 2021 to September 30, 2023 Program Title - For the People by the People: Transforming National Trust Historic Sites through the Humanities Award Number - ZPP-283412-22 Award Period - October 1, 2021 to March 31, 2023 Criteria ? The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. 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 the audit, we noted that the Trust has a system of internal control by which every pay period, timesheets are submitted by each employee and approved by a supervisor. However, given the system limitations from the time-entry system, employees can only charge hours to their home department, and those employees who do not work solely on the federal program are not able to charge hours directly to the federal award through the system. Given the system limitations, program managers gathered documentation to evidence the hours and associated costs which should be charged to the federal award and recorded the corresponding personnel costs to the federal award through a journal entry; however, there was no direct evidence of review and approval of these personnel costs charged to the federal awards, other than an approval of the journal entry. While there was a lack of direct approval of hours charged to the federal program by program managers, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause ? The Trust?s system of internal control did not have procedures in place for program managers to approve the hours charged to the federal awards. Effect or Potential Effect ? Without direct approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over recording of time exists. Questioned Costs ? None. Context - This is a condition identified based upon our review of the Trust?s compliance with specified requirements. The prevalence of these findings is detailed in the condition section above. Repeat finding ? This is not a repeat finding.Recommendation ? We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation and certification and supervisory approval of time charged to the federal awards. Views of Responsible Officials - The Trust will implement procedures in fiscal year 2023 requiring supervisors to review and approve time charged to federal awards in addition to the reviews performed by finance staff as part of ongoing monitoring of federal awards, including approval of time incurred during the fiscal year prior to implementation of new procedures.
2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.
2 CFR ? 3474 gives regulatory effect to the Department of Education for 2 CFR ? 200.430, which provides, in part, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non- Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR ? 200.303 requires a non-Federal entity receiving federal awards to establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. During our testing of the Education Stabilization Fund grant program, we noted the internal controls over allowable costs and activities of payroll expenditures charged to the grant were not designed effectively to detect errors in rates paid. Our test detected that two out of eight employee paychecks charged to the grant were based on rates that did not agree with the approved pay rates. These two employees were overpaid by a total of $399 (see Finding 2022-003). The Educational Service Center should implement a control process that verifies wages charged to federal programs agree to approved pay rates. This will help to ensure the Educational Service Center is in compliance with Federal grant requirements for allowable costs. Failure to do so could result in future questioned costs and loss of federal grant funding.
Federal Program Affected Program Name: COVID-19: Elementary and Secondary School Emergency Relief II (ESSER II) Fund Assistance Listing Number: 84.425D Pass-Through Entity: California Department of Education (CDE) Federal Agency: U.S. Department of Education Criteria or Specific Requirements The Uniform Guidance 2 CFR ? 200.430(i)(1)(viii) states that budget estimates alone may not be used to allocate compensation charges to Federal awards. When using budget estimates for interim accounting purposes, entities must also establish internal controls to identify significant changes in corresponding work activities and review and adjust after-the-fact interim charges to reflect accurate, allowable, and properly allocated charges. Condition The District charged multi-funded employees based on budget estimates. There was not a system of monitoring and internal controls to identify significant changes in corresponding work activities nor to adjust budgeted charges to reflect the actual percentage of work performed for the grant. Cause The condition identified appears to be due to lack of sufficient internal controls to monitor and adjust after-the-fact employee budgeted time to actual time reflected on approved employee time certifications.
Finding number: 2022 001 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: Title I, Grants to Local Education Agencies ALN #: 84.010 Award number: 305 532937 2022 0035 Award year: September 1, 2021 to June 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: 2018 001 Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; and (vi) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed by each employee?s supervisor and the worksheets are reviewed by the Department Head or designee, ensuring appropriate salary and wage distribution. However, for our sample of 40 payroll transactions charged to the program, 6 transactions were not supported by a completed timesheet. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 15% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $24,188, for unsupported payroll charges, were charged to ALN # 84.010, Award No. 305 532937 2022 0035. Recommendation We recommend that BPS implement control procedures to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee The District will revert back to the previously approved Google Form process for daily sign in and sign out procedures. This form is authenticated through IT and managed in a centralized repository making it easier to recall data for auditing and validate for weekly time reporting. The District created a new office of Compliance and Risk Management. The office will audit and review the established process quarterly to ensure integrity of the process.
Finding number: 2022 004 Federal agency: U.S. Department of Education Pass through agency: Massachusetts Department of Elementary and Secondary Education Program: COVID-19 Education Stabilization Fund ALN #: 84.425D Award number: 115 511413 2022 0035 Award year: July 30, 2021 to September 30, 2023 Finding: Internal Control and Compliance over Payroll Costs Prior Year Finding: No Type of Finding: Material Weakness Criteria In accordance with 2 CFR 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; and (vi) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, 2 CFR 200.303 indicates that non Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition During our testing of allowable costs associated with payroll charges, we noted that the City of Boston Public Schools (BPS) documents time and attendance of employees on daily timesheets signed by the employee, as well as weekly time and effort reporting worksheets. The timesheets are then reviewed by each employee?s supervisor and the worksheets are reviewed by the Department Head or designee, ensuring appropriates salary and wage distribution. However, for our sample of 40 payroll transactions charged to the program, 12 transactions were not supported by a completed timesheet. Cause This appears to be due to an insufficient system for collecting, filing and maintaining supporting documentation for payroll transactions charged to Federal programs. Effect BPS is not in compliance with 2 CFR 200.430(i)(1) regarding documentation in support of salaries and wages charge to the federal program. The number of transactions that were not supported by a time sheet represent 30% of the selected population and indicate a systemic problem. Whether Sampling was Statistically Valid The sample was not intended to be, and was not, a statistically valid sample. Questioned Costs: Questioned costs of $41,281, for unsupported payroll charges, were charged to ALN # 84.425, Award No. 115 511413 2022 0035. Recommendation We recommend that BPS implement control procedures to ensure that all payroll costs charged to the federal program are supported by documentation as required by 2 CFR 200.430(i)(1). View of Responsible Officials from the Auditee The District will revert back to the previously approved Google Form process for daily sign in and sign out procedures. This form is authenticated through IT and managed in a centralized repository making it easier to recall data for auditing and validate for weekly time reporting. The District created a new office of Compliance and Risk Management. The office will audit and review the established process quarterly to ensure integrity of the process.
2022-005: Federal Awards ? Allowable Costs Federal Agency: U.S. Department of Treasury CFDA No.: 14.218 Federal Program: Community Development Block Grants/Entitlement Grants Federal Award Year: 2022 Control Category: Allowable Costs Questioned Costs: $23,270 Condition The City charged CDBG payroll expenses to the program based a timesheet allocation and did not adjust the charges to reconcile to actual time incurred per employee timesheets. Criteria 2 CFR 200.430(i), Standards for Documentation of Personnel Expenses, states, in part: ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed?? Charges must ?support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award;?? And ?budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.? Cause The City's payroll system charges time for employees each pay period based on an allocation rather than actual hours documented on the employee?s timesheet. Effect Payroll costs charged to the program were greater than amounts supported by the documentation. Questioned Costs There were questioned costs in the amount of $23,270. Recommendation We recommend that the City charge time to the program based on actual hours worked per the employees' timesheets. Management?s Response Regarding Corrective Action Taken or Planned Management acknowledges the importance of ensuring that payroll costs charged to the program are consistent between the payroll system and the employee?s timesheet. The Finance Department plans to provide training to program staff on how to properly report their time worked on the grant to ensure that hours worked are both reported correctly on the timesheets and are following the funding allocations that are approved by the grant.
Condition and Context: During 2022, the School provided stipends to employees for recruiting and retention. These stipends ranged from $1,800 to $16,700 per employee. The recruiting and retention stipends had no supporting documentation justifying the amount paid. Criteria, Cause and Effect: According to 2 CFR ?200.430, Compensation ? personal services, compensation must be ?reasonable for the services rendered? and be ?supported by the total activity for which the employee is providing services.? The cause is due to a lack of understanding of the required support for personal compensation as required by 2 CFR ?200.430. The effect is insufficient support for employee stipends. Recommendation: We recommend that the School establish a written policy on the stipends for recruiting and retention that is reasonable and comparable to other similar organizations in the area. Management?s Response: The School?s responsible officials? views and planned corrective action are in its corrective action plan at the end of the report.
Condition and Context: During 2022, the School provided stipends to employees for recruiting and retention. These stipends ranged from $1,800 to $16,700 per employee. The recruiting and retention stipends had no supporting documentation justifying the amount paid. Criteria, Cause and Effect: According to 2 CFR ?200.430, Compensation ? personal services, compensation must be ?reasonable for the services rendered? and be ?supported by the total activity for which the employee is providing services.? The cause is due to a lack of understanding of the required support for personal compensation as required by 2 CFR ?200.430. The effect is insufficient support for employee stipends. Recommendation: We recommend that the School establish a written policy on the stipends for recruiting and retention that is reasonable and comparable to other similar organizations in the area. Management?s Response: The School?s responsible officials? views and planned corrective action are in its corrective action plan at the end of the report.
Reference Number: 2022-020 Prior Year Finding: No Federal Agency: Department of the Treasury State Agency: Agency of Administration Federal Program: COVID-19 ? Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Number and Year: SLFRP4407 (3/1/2021 ? 12/31/2024) Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: Payments to subrecipients were incorrectly recorded in the Agency of Administration?s (Agency?s) accounting system as payments for Unemployment Compensation. Context: Sixty payroll related expenditures were selected for testing, including two payments recorded as Unemployment Compensation. The two unemployment compensation payments were determined to be payments to subrecipients and were not payroll related. Although the payments, totaling $652,937, were incorrectly charged as Unemployment Compensation in the Agency?s accounting system, the costs were allowable subrecipient costs. Cause: The Agency?s procedures and controls were not sufficient to ensure that payments were properly recorded in the accounting system. Data entry errors occurred when the accounts payable transactions were recorded for payment and supervisory review and approval of the transactions did not detect the errors. Effect: Program expenditures were improperly recorded in the Agency?s accounting system. Failure to accurately record payments in the accounting system could lead to reporting errors, including incorrectly reporting payments to subrecipients. Questioned costs: None noted. Although the payments had been miscoded in the accounting system, the payments were allowable subrecipient costs. Recommendation: We recommend the Agency review and enhance procedures and internal controls to ensure that accounts payable transactions are properly recorded. Views of responsible officials: Management agrees with the finding.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Identification of the Federal Programs: Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit Cluster Federal Agency: U.S. Department of Transportation Pass-Through Entity: N/A Federal Award Identification Number: CA-2017-149-00; CA-90-Z085-00; CA-90-Y974-00; CA -2019-033-00; CA -90-Y900-00; CA-2020-177-00; CA-2021-169-01; CA-2022-041-00; CA-2021-075-00 Assistance Listing Number: 21.027 Assistance Listing Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of the Treasury Pass-Through Entity: N/A Federal Award Identification Number: 1505-0271 Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): In accordance with 2 CFR ?200.303 Internal Controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should 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). Under ?200.302 Financial Management, (b) (3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, financial obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation. Under ?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. Condition: During the audit, we could not verify if the Bus Operators? and Police Officers? timecards were properly approved by their supervisors. The timecard reports were uploaded from the time entry system to the payroll module by the supervisors; however, there were no records on who reviewed the timecard reports or completed the upload of the timecard reports to the payroll module. Additionally, 8 out of 25 Police Officers? personnel action forms could not be located. Cause: The Bus Line and Police Departments did not have formal policies and procedures over the timecard approval process. There was also ineffective monitoring of human resources processes, including the maintenance of personnel action forms. Effect or Potential Effect: Without approved personnel action forms and review or approval of time cards, inaccurate payroll expenditures could be charged to the federal programs. Questioned Costs: None noted. Context: See condition above for the context of the finding. Identification as a Repeat Finding, If Applicable: Not applicable. Recommendation: We recommended the City adopt formal policies and procedures on the documentation of timecard approval process for the Bus Line and Police Departments. The City should also implement regular monitoring and conduct periodic reviews of personnel files to verify the presence and completeness of personnel action forms. Views of Responsible Officials: Management has reviewed the payroll/timecard approval process. The City utilizes New World Systems eSuites for employees to enter their bi-weekly hours, and for employees and supervisors to approve timesheets. However, not all employees can utilize eSuites, as the requirements for timekeeping for Bus Operators, Police and Fire personnel is such that separate timekeeping systems must be maintained and utilized. To that end, staff has initiated a process whereby ? for employees not using eSuites ? manual review and approval of bi-weekly hours is conducted by supervisors in the appropriate department (i.e., Transit, Police, etc.). Management believes this additional review and approval level will provide the necessary back-up to improve internal control over timecards/timekeeping.
Compliance Requirement: Procurement and Written Policies ALN Number: 10.664 Grant Number: 18-DG-11020000-050 Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) ? 180.300 (January 1, 2021) requires non-federal entities to verify an entity is not excluded or disqualified prior to entering into a covered transaction by, ?(a) Checking SAM Exclusions; or (b) Collecting a certification from that [entity]; or (c) Adding a clause or condition to the covered transaction with that [entity].? A good internal control plan requires adequate procedures to ensure the County has proper procedures in place to verify that contractors paid with grant funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, and or/standards of conduct, except if excluded in compliance supplement. There are four basic reasons for creating an internal control system through defining and documenting processes with well written policies and procedures: 1.Compliance 2.Operational Needs 3.Managing Risks 4.Continuous Improvement Complying with laws and regulations should be a critical function of the County. Well-defined and documented processes (i.e. procedures, training manuals) along with records that demonstrate process capability can make evident an effective internal control system and compliance to Federal guidelines. Another important role of documentation of procedures is to ensure processes fundamental to the County are properly guided by County?s officials, and are consistent way that meets the County?s needs, and that are important related information and data are captured and communicated. Documentation of procedures are important for controlling process, documenting the standard work that was performed and training new employees. Condition: The County lacks certain written policies and procedures required by Uniform Guidance. Although the County has an outdated Accounting Policy, certain policies for Federal Expenditures need to be updated and added. These include: 1. Financial management (200.302) 2.Payment (200.305) 3.General procurement standards (200.318) 4.Competition (200.319) 5.Methods of procurement to be followed (200.320) 6.Compensation ? personal services (200.430) 7.Compensation ? fringe benefits (200.431) 8.Relocation costs of employees (200.464) 9.Travel costs (200.474) Cause: Appears to be the result of a lack of training coupled with limited staffing and resources. Questioned Costs: None Context for Calculation Of Questioned Costs: None Effect: Without adequate procedures to ensure contractors are not suspended, debarred or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations. Recommendation: We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor in not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and that procedures is adequately documented. Furthermore, the County should familiarize themselves with the Uniform Guidance and implement the following: 1.Develop and document all of its significant processes over federal awards. 2.Make the written policies and procedures available to all personnel and departments within the County 3.Ensure the written policies and procedures are accurate, complete, and current at all times (The Board of County Commissioners should update the policy on an annual basis.) 4.Revise policies and procedures for changes in business processes and policies over federal awards 5.Communicate significant changes to all affected personnel immediately to ensure they are aware of any revisions to their Responsibilities to the federal award. 6.Document policies and procedures to facilitate training and provide guidelines relative to federal awards for changes in personnel.
Compliance Requirement: Procurement and Written Policies ALN Number: 10.664 Grant Number: 18-DG-11020000-050 Criteria: Title 2 of the U.S. Code of Federal Regulations (CFR) ? 180.300 (January 1, 2021) requires non-federal entities to verify an entity is not excluded or disqualified prior to entering into a covered transaction by, ?(a) Checking SAM Exclusions; or (b) Collecting a certification from that [entity]; or (c) Adding a clause or condition to the covered transaction with that [entity].? A good internal control plan requires adequate procedures to ensure the County has proper procedures in place to verify that contractors paid with grant funds are not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities. The Uniform Guidance requires nonfederal entities that receive federal awards to establish written policies, procedures, and or/standards of conduct, except if excluded in compliance supplement. There are four basic reasons for creating an internal control system through defining and documenting processes with well written policies and procedures: 1.Compliance 2.Operational Needs 3.Managing Risks 4.Continuous Improvement Complying with laws and regulations should be a critical function of the County. Well-defined and documented processes (i.e. procedures, training manuals) along with records that demonstrate process capability can make evident an effective internal control system and compliance to Federal guidelines. Another important role of documentation of procedures is to ensure processes fundamental to the County are properly guided by County?s officials, and are consistent way that meets the County?s needs, and that are important related information and data are captured and communicated. Documentation of procedures are important for controlling process, documenting the standard work that was performed and training new employees. Condition: The County lacks certain written policies and procedures required by Uniform Guidance. Although the County has an outdated Accounting Policy, certain policies for Federal Expenditures need to be updated and added. These include: 1. Financial management (200.302) 2.Payment (200.305) 3.General procurement standards (200.318) 4.Competition (200.319) 5.Methods of procurement to be followed (200.320) 6.Compensation ? personal services (200.430) 7.Compensation ? fringe benefits (200.431) 8.Relocation costs of employees (200.464) 9.Travel costs (200.474) Cause: Appears to be the result of a lack of training coupled with limited staffing and resources. Questioned Costs: None Context for Calculation Of Questioned Costs: None Effect: Without adequate procedures to ensure contractors are not suspended, debarred or otherwise excluded from or ineligible for participation in Federal programs or activities, there is an increased risk for the misuse of Federal funds and noncompliance with Federal regulations. Recommendation: We recommend the County implement procedures to ensure, prior to entering into a covered transaction, that a contractor in not suspended, debarred, or otherwise excluded from or ineligible for participation in Federal programs or activities, and that procedures is adequately documented. Furthermore, the County should familiarize themselves with the Uniform Guidance and implement the following: 1.Develop and document all of its significant processes over federal awards. 2.Make the written policies and procedures available to all personnel and departments within the County 3.Ensure the written policies and procedures are accurate, complete, and current at all times (The Board of County Commissioners should update the policy on an annual basis.) 4.Revise policies and procedures for changes in business processes and policies over federal awards 5.Communicate significant changes to all affected personnel immediately to ensure they are aware of any revisions to their Responsibilities to the federal award. 6.Document policies and procedures to facilitate training and provide guidelines relative to federal awards for changes in personnel.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-003 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00849 n/a Administrative Cost Grants for Indian Schools 15.046 A19AV00849 n/a Twenty-First Century Community Learning Centers 84.287 A19AV00849 n/a Federal Agencies: U.S. Department of Interior, U.S. Department of Education Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Allowable Costs/Cost Principles CRITERIA According to Uniform Guidance 2 CFR 200.430, payroll distribution records must support the distribution of salary or wages among specific activities or cost objectives if an employee works on more than one award or activity. Employees who work on multiple activities or cost objectives must submit monthly activity reports, documenting time worked in each Federal program. CONDITION Time and effort records were not maintained for employees whose time was charges to multiple cost objectives. CAUSE The School?s policies over time and effort reporting were not always followed. EFFECT The School was not in compliance with the time and effort provision of Uniform Guidance 2 CFR 200.430. CONTEXT For two of two employees reviewed that were compensated from funding sources with different multiple cost objectives, time and effort documentation was not maintained to support costs charged to the Federal programs. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The School should review and implement policies related to time and effort reporting to ensure compliance. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-003 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00849 n/a Administrative Cost Grants for Indian Schools 15.046 A19AV00849 n/a Twenty-First Century Community Learning Centers 84.287 A19AV00849 n/a Federal Agencies: U.S. Department of Interior, U.S. Department of Education Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Allowable Costs/Cost Principles CRITERIA According to Uniform Guidance 2 CFR 200.430, payroll distribution records must support the distribution of salary or wages among specific activities or cost objectives if an employee works on more than one award or activity. Employees who work on multiple activities or cost objectives must submit monthly activity reports, documenting time worked in each Federal program. CONDITION Time and effort records were not maintained for employees whose time was charges to multiple cost objectives. CAUSE The School?s policies over time and effort reporting were not always followed. EFFECT The School was not in compliance with the time and effort provision of Uniform Guidance 2 CFR 200.430. CONTEXT For two of two employees reviewed that were compensated from funding sources with different multiple cost objectives, time and effort documentation was not maintained to support costs charged to the Federal programs. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The School should review and implement policies related to time and effort reporting to ensure compliance. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-003 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00849 n/a Administrative Cost Grants for Indian Schools 15.046 A19AV00849 n/a Twenty-First Century Community Learning Centers 84.287 A19AV00849 n/a Federal Agencies: U.S. Department of Interior, U.S. Department of Education Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Allowable Costs/Cost Principles CRITERIA According to Uniform Guidance 2 CFR 200.430, payroll distribution records must support the distribution of salary or wages among specific activities or cost objectives if an employee works on more than one award or activity. Employees who work on multiple activities or cost objectives must submit monthly activity reports, documenting time worked in each Federal program. CONDITION Time and effort records were not maintained for employees whose time was charges to multiple cost objectives. CAUSE The School?s policies over time and effort reporting were not always followed. EFFECT The School was not in compliance with the time and effort provision of Uniform Guidance 2 CFR 200.430. CONTEXT For two of two employees reviewed that were compensated from funding sources with different multiple cost objectives, time and effort documentation was not maintained to support costs charged to the Federal programs. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The School should review and implement policies related to time and effort reporting to ensure compliance. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-003 Repeat Finding: No Program Names/Assistance Listing Titles: Assistance Listing Numbers: Federal Award Numbers: Questioned Costs: Indian School Equalization Program 15.042 A19AV00849 n/a Administrative Cost Grants for Indian Schools 15.046 A19AV00849 n/a Twenty-First Century Community Learning Centers 84.287 A19AV00849 n/a Federal Agencies: U.S. Department of Interior, U.S. Department of Education Pass-Through Agency: Bureau of Indian Education Type of Finding: Noncompliance, Significant Deficiency Compliance Requirements: Allowable Costs/Cost Principles CRITERIA According to Uniform Guidance 2 CFR 200.430, payroll distribution records must support the distribution of salary or wages among specific activities or cost objectives if an employee works on more than one award or activity. Employees who work on multiple activities or cost objectives must submit monthly activity reports, documenting time worked in each Federal program. CONDITION Time and effort records were not maintained for employees whose time was charges to multiple cost objectives. CAUSE The School?s policies over time and effort reporting were not always followed. EFFECT The School was not in compliance with the time and effort provision of Uniform Guidance 2 CFR 200.430. CONTEXT For two of two employees reviewed that were compensated from funding sources with different multiple cost objectives, time and effort documentation was not maintained to support costs charged to the Federal programs. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The School should review and implement policies related to time and effort reporting to ensure compliance. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
Department of Health and Human Services 2022-001 Block Grants for Community Mental Health Services Criteria: Under 2 CFR 200.430 charges to Federal Awards for salaries and wages must be based on records that accurately reflect work performed. Condition: Out of the 40 payroll transactions tested, 6 did not have personnel activity reports signed by the employees to verify the allocation of time. Cause: Turning Point Behavioral Health Care Center implemented the use of personnel activity reports during 2022 and there were challenges in getting employees to comply with the changes. Effect: There is not proper documentation to support the allocation of time and effort that was charged to the grant. Auditor?s Recommendation: We recommend Turning Point Behavioral Health Care Center remind its employees that the personnel activity reports are required to be completed. Management response: We agree with the finding, and we will be implementing additional staff training for the Personal Activity Reports to be completed by February 24, 2023. In addition to staff training, we have also created a new process in which all Personal Activity Reports will be reviewed. This process will be completed monthly by payroll staff to ensure all personal activity reports are completed accurately.
Section III - Federal Award Findings and Questioned Costs Finding: 2022-001 ? Other Matters ? Personnel Activity Reports (PARs) Programs: AL 84.425 Education Stabilization Fund Agency: U.S. Department of Education Criteria: Per 2 CFR 200.430(i)(vii) budget estimates alone do not qualify as support for payroll and other charges but may be used for interim accounting provided that the system used to establish the estimate produces reasonable approximations of the activity. Condition: For 4 out of 4 employees selected, no Personnel Activity Reports (PARs) were able to be provided documenting the allocation of the work performed on each grant. Cause: The School District did not comply with the requirements related to documentation of personnel expense as per CFR Title 2 Section 200.430. Effect: The use of budget estimates to allocate payroll and other charges may not be a reasonable approximation of the activity performed. Questioned Costs: None noted. Recommendation: We recommend that the School District maintain personnel activity reports for each employee. The certification will include the employee?s name and position, the period of employment, the name of the federal program, be completed after the work is done and be signed and dated by the employee periodically, in accordance with documentation requirements. Views of Responsible Officials: See Corrective Action Plan.