FINDING 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): 21-1600, 22-1600 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-001. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The Food Service Director, Food Service Manager, and Food Service Assistant had other job responsibilities, and, therefore, were paid from multiple cost objectives. The amount of their compensation paid from the Child Nutrition Cluster (program) was based on a pre-determined percentage. No personnel activity reports or other time and effort documentation was presented to support the amounts charged to the program. The total amount paid from the School Lunch fund, for these positions, during the audit period was $48,502, which was considered questioned costs. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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 developed an effective system of internal controls that would have ensured compliance or that adequate supporting documentation be retained related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls, and to provide adequate supporting documentation, enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $48,502 were identified, as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls and retain adequate supporting documentation related to 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 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): 21-1600, 22-1600 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-001. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The Food Service Director, Food Service Manager, and Food Service Assistant had other job responsibilities, and, therefore, were paid from multiple cost objectives. The amount of their compensation paid from the Child Nutrition Cluster (program) was based on a pre-determined percentage. No personnel activity reports or other time and effort documentation was presented to support the amounts charged to the program. The total amount paid from the School Lunch fund, for these positions, during the audit period was $48,502, which was considered questioned costs. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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 developed an effective system of internal controls that would have ensured compliance or that adequate supporting documentation be retained related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls, and to provide adequate supporting documentation, enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $48,502 were identified, as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls and retain adequate supporting documentation related to 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 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): 21-1600, 22-1600 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-001. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The Food Service Director, Food Service Manager, and Food Service Assistant had other job responsibilities, and, therefore, were paid from multiple cost objectives. The amount of their compensation paid from the Child Nutrition Cluster (program) was based on a pre-determined percentage. No personnel activity reports or other time and effort documentation was presented to support the amounts charged to the program. The total amount paid from the School Lunch fund, for these positions, during the audit period was $48,502, which was considered questioned costs. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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 developed an effective system of internal controls that would have ensured compliance or that adequate supporting documentation be retained related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls, and to provide adequate supporting documentation, enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $48,502 were identified, as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls and retain adequate supporting documentation related to 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 2022-002 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, COVID-19 - School Breakfast Program, National School Lunch Program, COVID-19 - National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): 21-1600, 22-1600 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2020-001. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The Food Service Director, Food Service Manager, and Food Service Assistant had other job responsibilities, and, therefore, were paid from multiple cost objectives. The amount of their compensation paid from the Child Nutrition Cluster (program) was based on a pre-determined percentage. No personnel activity reports or other time and effort documentation was presented to support the amounts charged to the program. The total amount paid from the School Lunch fund, for these positions, during the audit period was $48,502, which was considered questioned costs. 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). . . ." INDIANA STATE BOARD OF ACCOUNTS 17 SOUTH DEARBORN COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 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; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . (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 developed an effective system of internal controls that would have ensured compliance or that adequate supporting documentation be retained related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal controls, and to provide adequate supporting documentation, enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $48,502 were identified, as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls and retain adequate supporting documentation related to 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.
2022-007 - FINDING - Insufficient Controls over Payroll Charged to a Research Grant Federal Agency: National Institute of Health Assistance Listing Number: 93.397 Program Names and Award Numbers: Cancer Centers Support Grants (The Chicago Cancer Health Equity Collaborative a/k/a ChicagoCHEC), U54CA202995 Program Expenditures: $1,083,258 Questioned Costs: None Northeastern Illinois University (University) did not pay an employee for the time worked on a grant for a 3-month period when the employee worked those hours. During the testing of 60 expenditures selected from various research and development grants, we noted one (2%) expenditure tested for allowability was for retroactive pay to an employee originally only paid half of the hours worked on a grant for a 3-month period. The employee?s reported work hours were adjusted between periods to match available funding under the assumption that additional funding would be secured in a timely manner. The sample was not intended to be, and was not, a statistically valid sample. Uniform Guidance (2 CFR 200.430(i)) states charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees must also be supported by records indicating the total number of hours worked each day. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all allowability policies are followed. University officials stated there was a significant delay by the funding agency in approving the usage of unspent grant funds from a prior period due to a delay in accepting the final financial status report for the previous grant period resulting in the University creating the payroll situation above. University?s response to delays in securing funding to pay employee resulted in costs being paid and charged to the grant in the wrong time periods. (Finding Code No. 2022-007). RECOMMENDATION - We recommend the University ensure procedures for payroll charges for employees are always for the actual hours worked within a given pay period according to the applicable regulations. UNIVERSITY RESPONSE - The University agrees with the recommendation.
Finding 2022-001 Federal Award Program: Emergency Rental Assistance Program (Assistance Listing # 21.023) Pass-through Agency: Lane County Type of Finding: Significant deficiency in internal controls over compliance Compliance Requirement: Allowable costs Criteria: The Uniform Guidance (2 CFR ?200.430) states that costs of compensation are allowable to the extent they are reasonable for the services rendered and conform to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; and follow 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. ShelterCare?s written policies rely on the use of timesheets, activity reports (which document actual hours worked by program/grant) and an excel billing worksheet to charge time to federal program grants. Condition: We noted instances in which the internal control policies were inconsistently applied to the process of recording and billing employees? time. We also noted instances in which time sheets and activity reports were missing employee and supervisor signatures indicating approval. We also noted instances in which information from the activity reports did not agree to the underlying timesheets. Cause of Condition: Internal control policies and procedures were not consistently applied to the process for timesheet review and approval, completion of activity reports and preparation of billings for the federal program grants. There was not adequate review of the billings against the underlying support (timesheets and activity reports) to catch input errors in the billings. Effect of Condition: This condition increases the risk that the incorrect amount of costs and/or unallowable costs would be charged to the federal program. Questioned Costs: No reportable questioned costs. Context: Our sample size was 40 payroll transactions and was not a statistically valid sample as it was selected haphazardly. We noted two instances in our sample in which timesheets and activity reports were missing employee and supervisor signatures indicating approval. We noted two instances in which information input into the billing did not agree to the underlying data in the activity reports and timesheets. Repeat Finding: No. Recommendation: We recommend management review the current process used to transfer data from the timesheet to the activity report to the billing worksheets and institute additional layers of review of the data to ensure data is accurately allocated and reported in the billing worksheets for which the costs charged to the grants are derived. We also recommend management consistently apply procedures to ensure activity reports are completed for all employees charging time to programs and appropriate approvals are obtained prior to billings. View of Responsible Officials: Management agrees with the finding. See Corrective Action Plan.
Significant Deficiency 2022-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund Assistance Listing No. 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR ?200.430. Condition: Subpart I, 2 CFR ?200.430 of the Uniform Guidance requires that charges to ?Federal awards for salaries and wages must be based on records that accurately reflect the work performed.? The documentation should support the distribution of the employee?s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District?s PARs for two employees, did not accurately reflect what was charged to the grants in order to comply with Subpart I, 2 CFR ?200.430. Cause: The District budgeted costs for certain federal grants based on the required FS-10 form it submits to the State. The District then utilized the PARs to track and document the actual time and effort to support payroll costs charged to each grant. It was noted that the actual expenses charged for two employees was not supported by the PARs maintained by the District. As described in Subpart I, 2 CFR ?200.430, the District is required to document and maintain the support for salaries charged to Federal awards. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should monitor and update the appropriate documentation to support the salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR ?200.430. In the event that modifications for costs charged to grants are necessary, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, if necessary. In addition, the District should update the PARs documentation to support amounts charged to the grant. Views of Responsible Officials of Auditee: Since the grant funding periods for each of these grants are still open, the District has contacted NYSED and has been advised to submit an amended budget for these additional costs charged, as they are allowable. In addition, the District will review its internal procedure documentation for payroll costs charged to the grants to ensure that the actual costs submitted for reimbursement are supported by the PARs for each employee.
Significant Deficiency 2022-001. Payroll (Allowable Costs/Cost Principles) United States Department of Education, Passed-through New York State Department of Education: Education Stabilization Funds (ESF) COVID-19: Elementary and Secondary School Emergency Relief (ESSER) Fund Assistance Listing No. 84.425D COVID-19: American Rescue Plan ? Elementary and Secondary School Emergency Relief (ARP ESSER) Assistance Listing No. 84.425U Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR ?200.430. Condition: Subpart I, 2 CFR ?200.430 of the Uniform Guidance requires that charges to ?Federal awards for salaries and wages must be based on records that accurately reflect the work performed.? The documentation should support the distribution of the employee?s compensation among specific activities if the employee works on more than one federal award, or a Federal award and non-Federal award. The preparation of personnel activity reports (PARs) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, the District?s PARs for two employees, did not accurately reflect what was charged to the grants in order to comply with Subpart I, 2 CFR ?200.430. Cause: The District budgeted costs for certain federal grants based on the required FS-10 form it submits to the State. The District then utilized the PARs to track and document the actual time and effort to support payroll costs charged to each grant. It was noted that the actual expenses charged for two employees was not supported by the PARs maintained by the District. As described in Subpart I, 2 CFR ?200.430, the District is required to document and maintain the support for salaries charged to Federal awards. Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal award. Questioned Costs: None Recommendation: The District should monitor and update the appropriate documentation to support the salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR ?200.430. In the event that modifications for costs charged to grants are necessary, the District should contact the New York State Department of Education (NYSED) and file the appropriate amendment, if necessary. In addition, the District should update the PARs documentation to support amounts charged to the grant. Views of Responsible Officials of Auditee: Since the grant funding periods for each of these grants are still open, the District has contacted NYSED and has been advised to submit an amended budget for these additional costs charged, as they are allowable. In addition, the District will review its internal procedure documentation for payroll costs charged to the grants to ensure that the actual costs submitted for reimbursement are supported by the PARs for each employee.
2022 ? 003 Allowable Activities and Costs - Payroll Disbursements Federal Agency: U.S. Department of Treasury Centers for Disease Control and Prevention U.S. Department of Health & Human Services Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Child Support Enforcement Assistance Listing Number: 21.027 93.323 93.563 Federal Award Identification Number and Year: 1505-0271 - 2021 6NU50CK000539-01-08 DHHS-CDC - 2020 Pass-Through Agency: California Department of Public Health Heluna Health California Department of Child Support Services Pass-Through Number(s): COVID-19ELC29 and COVID-19ELC87 0187.3380 21-06 Award Period: May 26, 2021 - December 31, 2026 May 18, 2020 - November 17, 2022 and January 15, 2021 - July 31, 2023 May 1, 2020 - March 31, 2022 July 1, 2021 - June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: According to the Assistance Listing Description for CSLFRF and ELC, Subpart D, Post Federal; Award Requirements and Subpart E, Cost Principles apply to the assistance listing. According to the LCSA Fiscal and Administrative Policy Manual Revised 2021, costs allowable for reimbursement under the Child Support IV-D award are governed by federal regulations. Title 2, ?200.403, ?200.404, and Title 45, Part 304 provide general guidelines for determining cost allowability. According to ? 200.302 Financial management of 2 CFR Part 200, the financial management system of each nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the federal award. According to ? 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to ? 200.403 Factors affecting allowability of costs of 2 CFR Part 200, except where otherwise authorized by statute, costs must be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonfederal entity in order to be allowable under federal awards. According to ? 200.430 Compensation?personal services of 2 CFR Part 200, 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 nonfederal entity consistently applied to both federal and nonfederal activities; 2. Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and 3. Is determined and supported as provided in paragraph (i) of this section, when applicable. According to ? 200.431 Compensation-fringe benefits of 2 CFR Part 200, except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, nonfederal entity-employee agreement, or an established policy of the nonfederal entity. Condition: The County does not have written procedures for determining the allowability of costs nor an established written policy for compensation-personal services and fringe benefits. Questioned costs: Unknown Context: During our testing, we noted the County charged various types of salaries and benefits to the grants. The County does not have written procedures for determining the allowability of costs. Specific to compensation-personal services and fringe benefits, there is not an established written policy for us to test that personnel costs charged to grants conform to, follows an appointment in accordance with, and are required by an established policy of the County. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential unallowable costs charged to grants. Recommendation: We recommend the County establish written procedures for determining the allowability of costs to include a written policy regarding the charging of personnel costs to grants. Views of responsible officials: There is no disagreement from responsible officials.
2022 ? 003 Allowable Activities and Costs - Payroll Disbursements Federal Agency: U.S. Department of Treasury Centers for Disease Control and Prevention U.S. Department of Health & Human Services Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Child Support Enforcement Assistance Listing Number: 21.027 93.323 93.563 Federal Award Identification Number and Year: 1505-0271 - 2021 6NU50CK000539-01-08 DHHS-CDC - 2020 Pass-Through Agency: California Department of Public Health Heluna Health California Department of Child Support Services Pass-Through Number(s): COVID-19ELC29 and COVID-19ELC87 0187.3380 21-06 Award Period: May 26, 2021 - December 31, 2026 May 18, 2020 - November 17, 2022 and January 15, 2021 - July 31, 2023 May 1, 2020 - March 31, 2022 July 1, 2021 - June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: According to the Assistance Listing Description for CSLFRF and ELC, Subpart D, Post Federal; Award Requirements and Subpart E, Cost Principles apply to the assistance listing. According to the LCSA Fiscal and Administrative Policy Manual Revised 2021, costs allowable for reimbursement under the Child Support IV-D award are governed by federal regulations. Title 2, ?200.403, ?200.404, and Title 45, Part 304 provide general guidelines for determining cost allowability. According to ? 200.302 Financial management of 2 CFR Part 200, the financial management system of each nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the federal award. According to ? 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to ? 200.403 Factors affecting allowability of costs of 2 CFR Part 200, except where otherwise authorized by statute, costs must be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonfederal entity in order to be allowable under federal awards. According to ? 200.430 Compensation?personal services of 2 CFR Part 200, 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 nonfederal entity consistently applied to both federal and nonfederal activities; 2. Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and 3. Is determined and supported as provided in paragraph (i) of this section, when applicable. According to ? 200.431 Compensation-fringe benefits of 2 CFR Part 200, except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, nonfederal entity-employee agreement, or an established policy of the nonfederal entity. Condition: The County does not have written procedures for determining the allowability of costs nor an established written policy for compensation-personal services and fringe benefits. Questioned costs: Unknown Context: During our testing, we noted the County charged various types of salaries and benefits to the grants. The County does not have written procedures for determining the allowability of costs. Specific to compensation-personal services and fringe benefits, there is not an established written policy for us to test that personnel costs charged to grants conform to, follows an appointment in accordance with, and are required by an established policy of the County. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential unallowable costs charged to grants. Recommendation: We recommend the County establish written procedures for determining the allowability of costs to include a written policy regarding the charging of personnel costs to grants. Views of responsible officials: There is no disagreement from responsible officials.
2022 ? 003 Allowable Activities and Costs - Payroll Disbursements Federal Agency: U.S. Department of Treasury Centers for Disease Control and Prevention U.S. Department of Health & Human Services Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) COVID-19 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Child Support Enforcement Assistance Listing Number: 21.027 93.323 93.563 Federal Award Identification Number and Year: 1505-0271 - 2021 6NU50CK000539-01-08 DHHS-CDC - 2020 Pass-Through Agency: California Department of Public Health Heluna Health California Department of Child Support Services Pass-Through Number(s): COVID-19ELC29 and COVID-19ELC87 0187.3380 21-06 Award Period: May 26, 2021 - December 31, 2026 May 18, 2020 - November 17, 2022 and January 15, 2021 - July 31, 2023 May 1, 2020 - March 31, 2022 July 1, 2021 - June 30, 2022 Type of Finding: ? Significant Deficiency in Internal Control over Compliance ? Other Matters Criteria or specific requirement: According to the Assistance Listing Description for CSLFRF and ELC, Subpart D, Post Federal; Award Requirements and Subpart E, Cost Principles apply to the assistance listing. According to the LCSA Fiscal and Administrative Policy Manual Revised 2021, costs allowable for reimbursement under the Child Support IV-D award are governed by federal regulations. Title 2, ?200.403, ?200.404, and Title 45, Part 304 provide general guidelines for determining cost allowability. According to ? 200.302 Financial management of 2 CFR Part 200, the financial management system of each nonfederal entity must provide for written procedures for determining the allowability of costs in accordance with subpart E of this part and the terms and conditions of the federal award. According to ? 200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to ? 200.403 Factors affecting allowability of costs of 2 CFR Part 200, except where otherwise authorized by statute, costs must be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the nonfederal entity in order to be allowable under federal awards. According to ? 200.430 Compensation?personal services of 2 CFR Part 200, 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 nonfederal entity consistently applied to both federal and nonfederal activities; 2. Follows an appointment made in accordance with a nonfederal entity's laws and/or rules or written policies and meets the requirements of federal statute, where applicable; and 3. Is determined and supported as provided in paragraph (i) of this section, when applicable. According to ? 200.431 Compensation-fringe benefits of 2 CFR Part 200, except as provided elsewhere in these principles, the costs of fringe benefits are allowable provided that the benefits are reasonable and are required by law, nonfederal entity-employee agreement, or an established policy of the nonfederal entity. Condition: The County does not have written procedures for determining the allowability of costs nor an established written policy for compensation-personal services and fringe benefits. Questioned costs: Unknown Context: During our testing, we noted the County charged various types of salaries and benefits to the grants. The County does not have written procedures for determining the allowability of costs. Specific to compensation-personal services and fringe benefits, there is not an established written policy for us to test that personnel costs charged to grants conform to, follows an appointment in accordance with, and are required by an established policy of the County. Cause: Management oversight. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential unallowable costs charged to grants. Recommendation: We recommend the County establish written procedures for determining the allowability of costs to include a written policy regarding the charging of personnel costs to grants. Views of responsible officials: There is no disagreement from responsible officials.
2022-003 Department of Health and Human Services FFLA #93.087, 90CU0090, 9/30/2020 ? 9/29/2022; 90CU0095, 9/30/2018 ? 9/29/2023 Enhance Safety of Children Affected by Substance Abuse Activities Allowed and Allowable Costs Material Weakness in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (3 instances). b) Calculation errors for expenses allocated to the grant (4 instances). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours. In addition, the secondary review of federal grant expenditure tracking spreadsheet did not identify the calculation errors. Effect: The Center?s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 60 nonpayroll and payroll transactions were tested which accounted for $116,557 out of $870,823 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: Yes, prior year finding 2021-003 Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
2022-005 Department of Health and Human Services FFLA #93.829, H79SM083331-02, 5/1/2021 ? 12/31/2022 Section 223 Demonstration Programs to Improve Community Mental Health Services Activities Allowed and Allowable Costs Material Weakness in Internal Control over Compliance Criteria: The Center is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. 2 CFR 200.430(i) establishes the standards for documentation of personnel expenses including charges to Federal awards for salaries and wages. Charges must be based on records that accurately reflect the work performed with the records meeting the following standards: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. b) Be incorporated into the office records of the non-Federal entity. c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. d) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy. e) Comply with the established accounting policies and practices of the non-Federal entity. f) Support the distribution of the employee?s salary or wages among specific activities or cost objectives. g) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes. Condition: In our sample of expenditures selected for testing, we noted the following items: a) ClickTime timecard, which tracks federal and nonfederal hours for employees, did not properly reflect the employees total federal and nonfederal hours being paid within the payroll register (7 instances). b) Calculation errors for expenses allocated to the grant (2 instances). Cause: Employees did not enter all nonfederal hours within the ClickTime system and the secondary review of the employee ClickTime timecards did not identify the missing hours. In addition, the secondary review of federal grant expenditure tracking spreadsheet did not identify the calculation errors. Effect: The Center?s controls did not detect or correct the errors identified, which results in a reasonable possibility that the Center could submit disallowed costs under the federal awards and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. The program was underallocated. Context: A total non-statistical sample of 60 payroll and nonpayroll transactions were tested which accounted for $222,843 out of $2,108,556 of federal payroll and nonpayroll direct program expenditures. Repeat Finding from Prior Year: Yes, prior year finding 2021-005 Recommendation: We recommend management review the procedures and control processes involving timecards and the federal grant expenditure tracking spreadsheet to ensure compliance with the federal grant. Views of Responsible Officials: Management is in agreement.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
Program Identification Finding Reference Number: F-2022-001 Federal Program Title, Awarding Agency, Pass-Through Entity, Assistance Listing Number, and Award Number: Supporting Effective Instruction State Grant (Title II, Part A of the ESEA), U.S. Department of Education, Passed through the California Department of Education, AL No. 84.367, PCA No. 14341 (Material Weakness) Elementary and Secondary School Emergency Relief Fund, U.S. Department of Education, Passed through the California Department of Education, AL No. 84.425D, PCA No. 15547 (Material Weakness) Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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.? In accordance with LAUSD Policy Bulletin 2643.11 entitled, ?Documentation for Employees Paid from Federal and State Categorical Programs,? the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from Federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.11. Supporting Effective Instruction State Grants (Title II, Part A of the ESEA): In our sample of sixty (60) payroll expenditures, we noted that five (5) employees provided the signed Multi-Funded Time Reports; however, the hours reported on the Multi-Funded Time Reports did not support the hours recorded in SAP. For four (4) of the five (5) employees, the hours reported on the Multi-Funded Time Reports were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For one (1) of the five (5) employees, the hours reported on the Muti-Funded Report were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $4,906 and $683, respectively, of the $208,524 sampled from $14,281,515 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $274. Elementary and Secondary School Emergency Relief Fund: In our sample of sixty (60) payroll expenditures, we noted that three (3) employees provided the timesheets; however, the hours reported on the timesheets did not support the hours recorded in SAP. For one (1) of the three (3) employees, the hours reported on the timesheet were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For two (2) of the three (3) employees, the hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $820 and $350, respectively, of the $223,777 sampled from $487,522,973 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $1,482. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District?s policies and procedures. The discrepancies between the time reports/timesheets and the SAP data appear to be due to clerical errors and lack of sufficient review. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Supporting Effective Instruction State Grants (Title II, Part A of the ESEA) (Assistance Listing No. 84.367): $4,906 overstatement and $683 understatement due to unsupported hours charged. Elementary and Secondary School Emergency Relief Fund (Assistance Listing No. 84.425D): $820 overstatement and $350 understatement due to unsupported hours charged. There were no questioned costs due to untimely completed/signed Periodic Certifications because payroll costs incurred were allowable costs for the programs. Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2021-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and the related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the required procedures to ensure the ongoing compliance requirements are being monitored. We also recommend that management responsible for each grant design and implement controls to review and approve the Multi-Funded Time Reports or timesheets prior to submission to the funding agency, and the review and approval are documented. View of Responsible Officials and Corrective Action Plan 1) Accounting Controls team will continue to coordinate with Central Office/program coordinators to: a) communicate the impact of questioned cost resulting from current year?s audit findings b) follow through on the sample testing performed on payroll documentations as a secondary control twice a year; and c) provide feedback and training to the schools based on the result of sample testing 2) Accounting Controls team will coordinate with the MyPLN team regarding the implementation of the annual Mandatory Time & Effort Training. This is a required 30-minute training of administrators, timekeepers, and supervisors with review questions at the end of the course, and requires a 100% correct answers before a certificate of completion will be issued. Name: Timothy Rosnick Title: Deputy Controller Telephone: (213) 241 -7989
Program Identification Finding Reference Number: F-2022-001 Federal Program Title, Awarding Agency, Pass-Through Entity, Assistance Listing Number, and Award Number: Supporting Effective Instruction State Grant (Title II, Part A of the ESEA), U.S. Department of Education, Passed through the California Department of Education, AL No. 84.367, PCA No. 14341 (Material Weakness) Elementary and Secondary School Emergency Relief Fund, U.S. Department of Education, Passed through the California Department of Education, AL No. 84.425D, PCA No. 15547 (Material Weakness) Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles State Audit Guide Finding Code: 30000 and 50000 Criteria 2 CFR section 200.430(i), Standards for Documentation of Personnel Expenses, requires: (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.? In accordance with LAUSD Policy Bulletin 2643.11 entitled, ?Documentation for Employees Paid from Federal and State Categorical Programs,? the Periodic Certification (formerly referred to as Semi-Annual Certifications) must be completed each fiscal year for employees whose compensation is singularly sourced from Federal funds. The first Periodic Certification covers the period between July 1st through December 31st, and the second Periodic Certification covers the period between January 1st through June 30th. These certifications should be completed no later than January 31st and July 31st, respectively. Employees whose compensation is sourced by a combination of Federal or State funds that are not a Single Cost Objective are required to complete and sign the Multi-Funded Time Report at the end of each month. Condition As part of our compliance review over payroll expenditures, we selected samples of payroll expenditures charged to the program and reviewed the supporting documents to ascertain if they were allowable per program regulations, accurately charged to the program, and appropriately supported in accordance with 2 CFR section 200.430(i) and LAUSD Policy Bulletin 2643.11. Supporting Effective Instruction State Grants (Title II, Part A of the ESEA): In our sample of sixty (60) payroll expenditures, we noted that five (5) employees provided the signed Multi-Funded Time Reports; however, the hours reported on the Multi-Funded Time Reports did not support the hours recorded in SAP. For four (4) of the five (5) employees, the hours reported on the Multi-Funded Time Reports were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For one (1) of the five (5) employees, the hours reported on the Muti-Funded Report were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $4,906 and $683, respectively, of the $208,524 sampled from $14,281,515 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $274. Elementary and Secondary School Emergency Relief Fund: In our sample of sixty (60) payroll expenditures, we noted that three (3) employees provided the timesheets; however, the hours reported on the timesheets did not support the hours recorded in SAP. For one (1) of the three (3) employees, the hours reported on the timesheet were less than the hours recorded in SAP, leading to an overstatement of program expenditures. For two (2) of the three (3) employees, the hours reported on the timesheets were greater than the hours recorded in SAP, leading to an understatement of program expenditures. In addition, we noted that one (1) employee provided a signed Periodic Certification that was signed subsequent to our request. Total exceptions for overstatement and understatement amounted to $820 and $350, respectively, of the $223,777 sampled from $487,522,973 of the total payroll expenditures. Total exceptions for untimely certifications amounted to $1,482. Our samples were statistically valid samples. Cause and Effect The untimely certifications appear to be incidents in which employees did not follow the District?s policies and procedures. The discrepancies between the time reports/timesheets and the SAP data appear to be due to clerical errors and lack of sufficient review. Questioned Costs The total costs related to the conditions mentioned above amounted to the following: Supporting Effective Instruction State Grants (Title II, Part A of the ESEA) (Assistance Listing No. 84.367): $4,906 overstatement and $683 understatement due to unsupported hours charged. Elementary and Secondary School Emergency Relief Fund (Assistance Listing No. 84.425D): $820 overstatement and $350 understatement due to unsupported hours charged. There were no questioned costs due to untimely completed/signed Periodic Certifications because payroll costs incurred were allowable costs for the programs. Repeat Finding This finding is a repeat finding as indicated in the Status of Prior Audit Findings and Recommendation as finding number F-2021-001. Recommendation We recommend that the District enhance its internal controls over payroll expenditures and the related compliance requirements by providing adequate and continuous training to school administrators, timekeepers, and supervisors on the required procedures to ensure the ongoing compliance requirements are being monitored. We also recommend that management responsible for each grant design and implement controls to review and approve the Multi-Funded Time Reports or timesheets prior to submission to the funding agency, and the review and approval are documented. View of Responsible Officials and Corrective Action Plan 1) Accounting Controls team will continue to coordinate with Central Office/program coordinators to: a) communicate the impact of questioned cost resulting from current year?s audit findings b) follow through on the sample testing performed on payroll documentations as a secondary control twice a year; and c) provide feedback and training to the schools based on the result of sample testing 2) Accounting Controls team will coordinate with the MyPLN team regarding the implementation of the annual Mandatory Time & Effort Training. This is a required 30-minute training of administrators, timekeepers, and supervisors with review questions at the end of the course, and requires a 100% correct answers before a certificate of completion will be issued. Name: Timothy Rosnick Title: Deputy Controller Telephone: (213) 241 -7989
Education Stabilization Fund CFDA # 84.425 Grant Period: 2021-22 U.S. Department of Education Pass-Through Entity: Pennsylvania Department of Education Finding 2022-001 - Allowable Costs/Cost Principles Criteria: If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition: A sample of 40 payroll transactions were selected for testing. There were no time and effort distribution records maintained to support the portion of time and effort dedicated to each funding source. Cause: The individual responsible for the federal program was not aware of the requirement to maintain time and effort documentation. Effect: The district receives federal funding based on allowable costs charged to the program. If documentation is not maintained to support the allowability of costs charged to the program, the district may be utilizing the funds for expenses which are unallowable. This may result in the return of federal funds to the funding agency for the unallowable costs, if deemed appropriate. Questioned Costs: Salary and benefits of employee - $12,267.41 Repeat Finding: No Context: Lack of time and effort distribution records. Recommendations: We recommend that controls be reviewed and revised to ensure that time and effort distribution records are prepared for staff who are charged to federal programs. These records should also be reviewed, approved, and maintained by administrative personnel.
Education Stabilization Fund CFDA # 84.425 Grant Period: 2021-22 U.S. Department of Education Pass-Through Entity: Pennsylvania Department of Education Finding 2022-001 - Allowable Costs/Cost Principles Criteria: If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition: A sample of 40 payroll transactions were selected for testing. There were no time and effort distribution records maintained to support the portion of time and effort dedicated to each funding source. Cause: The individual responsible for the federal program was not aware of the requirement to maintain time and effort documentation. Effect: The district receives federal funding based on allowable costs charged to the program. If documentation is not maintained to support the allowability of costs charged to the program, the district may be utilizing the funds for expenses which are unallowable. This may result in the return of federal funds to the funding agency for the unallowable costs, if deemed appropriate. Questioned Costs: Salary and benefits of employee - $12,267.41 Repeat Finding: No Context: Lack of time and effort distribution records. Recommendations: We recommend that controls be reviewed and revised to ensure that time and effort distribution records are prepared for staff who are charged to federal programs. These records should also be reviewed, approved, and maintained by administrative personnel.
Education Stabilization Fund CFDA # 84.425 Grant Period: 2021-22 U.S. Department of Education Pass-Through Entity: Pennsylvania Department of Education Finding 2022-001 - Allowable Costs/Cost Principles Criteria: If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition: A sample of 40 payroll transactions were selected for testing. There were no time and effort distribution records maintained to support the portion of time and effort dedicated to each funding source. Cause: The individual responsible for the federal program was not aware of the requirement to maintain time and effort documentation. Effect: The district receives federal funding based on allowable costs charged to the program. If documentation is not maintained to support the allowability of costs charged to the program, the district may be utilizing the funds for expenses which are unallowable. This may result in the return of federal funds to the funding agency for the unallowable costs, if deemed appropriate. Questioned Costs: Salary and benefits of employee - $12,267.41 Repeat Finding: No Context: Lack of time and effort distribution records. Recommendations: We recommend that controls be reviewed and revised to ensure that time and effort distribution records are prepared for staff who are charged to federal programs. These records should also be reviewed, approved, and maintained by administrative personnel.
Education Stabilization Fund CFDA # 84.425 Grant Period: 2021-22 U.S. Department of Education Pass-Through Entity: Pennsylvania Department of Education Finding 2022-001 - Allowable Costs/Cost Principles Criteria: If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition: A sample of 40 payroll transactions were selected for testing. There were no time and effort distribution records maintained to support the portion of time and effort dedicated to each funding source. Cause: The individual responsible for the federal program was not aware of the requirement to maintain time and effort documentation. Effect: The district receives federal funding based on allowable costs charged to the program. If documentation is not maintained to support the allowability of costs charged to the program, the district may be utilizing the funds for expenses which are unallowable. This may result in the return of federal funds to the funding agency for the unallowable costs, if deemed appropriate. Questioned Costs: Salary and benefits of employee - $12,267.41 Repeat Finding: No Context: Lack of time and effort distribution records. Recommendations: We recommend that controls be reviewed and revised to ensure that time and effort distribution records are prepared for staff who are charged to federal programs. These records should also be reviewed, approved, and maintained by administrative personnel.
Education Stabilization Fund CFDA # 84.425 Grant Period: 2021-22 U.S. Department of Education Pass-Through Entity: Pennsylvania Department of Education Finding 2022-001 - Allowable Costs/Cost Principles Criteria: If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition: A sample of 40 payroll transactions were selected for testing. There were no time and effort distribution records maintained to support the portion of time and effort dedicated to each funding source. Cause: The individual responsible for the federal program was not aware of the requirement to maintain time and effort documentation. Effect: The district receives federal funding based on allowable costs charged to the program. If documentation is not maintained to support the allowability of costs charged to the program, the district may be utilizing the funds for expenses which are unallowable. This may result in the return of federal funds to the funding agency for the unallowable costs, if deemed appropriate. Questioned Costs: Salary and benefits of employee - $12,267.41 Repeat Finding: No Context: Lack of time and effort distribution records. Recommendations: We recommend that controls be reviewed and revised to ensure that time and effort distribution records are prepared for staff who are charged to federal programs. These records should also be reviewed, approved, and maintained by administrative personnel.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022 ? 002 ? Elementary and Secondary School Emergency Relief Fund Activities Allowed or Unallowed & Allowable Costs/Cost Principles Federal Agency: U.S. Department of Education Federal Program Title: Elementary and Secondary School Emergency Relief Fund Assistance Listing Number: 84.425C, 84.425D, 84.425U Federal Award Identification Number and Year: FY 21 and FY 22 Pass-Through Entity: Indiana Department of Education Pass-Through Entity Number: S425C200018, S425D200013, S425U210013 Award Period: July 1, 2020 through June 30, 2022 Type of Finding: ? Material Weakness in Internal Control over Compliance, Material Noncompliance (Modified Opinion) Criteria: Per 2 CFR 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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, (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 (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: During our testing we noted the internal control process in place during the majority of the period was insufficient to ensure proper time and effort reviews were performed and documented, and to ensure that all expenditures were supported as allowable activities and allowable costs for the program in the audit period. Questioned costs: Known - $9,653.17, Likely - $299,904.00. Known and questioned costs exceed program materiality. Context: In a statistically valid sample, 14 of 14 selections were not supported by appropriate documentation to support the amounts charged to the grants. 14 of 14 selections did not have adequate time and effort documentation. Cause: Eastbrook Community School Corporation did not have a process implemented to track time and effort for the grant, as they believed that they were not required to. Effect: Activities or costs could be charged to a federal grant which do not meet the allowability standards, leading to noncompliance. Repeat Finding: No. Recommendation: We recommend the management ensure controls are consistently in place. Training over the organization's controls may be beneficial. View of Responsible Officials: There is no disagreement with the audit finding.
2022-002 ? Internal Controls over Compliance with Payroll Disbursements ? Significant Deficiency Federal Program Information: Funding Agency: Department of Agriculture Title: Child Nutrition Cluster Assistance Listing Number: 10.553, 10.555, 10.559 Pass Through Award Number: 21000 Pass Through Entity: State of NM PED Award Year: 2022 Condition: 2 out of 40 samples tested, the employees were not paid based on the approved salary schedule. Criteria: Per 2 CFR section 200.430(i) ? Compensation ? personal services ? Standards for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 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; (vii) Budget estimates (i.e. estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards. Per 2 CFR section 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). Effect: The District may unintentionally expense employee?s salary out of the Child Nutrition Cluster funding that does not qualify for Child Nutrition funding or more than what is applicable for the work performed by that employee for Child Nutrition program purposes. Cause: The District did not have proper controls in place to verify that employees were paid based on an approved salary. Auditors? Recommendation: The auditor recommends that the District implement controls for documenting and retaining information to indicate the District follows the requirements over 2 CFR section 200.430(i). Views of Responsible Officials of Auditee: The district will expand the internal controls over the timekeeping and payroll processes by requiring all employee pay applications for the Child Nutrition program be reviewed and approved by the Human Resources Department. A schedule of Pay Rates will be created and submitted to the Board of Education for formal approval, along with the other Salary Schedules approved with the annual budget. In addition, the district is moving to an electronic timekeeping system that will eliminate the use of paper timesheets that must be manually processed for payroll purposes. All Board approved pay rates will be programmed into the electronic timekeeping system so that the need for manual pay rate entry and gross pay calculations will be eliminated.
FINDING 2022-010 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, 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, S010A190014SIG Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure that proper documentation was retained for audit. A sample of forty transactions charged to the Title I grants during the audit period was selected for testing. The following errors were noted: 1. The School Corporation was unable to provide supporting documentation for three transactions, totaling $6,272. As such, these transactions were unable to be verified as allowable activities or costs for the Title I program. 2. Seven transactions, totaling $887, were for fringe benefit claims; however, the supporting documentation provided did not include details to identify the employees for which the benefits were paid. As a result, we were unable to determine if the payments were on behalf of allowable staff related to the Title I program. 3. Four transactions selected were for a Title I employee's payroll who did not have an approved hourly rate. The total amount of the four transactions paid to that employee was $4,261. 4. For two transactions tested, the payroll check register reported the employee was paid for more hours than was reported on their approved timecard. The additional amount paid to the employee was $1,374. Due to the number and magnitude of exceptions identified, per auditor judgment, we concluded it would not be appropriate to examine the remaining twenty-four transactions. The errors noted above were considered questioned costs. 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 controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items . . . (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); . . . (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. . . ." 2 CFR 200.309 states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs Known questioned costs of $12,794 were identified, as detailed in Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-010 Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, 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, S010A190014SIG Pass-Through Entity: Indiana Department of Education Compliance Requirements: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context The School Corporation had not properly designed or implemented a system of internal controls to ensure that proper documentation was retained for audit. A sample of forty transactions charged to the Title I grants during the audit period was selected for testing. The following errors were noted: 1. The School Corporation was unable to provide supporting documentation for three transactions, totaling $6,272. As such, these transactions were unable to be verified as allowable activities or costs for the Title I program. 2. Seven transactions, totaling $887, were for fringe benefit claims; however, the supporting documentation provided did not include details to identify the employees for which the benefits were paid. As a result, we were unable to determine if the payments were on behalf of allowable staff related to the Title I program. 3. Four transactions selected were for a Title I employee's payroll who did not have an approved hourly rate. The total amount of the four transactions paid to that employee was $4,261. 4. For two transactions tested, the payroll check register reported the employee was paid for more hours than was reported on their approved timecard. The additional amount paid to the employee was $1,374. Due to the number and magnitude of exceptions identified, per auditor judgment, we concluded it would not be appropriate to examine the remaining twenty-four transactions. The errors noted above were considered questioned costs. 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 controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 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 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass through entity in the case of a subrecipient. . . ." 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items . . . (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); . . . (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. . . ." 2 CFR 200.309 states: "A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance (except as described in ? 200.461 Publication and printing costs) and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity." Cause Management had not established an effective system of internal controls that would have ensured compliance, or that supporting documentation would have been maintained and made available for audit, with the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Effect The failure to establish an effective system of internal controls and to retain and provide appropriate supporting documentation prevented the determination of the School Corporation's compliance with the compliance requirements listed above. Questioned Costs Known questioned costs of $12,794 were identified, as detailed in Condition and Context. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure documentation be maintained and made available for audit related to the grant agreement and the Activities Allowed or Unallowed and the Allowable Costs/Cost Principles compliance requirements. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (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 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); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Cause: Management had not developed a system of internal control that 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: Known questioned costs of $47,835 were identified as detailed in the Context section. Context: Documentation supporting employees? time charged to the Child Nutrition Cluster program for custodians and a grant specialist was not properly maintained. Each employee had a specific percentage of their pay charged to the School Lunch fund, without documentation of a proper time study or actual hours worked on the program. The same percentage was used each pay period. Fringe benefits that were directly associated with the payroll were also charged to the program. The total amount charged to the program for these employees was $47,835. This amount was considered questioned costs. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation?s management establish a system of internal control to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (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 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); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Cause: Management had not developed a system of internal control that 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: Known questioned costs of $47,835 were identified as detailed in the Context section. Context: Documentation supporting employees? time charged to the Child Nutrition Cluster program for custodians and a grant specialist was not properly maintained. Each employee had a specific percentage of their pay charged to the School Lunch fund, without documentation of a proper time study or actual hours worked on the program. The same percentage was used each pay period. Fringe benefits that were directly associated with the payroll were also charged to the program. The total amount charged to the program for these employees was $47,835. This amount was considered questioned costs. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation?s management establish a system of internal control to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
FINDING 2022-002 Information on the federal program: Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Numbers and Years (or Other Identifying Numbers): FY2021, FY2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other Matters 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: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (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 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); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Condition: An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Cause: Management had not developed a system of internal control that 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: Known questioned costs of $47,835 were identified as detailed in the Context section. Context: Documentation supporting employees? time charged to the Child Nutrition Cluster program for custodians and a grant specialist was not properly maintained. Each employee had a specific percentage of their pay charged to the School Lunch fund, without documentation of a proper time study or actual hours worked on the program. The same percentage was used each pay period. Fringe benefits that were directly associated with the payroll were also charged to the program. The total amount charged to the program for these employees was $47,835. This amount was considered questioned costs. Identification as a repeat finding, if applicable: No. Recommendation: We recommended that the School Corporation?s management establish a system of internal control to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.
Program: Formula Grants for Rural Areas, COVID-19 Formula Grants for Rural Areas Federal Financial Assistance Number: 20.509 Federal Grantor: U.S. Department of Transportation ? Federal Transit Administration Passed-Through: State of California Department of Transportation Award No. and Year: 64RO21-01647 and 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.430, Compensation ? personal services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the program we noted instances in which employees were paid an additional amount of sick time during a pay period. Cause: Due to a programming error within ADP?s system, employee sick time hours that were coded on time-cards were doubled on MBTA?s payroll register. Effect: The programming error caused for excess costs to be incurred by MBTA. As payroll charges were fully allocated to the Federal program, the amount allocated also includes the excess amounts paid to employees. Questioned Costs: As a result of our procedures, we identified excess payments to employees in the amount of $527. However, the total amount caused by the data entry error was $756. Context/Sampling: A nonstatistical sample of 40 transactions out of approximately 988 transactions were selected for testing, which accounted for $77,983 of $2,251,472 of federal program expenditures. Repeat Finding from prior Year: No. Recommendation: We noted that MBTA revised its procedures to ensure system errors are identified prior to payroll being finalized and the programming error persisted for only a single pay period. However, we recommend that MBTA revise its Federal grant management procedures to ensure that costs incurred due to error or other types of unallowable costs are not included in subsequent reimbursement requests. View of Responsible Officials: Management agrees. See separately issued corrective action plan.
Program: Formula Grants for Rural Areas, COVID-19 Formula Grants for Rural Areas Federal Financial Assistance Number: 20.509 Federal Grantor: U.S. Department of Transportation ? Federal Transit Administration Passed-Through: State of California Department of Transportation Award No. and Year: 64RO21-01647 and 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.430, Compensation ? personal services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the program we noted instances in which employees were paid an additional amount of sick time during a pay period. Cause: Due to a programming error within ADP?s system, employee sick time hours that were coded on time-cards were doubled on MBTA?s payroll register. Effect: The programming error caused for excess costs to be incurred by MBTA. As payroll charges were fully allocated to the Federal program, the amount allocated also includes the excess amounts paid to employees. Questioned Costs: As a result of our procedures, we identified excess payments to employees in the amount of $527. However, the total amount caused by the data entry error was $756. Context/Sampling: A nonstatistical sample of 40 transactions out of approximately 988 transactions were selected for testing, which accounted for $77,983 of $2,251,472 of federal program expenditures. Repeat Finding from prior Year: No. Recommendation: We noted that MBTA revised its procedures to ensure system errors are identified prior to payroll being finalized and the programming error persisted for only a single pay period. However, we recommend that MBTA revise its Federal grant management procedures to ensure that costs incurred due to error or other types of unallowable costs are not included in subsequent reimbursement requests. View of Responsible Officials: Management agrees. See separately issued corrective action plan.
Finding 2022-007: Unallowable cost-salary allocation Repeat Finding Yes (2021-008) Federal Program Title: U.S. Department of Justice Passed through Illinois Criminal Justice Information Authority 16.575; Crime Victim Assistance Award Year Award# 219040: March 23, 2021 ? May 31, 2022 Criteria: Section C of the grant agreement budget from Illinois Criminal Justice Information Authority indicates approved individuals and positions with their approved salary allocation percentages. 2 CFR 200.430 requires that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: One employee?s salary was applied twice in the same reporting period. One employee?s expenditure was applied at an amount that was greater than the individual?s payroll support provided. Cause: Due to turnover in upper financial management, program oversight was not performed timely. Effect: Unallowable costs were submitted for reimbursement causing UCAN to be out of compliance with grant agreement budget Section C. Questioned costs: There was $1,458 in payroll applied twice in the same period and $500 in payroll expenses applied more than payroll support. Questioned costs totaled $3,585. Context: Out of 60 selections, one employee?s salary was applied twice in the same reporting period and one employee?s payroll expenditure was submitted for reimbursement at a higher amount than allowable per grant agreement. Recommendation: We recommend that management strengthen their internal controls over the salary amounts being charged to the program. Views of responsible officials: Management agrees with this finding. Please see corrective action plan attached.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.
Finding #: 2022-001 Federal Program: Research and Development Cluster Type of Finding: Allowable Costs/Cost Principles Criteria: In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, as provided in 2 CFR section 200.430(i), budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: 1. The system for establishing the estimates produces reasonable approximations of the activity actually performed; 2. Significant changes in the corresponding work activity (as defined by the non-Federal entity's written policies) are identified and entered into the records in a timely manner. Short term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and 3. The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. 2 CFR section 200.303 requires that federal award recipients establish and maintain internal control over federal awards that provides reasonable assurance that the recipient is managing the federal awards in compliance with federal statues, regulations, and the terms and conditions of the federal awards. Condition: The Foundation has a payroll system in place that requires hourly employees to submit time cards for approval by their direct supervisors. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. In our sample of timecards for hourly employees charged to Research and Development awards, there were multiple instances in which the time cards were not approved by the supervisor. Salaried employees are not required to submit time cards, and instead, the allocation of salaried employees? level of effort and payroll amount is determined during the budgeting phase. Documentation of an after-the-fact review to ensure that budgeted allocation was reflective of actual effort incurred was not retained as required by 2 CFR 200.430. Context: Of the $965,346 in expenditures coded to the Research and Development cluster of awards for the year ended June 30, 2022, $255,617 represented payroll costs. Cause: The Foundation has an established process and control procedures for approval of hourly employee?s costs charged to federal awards but that process was not followed consistently. The Foundation also has processes and procedures in place over salaried employees, however they were not documented to sufficiently support the provision under Uniform Guidance which requires an after-the-fact review of any budgeted payroll costs allocated to awards to ensure they are reflective of actual time incurred.Effect: Internal controls were not operating effectively. Questioned Costs: N/A Recommendation: We recommend that the Foundation strengthen controls to ensure adherence to its own established procedures for hourly employees and to supplement controls for salaried employees.