Finding 2022 001 Federal Program Title ? Research & Development Cluster (R&D) Assistance Listing Nos. ? As listed on the Schedule of Expenditures of Federal Awards Federal Agencies ? U.S. Department of Agriculture, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, Department of State, U.S. Department of Transportation, National Aeronautics and Space Administration, National Endowment for the Humanities, National Science Foundation, U.S. Department of Veterans Affairs, U.S. Department of Energy, U.S. Department of Education, and U.S. Department of Health and Human Services Federal Award Numbers ? As listed on the Schedule of Expenditures of Federal Awards Grant Award Periods ? Various Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Also, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University?s `Effort Reporting Policy? states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Additionally, as set forth in 2 CFR 200, the University is required to ensure allowable costs do not consist of improper payments, including payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments). Indirect costs are required to adhere to 2 CFR 200, Appendix III. Further, the National Institutes of Health (NIH) Grants Policy Statement section 7.5, Cost Transfers, Overruns, Accelerated and Delayed Expenditures, states that cost transfers to NIH grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. Documentation must be maintained of cost transfers, pursuant to 2 CFR Part 200.337 and 45 CFR Part 75.364. The recipient should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, recipients are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: While performing procedures related to personnel expenses, we noted the University had not followed their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our sixty sampled effort reports that had not been returned within the 30-calendar day policy. Total payroll and fringe totaled approximately $13,200,000 during fiscal year 2022. While performing procedures related to indirect costs, we noted three of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges during the University?s fiscal year ended June 30, 2022 for a total overstatement of $1,888 as noted below: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted indirect costs were overcharged for two of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class during the University?s fiscal year ended June 30, 2021 that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges. These overstatements were corrected during the University?s fiscal year ended June 30, 2022 for a total of $18,377 as noted below: See Schedule of Findings and Questioned Costs for chart/table Total indirect costs during fiscal year 2022 totaled approximately $8,360,000. While performing procedures related to cost transfers, we noted the University had not followed their `Cost Transfer Policy? which states ?Cost transfers for current transactions must occur on a timely basis?. The University?s cost transfer policy defines timely as ?occurring no later than two accounting periods after the month end of the date of the original transaction (no later than 90 days total)?. The University did not have an effective system of internal control in place to timely discover errors and get them corrected as we noted thirty-two of our sixty-seven sampled cost transfers (totaling $3,153,441 positive and $2,900,348 negative) where the cost transfer date was between 91 and 581 days past the date the original expenditure was incurred (21 were between 91 and 180 days past, 6 were between 181 and 270 days past, and 5 were greater than 271 days past). While testing cost transfers, we noted the following exceptions: We noted a transaction which was originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class that did not allow F&A costs to be applied: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted a transaction recorded to a grant that exceeded the amount of the award resulting in the costs being unallowable to the grant: See Schedule of Findings and Questioned Costs for chart/table Positive cost transfers were approximately $4,060,000 and negative cost transfers were $3,510,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that during fiscal year 2022, they continued reconciliation procedures related to `grant level? activity as a result of implementing the grants module of Workday in the previous fiscal year. Grant level activity allows them to track the specific budget provided by the individual R&D Cluster agreement as well as monitor other key compliance requirement aspects. The University continued to process an increased volume of cost transfers and experienced delays in posting necessary cost transfers for identified unallowable costs stemming from the reconciliation efforts. Repeat Finding: A similar finding was reported in prior year audit as finding number 2021 001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University take a fresh look at its processes, policies and internal controls to determine what is needed, post Workday implementation, to prevent and detect noncompliance with activities allowed and unallowed and adherence to allowable cost principles/cost principles. Additionally, we recommend the University determine and address the underlying root cause that is contributing to the volume of cost transfers and take necessary action to prevent unallowable costs from posting to the grant. We also recommend the University consider implementation of an automated control to ensure F&A is charged appropriately when cost transfer entries are made. Lastly, we recommend the University determine what additional Workday automated reporting is available to monitor compliance for personnel expenses, including effort verification reporting, F&A, etc. for activities allowed or unallowed and allowable costs/cost principles.
Finding 2022 001 Federal Program Title ? Research & Development Cluster (R&D) Assistance Listing Nos. ? As listed on the Schedule of Expenditures of Federal Awards Federal Agencies ? U.S. Department of Agriculture, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, Department of State, U.S. Department of Transportation, National Aeronautics and Space Administration, National Endowment for the Humanities, National Science Foundation, U.S. Department of Veterans Affairs, U.S. Department of Energy, U.S. Department of Education, and U.S. Department of Health and Human Services Federal Award Numbers ? As listed on the Schedule of Expenditures of Federal Awards Grant Award Periods ? Various Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Also, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University?s `Effort Reporting Policy? states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Additionally, as set forth in 2 CFR 200, the University is required to ensure allowable costs do not consist of improper payments, including payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments). Indirect costs are required to adhere to 2 CFR 200, Appendix III. Further, the National Institutes of Health (NIH) Grants Policy Statement section 7.5, Cost Transfers, Overruns, Accelerated and Delayed Expenditures, states that cost transfers to NIH grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. Documentation must be maintained of cost transfers, pursuant to 2 CFR Part 200.337 and 45 CFR Part 75.364. The recipient should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, recipients are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: While performing procedures related to personnel expenses, we noted the University had not followed their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our sixty sampled effort reports that had not been returned within the 30-calendar day policy. Total payroll and fringe totaled approximately $13,200,000 during fiscal year 2022. While performing procedures related to indirect costs, we noted three of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges during the University?s fiscal year ended June 30, 2022 for a total overstatement of $1,888 as noted below: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted indirect costs were overcharged for two of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class during the University?s fiscal year ended June 30, 2021 that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges. These overstatements were corrected during the University?s fiscal year ended June 30, 2022 for a total of $18,377 as noted below: See Schedule of Findings and Questioned Costs for chart/table Total indirect costs during fiscal year 2022 totaled approximately $8,360,000. While performing procedures related to cost transfers, we noted the University had not followed their `Cost Transfer Policy? which states ?Cost transfers for current transactions must occur on a timely basis?. The University?s cost transfer policy defines timely as ?occurring no later than two accounting periods after the month end of the date of the original transaction (no later than 90 days total)?. The University did not have an effective system of internal control in place to timely discover errors and get them corrected as we noted thirty-two of our sixty-seven sampled cost transfers (totaling $3,153,441 positive and $2,900,348 negative) where the cost transfer date was between 91 and 581 days past the date the original expenditure was incurred (21 were between 91 and 180 days past, 6 were between 181 and 270 days past, and 5 were greater than 271 days past). While testing cost transfers, we noted the following exceptions: We noted a transaction which was originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class that did not allow F&A costs to be applied: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted a transaction recorded to a grant that exceeded the amount of the award resulting in the costs being unallowable to the grant: See Schedule of Findings and Questioned Costs for chart/table Positive cost transfers were approximately $4,060,000 and negative cost transfers were $3,510,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that during fiscal year 2022, they continued reconciliation procedures related to `grant level? activity as a result of implementing the grants module of Workday in the previous fiscal year. Grant level activity allows them to track the specific budget provided by the individual R&D Cluster agreement as well as monitor other key compliance requirement aspects. The University continued to process an increased volume of cost transfers and experienced delays in posting necessary cost transfers for identified unallowable costs stemming from the reconciliation efforts. Repeat Finding: A similar finding was reported in prior year audit as finding number 2021 001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University take a fresh look at its processes, policies and internal controls to determine what is needed, post Workday implementation, to prevent and detect noncompliance with activities allowed and unallowed and adherence to allowable cost principles/cost principles. Additionally, we recommend the University determine and address the underlying root cause that is contributing to the volume of cost transfers and take necessary action to prevent unallowable costs from posting to the grant. We also recommend the University consider implementation of an automated control to ensure F&A is charged appropriately when cost transfer entries are made. Lastly, we recommend the University determine what additional Workday automated reporting is available to monitor compliance for personnel expenses, including effort verification reporting, F&A, etc. for activities allowed or unallowed and allowable costs/cost principles.
Finding 2022 001 Federal Program Title ? Research & Development Cluster (R&D) Assistance Listing Nos. ? As listed on the Schedule of Expenditures of Federal Awards Federal Agencies ? U.S. Department of Agriculture, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, Department of State, U.S. Department of Transportation, National Aeronautics and Space Administration, National Endowment for the Humanities, National Science Foundation, U.S. Department of Veterans Affairs, U.S. Department of Energy, U.S. Department of Education, and U.S. Department of Health and Human Services Federal Award Numbers ? As listed on the Schedule of Expenditures of Federal Awards Grant Award Periods ? Various Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Also, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University?s `Effort Reporting Policy? states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Additionally, as set forth in 2 CFR 200, the University is required to ensure allowable costs do not consist of improper payments, including payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments). Indirect costs are required to adhere to 2 CFR 200, Appendix III. Further, the National Institutes of Health (NIH) Grants Policy Statement section 7.5, Cost Transfers, Overruns, Accelerated and Delayed Expenditures, states that cost transfers to NIH grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. Documentation must be maintained of cost transfers, pursuant to 2 CFR Part 200.337 and 45 CFR Part 75.364. The recipient should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, recipients are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: While performing procedures related to personnel expenses, we noted the University had not followed their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our sixty sampled effort reports that had not been returned within the 30-calendar day policy. Total payroll and fringe totaled approximately $13,200,000 during fiscal year 2022. While performing procedures related to indirect costs, we noted three of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges during the University?s fiscal year ended June 30, 2022 for a total overstatement of $1,888 as noted below: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted indirect costs were overcharged for two of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class during the University?s fiscal year ended June 30, 2021 that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges. These overstatements were corrected during the University?s fiscal year ended June 30, 2022 for a total of $18,377 as noted below: See Schedule of Findings and Questioned Costs for chart/table Total indirect costs during fiscal year 2022 totaled approximately $8,360,000. While performing procedures related to cost transfers, we noted the University had not followed their `Cost Transfer Policy? which states ?Cost transfers for current transactions must occur on a timely basis?. The University?s cost transfer policy defines timely as ?occurring no later than two accounting periods after the month end of the date of the original transaction (no later than 90 days total)?. The University did not have an effective system of internal control in place to timely discover errors and get them corrected as we noted thirty-two of our sixty-seven sampled cost transfers (totaling $3,153,441 positive and $2,900,348 negative) where the cost transfer date was between 91 and 581 days past the date the original expenditure was incurred (21 were between 91 and 180 days past, 6 were between 181 and 270 days past, and 5 were greater than 271 days past). While testing cost transfers, we noted the following exceptions: We noted a transaction which was originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class that did not allow F&A costs to be applied: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted a transaction recorded to a grant that exceeded the amount of the award resulting in the costs being unallowable to the grant: See Schedule of Findings and Questioned Costs for chart/table Positive cost transfers were approximately $4,060,000 and negative cost transfers were $3,510,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that during fiscal year 2022, they continued reconciliation procedures related to `grant level? activity as a result of implementing the grants module of Workday in the previous fiscal year. Grant level activity allows them to track the specific budget provided by the individual R&D Cluster agreement as well as monitor other key compliance requirement aspects. The University continued to process an increased volume of cost transfers and experienced delays in posting necessary cost transfers for identified unallowable costs stemming from the reconciliation efforts. Repeat Finding: A similar finding was reported in prior year audit as finding number 2021 001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University take a fresh look at its processes, policies and internal controls to determine what is needed, post Workday implementation, to prevent and detect noncompliance with activities allowed and unallowed and adherence to allowable cost principles/cost principles. Additionally, we recommend the University determine and address the underlying root cause that is contributing to the volume of cost transfers and take necessary action to prevent unallowable costs from posting to the grant. We also recommend the University consider implementation of an automated control to ensure F&A is charged appropriately when cost transfer entries are made. Lastly, we recommend the University determine what additional Workday automated reporting is available to monitor compliance for personnel expenses, including effort verification reporting, F&A, etc. for activities allowed or unallowed and allowable costs/cost principles.
Finding 2022 001 Federal Program Title ? Research & Development Cluster (R&D) Assistance Listing Nos. ? As listed on the Schedule of Expenditures of Federal Awards Federal Agencies ? U.S. Department of Agriculture, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, Department of State, U.S. Department of Transportation, National Aeronautics and Space Administration, National Endowment for the Humanities, National Science Foundation, U.S. Department of Veterans Affairs, U.S. Department of Energy, U.S. Department of Education, and U.S. Department of Health and Human Services Federal Award Numbers ? As listed on the Schedule of Expenditures of Federal Awards Grant Award Periods ? Various Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Also, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University?s `Effort Reporting Policy? states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Additionally, as set forth in 2 CFR 200, the University is required to ensure allowable costs do not consist of improper payments, including payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments). Indirect costs are required to adhere to 2 CFR 200, Appendix III. Further, the National Institutes of Health (NIH) Grants Policy Statement section 7.5, Cost Transfers, Overruns, Accelerated and Delayed Expenditures, states that cost transfers to NIH grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. Documentation must be maintained of cost transfers, pursuant to 2 CFR Part 200.337 and 45 CFR Part 75.364. The recipient should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, recipients are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: While performing procedures related to personnel expenses, we noted the University had not followed their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our sixty sampled effort reports that had not been returned within the 30-calendar day policy. Total payroll and fringe totaled approximately $13,200,000 during fiscal year 2022. While performing procedures related to indirect costs, we noted three of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges during the University?s fiscal year ended June 30, 2022 for a total overstatement of $1,888 as noted below: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted indirect costs were overcharged for two of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class during the University?s fiscal year ended June 30, 2021 that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges. These overstatements were corrected during the University?s fiscal year ended June 30, 2022 for a total of $18,377 as noted below: See Schedule of Findings and Questioned Costs for chart/table Total indirect costs during fiscal year 2022 totaled approximately $8,360,000. While performing procedures related to cost transfers, we noted the University had not followed their `Cost Transfer Policy? which states ?Cost transfers for current transactions must occur on a timely basis?. The University?s cost transfer policy defines timely as ?occurring no later than two accounting periods after the month end of the date of the original transaction (no later than 90 days total)?. The University did not have an effective system of internal control in place to timely discover errors and get them corrected as we noted thirty-two of our sixty-seven sampled cost transfers (totaling $3,153,441 positive and $2,900,348 negative) where the cost transfer date was between 91 and 581 days past the date the original expenditure was incurred (21 were between 91 and 180 days past, 6 were between 181 and 270 days past, and 5 were greater than 271 days past). While testing cost transfers, we noted the following exceptions: We noted a transaction which was originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class that did not allow F&A costs to be applied: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted a transaction recorded to a grant that exceeded the amount of the award resulting in the costs being unallowable to the grant: See Schedule of Findings and Questioned Costs for chart/table Positive cost transfers were approximately $4,060,000 and negative cost transfers were $3,510,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that during fiscal year 2022, they continued reconciliation procedures related to `grant level? activity as a result of implementing the grants module of Workday in the previous fiscal year. Grant level activity allows them to track the specific budget provided by the individual R&D Cluster agreement as well as monitor other key compliance requirement aspects. The University continued to process an increased volume of cost transfers and experienced delays in posting necessary cost transfers for identified unallowable costs stemming from the reconciliation efforts. Repeat Finding: A similar finding was reported in prior year audit as finding number 2021 001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University take a fresh look at its processes, policies and internal controls to determine what is needed, post Workday implementation, to prevent and detect noncompliance with activities allowed and unallowed and adherence to allowable cost principles/cost principles. Additionally, we recommend the University determine and address the underlying root cause that is contributing to the volume of cost transfers and take necessary action to prevent unallowable costs from posting to the grant. We also recommend the University consider implementation of an automated control to ensure F&A is charged appropriately when cost transfer entries are made. Lastly, we recommend the University determine what additional Workday automated reporting is available to monitor compliance for personnel expenses, including effort verification reporting, F&A, etc. for activities allowed or unallowed and allowable costs/cost principles.
Finding 2022 001 Federal Program Title ? Research & Development Cluster (R&D) Assistance Listing Nos. ? As listed on the Schedule of Expenditures of Federal Awards Federal Agencies ? U.S. Department of Agriculture, U.S. Department of Commerce, U.S. Department of Defense, U.S. Department of Interior, U.S. Department of Justice, Department of State, U.S. Department of Transportation, National Aeronautics and Space Administration, National Endowment for the Humanities, National Science Foundation, U.S. Department of Veterans Affairs, U.S. Department of Energy, U.S. Department of Education, and U.S. Department of Health and Human Services Federal Award Numbers ? As listed on the Schedule of Expenditures of Federal Awards Grant Award Periods ? Various Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Also, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University?s `Effort Reporting Policy? states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Additionally, as set forth in 2 CFR 200, the University is required to ensure allowable costs do not consist of improper payments, including payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments). Indirect costs are required to adhere to 2 CFR 200, Appendix III. Further, the National Institutes of Health (NIH) Grants Policy Statement section 7.5, Cost Transfers, Overruns, Accelerated and Delayed Expenditures, states that cost transfers to NIH grants that represent corrections of clerical or bookkeeping errors should be accomplished within 90 days of when the error was discovered. The transfers must be supported by documentation that fully explains how the error occurred and a certification of the correctness of the new charge by a responsible organizational official. Documentation must be maintained of cost transfers, pursuant to 2 CFR Part 200.337 and 45 CFR Part 75.364. The recipient should have systems in place to detect such errors within a reasonable time frame; untimely discovery of errors could be an indication of poor internal controls. Frequent errors in recording costs may indicate the need for accounting system improvements, enhanced internal controls, or both. If such errors occur, recipients are encouraged to evaluate the need for improvements and to make whatever improvements are deemed necessary to prevent reoccurrence. Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: While performing procedures related to personnel expenses, we noted the University had not followed their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our sixty sampled effort reports that had not been returned within the 30-calendar day policy. Total payroll and fringe totaled approximately $13,200,000 during fiscal year 2022. While performing procedures related to indirect costs, we noted three of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges during the University?s fiscal year ended June 30, 2022 for a total overstatement of $1,888 as noted below: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted indirect costs were overcharged for two of forty sampled grants (totaling $3,385,750) where transactions were originally recorded to an incorrect object class during the University?s fiscal year ended June 30, 2021 that resulted in F&A being applied to the grant instead of to the correct object class which resulted in overcharges. These overstatements were corrected during the University?s fiscal year ended June 30, 2022 for a total of $18,377 as noted below: See Schedule of Findings and Questioned Costs for chart/table Total indirect costs during fiscal year 2022 totaled approximately $8,360,000. While performing procedures related to cost transfers, we noted the University had not followed their `Cost Transfer Policy? which states ?Cost transfers for current transactions must occur on a timely basis?. The University?s cost transfer policy defines timely as ?occurring no later than two accounting periods after the month end of the date of the original transaction (no later than 90 days total)?. The University did not have an effective system of internal control in place to timely discover errors and get them corrected as we noted thirty-two of our sixty-seven sampled cost transfers (totaling $3,153,441 positive and $2,900,348 negative) where the cost transfer date was between 91 and 581 days past the date the original expenditure was incurred (21 were between 91 and 180 days past, 6 were between 181 and 270 days past, and 5 were greater than 271 days past). While testing cost transfers, we noted the following exceptions: We noted a transaction which was originally recorded to an incorrect object class that resulted in F&A being applied to the grant instead of to the correct object class that did not allow F&A costs to be applied: See Schedule of Findings and Questioned Costs for chart/table Additionally, we noted a transaction recorded to a grant that exceeded the amount of the award resulting in the costs being unallowable to the grant: See Schedule of Findings and Questioned Costs for chart/table Positive cost transfers were approximately $4,060,000 and negative cost transfers were $3,510,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that during fiscal year 2022, they continued reconciliation procedures related to `grant level? activity as a result of implementing the grants module of Workday in the previous fiscal year. Grant level activity allows them to track the specific budget provided by the individual R&D Cluster agreement as well as monitor other key compliance requirement aspects. The University continued to process an increased volume of cost transfers and experienced delays in posting necessary cost transfers for identified unallowable costs stemming from the reconciliation efforts. Repeat Finding: A similar finding was reported in prior year audit as finding number 2021 001. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University take a fresh look at its processes, policies and internal controls to determine what is needed, post Workday implementation, to prevent and detect noncompliance with activities allowed and unallowed and adherence to allowable cost principles/cost principles. Additionally, we recommend the University determine and address the underlying root cause that is contributing to the volume of cost transfers and take necessary action to prevent unallowable costs from posting to the grant. We also recommend the University consider implementation of an automated control to ensure F&A is charged appropriately when cost transfer entries are made. Lastly, we recommend the University determine what additional Workday automated reporting is available to monitor compliance for personnel expenses, including effort verification reporting, F&A, etc. for activities allowed or unallowed and allowable costs/cost principles.
Finding 2022 011 Federal Program Title ? COVID-19 - National Organizations of State and Local Officials Assistance Listing No. ? 93.011 Federal Agency ? U.S. Department of Health and Human Services Federal Award Numbers ? 1 U3SHS42192-01-00 and 1 G32HS42670-01-00 Grant Award Periods ? June 1, 2021 to August 31, 2022 and July 31, 2021 to October 31, 2022, respectively Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Additionally, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University did not follow their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: The University did not adhere to the HHS Grants Policy which requires after-the-fact activity reports. Additionally, the University did not adhere to their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our fourteen sampled effort verification reports that were noncompliant. One effort verification report was not certified as the employee resigned and an effort verification report was not initiated as part of their exit procedures. Additionally, the employee?s supervisor also resigned. Lastly, one effort verification report was not certified within the 30-calendar day policy. Total payroll and fringe totaled approximately $320,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that there was a missing management review control to prevent noncompliance specific to the timeliness of the certifications of effort reports contributed to the noncompliance with the activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Repeat Finding: A similar finding was not reported in prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University enhance its internal control process to ensure the University has effective internal controls in place to ensure that certification of effort reports complies with both federal requirements and University policy. Additionally, we recommend the University take a fresh look at policies and procedures in place when an employee resigns to consider whether exit procedures should include the initiation and certification of an effort verification report prior to departure.
Finding 2022 011 Federal Program Title ? COVID-19 - National Organizations of State and Local Officials Assistance Listing No. ? 93.011 Federal Agency ? U.S. Department of Health and Human Services Federal Award Numbers ? 1 U3SHS42192-01-00 and 1 G32HS42670-01-00 Grant Award Periods ? June 1, 2021 to August 31, 2022 and July 31, 2021 to October 31, 2022, respectively Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Additionally, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University did not follow their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: The University did not adhere to the HHS Grants Policy which requires after-the-fact activity reports. Additionally, the University did not adhere to their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our fourteen sampled effort verification reports that were noncompliant. One effort verification report was not certified as the employee resigned and an effort verification report was not initiated as part of their exit procedures. Additionally, the employee?s supervisor also resigned. Lastly, one effort verification report was not certified within the 30-calendar day policy. Total payroll and fringe totaled approximately $320,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that there was a missing management review control to prevent noncompliance specific to the timeliness of the certifications of effort reports contributed to the noncompliance with the activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Repeat Finding: A similar finding was not reported in prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University enhance its internal control process to ensure the University has effective internal controls in place to ensure that certification of effort reports complies with both federal requirements and University policy. Additionally, we recommend the University take a fresh look at policies and procedures in place when an employee resigns to consider whether exit procedures should include the initiation and certification of an effort verification report prior to departure.
Finding 2022 011 Federal Program Title ? COVID-19 - National Organizations of State and Local Officials Assistance Listing No. ? 93.011 Federal Agency ? U.S. Department of Health and Human Services Federal Award Numbers ? 1 U3SHS42192-01-00 and 1 G32HS42670-01-00 Grant Award Periods ? June 1, 2021 to August 31, 2022 and July 31, 2021 to October 31, 2022, respectively Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles Criteria: 2 CFR 200.430 includes the standards for documentation of personnel expenses. According to 2 CFR 200.430(i)(1), charges to federal awards for salary and wages must be based on records that accurately reflect the work performed. Among other requirements within 2 CFR 200.430(i)(1), section (i) states records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and section (v) states that the records must comply with established accounting policies and practices. Additionally, the HHS Grants Policy for educational institutions requires a plan confirmation system (system) for professorial and other professional staff members that is based on budgeted, planned, or assigned work activity and that is updated to reflect any significant changes in work distribution. The system must be incorporated into the organization?s official records and must identify activity applicable to each sponsored agreement and to each category needed to identify indirect costs and the functions to which they are allocable. At least annually, the employee, principal investigator, or responsible official will verify, by suitable means, that the work was performed and that the salaries and wages charged to sponsored agreements, whether as direct charges or in other categories of cost, are reasonable in relation to the work performed. A system, supported by after-the-fact activity reports, that reflects the distribution of covered employees? activity allocable to each grant and includes identification and recording of significant changes in work activity when initial charges were based on estimates. For professorial and other professional staff members, the activity reports will be prepared each academic term, but at least every 6 months. The University did not follow their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? Lastly, 2 CFR 200.303 requires nonfederal entities to, among other things, 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. Conditions Found: The University did not adhere to the HHS Grants Policy which requires after-the-fact activity reports. Additionally, the University did not adhere to their `Effort Reporting Policy? which states ?Subjects must return the certified effort verification report no later than 30 calendar days after they have been distributed.? We noted two of our fourteen sampled effort verification reports that were noncompliant. One effort verification report was not certified as the employee resigned and an effort verification report was not initiated as part of their exit procedures. Additionally, the employee?s supervisor also resigned. Lastly, one effort verification report was not certified within the 30-calendar day policy. Total payroll and fringe totaled approximately $320,000 during fiscal year 2022. The University did not have an effective system of internal control in place to ensure compliance with activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Questioned Cost: Questioned costs are not determinable. Cause and Effect: In discussing these conditions with University management, they stated that there was a missing management review control to prevent noncompliance specific to the timeliness of the certifications of effort reports contributed to the noncompliance with the activities allowed/unallowed and allowable costs/cost principles specific to effort reporting. Repeat Finding: A similar finding was not reported in prior year. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendations: We recommend the University enhance its internal control process to ensure the University has effective internal controls in place to ensure that certification of effort reports complies with both federal requirements and University policy. Additionally, we recommend the University take a fresh look at policies and procedures in place when an employee resigns to consider whether exit procedures should include the initiation and certification of an effort verification report prior to departure.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
2022-049 The Department of Children, Youth, and Families did not have adequate internal controls over and did not comply with some Public Assistance Cost Allocation Plan requirements. Assistance Listing Number and Title: 93.658 Foster Care Title IV-E 93.658 COVID-19 Foster Care Title IV-E 93.659 Adoption Assistance 93.659 COVID-19 Adoption Assistance Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: 2102WAFOST; 2202WAFOST; 2102WAADPT; 2202WAADPT Pass-through Entity Name: None Pass-through Award/Contract Number: None Applicable Compliance Component: Activities Allowed or Unallowed Allowable Costs/Cost Principles Known Questioned Cost Amount: None Background The Department of Children, Youth, and Families uses the Random Moment Time Study (RMTS) to allocate costs for its headquarters and regional operations to the proper state and federal programs. Department staff generally work on multiple programs and cases throughout a workday, which makes maintaining a timesheet difficult and time consuming. The RMTS simplifies how the Department allocates the cost of time and effort to state and federal programs. The RMTS is a sampling tool that the Department uses to generate statistically valid statewide estimates of various activities employees have performed. The Department also uses a system called FamLink, which allows staff to work on client cases, document information, generate samples and compile RMTS results. The Department?s use of the RMTS is included in its Public Assistance Cost Allocation Plan (PACAP) with the federal grantor. The PACAP is approved annually and outlines the general operating policies and procedures that the RMTS staff must follow. For the RMTS to properly calculate the percentages of activities Department staff have performed, it must start by identifying a sampling universe that is accurate and complete. The sampling universe lists the eligible worker types to be included and is updated monthly to ensure all eligible workers are included in the sample. The RMTS Coordinators and RMTS Headquarters (HQ) are responsible for keeping the list of sample workers current. To ensure the sample worker population is complete, the RMTS HQ runs the worker report, filters it, and then communicates the report to the RMTS Coordinators to verify proper workers are included, excluded, or documented with the right worker type to maintain an accurate RMTS population. The RMTS Coordinators send the RMTS HQ emails informing them of the changes that need to be made to assigned workers and the unassigned workers. The RMTS HQ will then update the workers? profiles in FamLink as updates come in. Sampled workers are responsible for completing an accurate and timely RMTS sample within three business days. The RMTS HQ performs a quality control review of all completed samples to ensure staff are completing them correctly. At the end of the month, the Department uses FamLink to summarize the sample results for the month. The results are then compiled and used to fill out the Cost Allocation Base Data Input Sheets for each RMTS base. The results are then entered into the Cost Allocation System. During fiscal year 2022, the Department used the RMTS to allocate about $34.8 million to the Foster Care-Title IV-E and Adoption Assistance programs. Federal regulations require recipients to establish and follow internal controls that ensure compliance with program requirements. These controls include understanding program requirements and monitoring the effectiveness of established controls. In the prior three audits, we reported the Department did not have adequate internal controls over and did not comply with some PACAP requirements. The prior finding numbers are 2021-042, 2020-044 and 2019-044. Description of Condition The Department did not have adequate internal controls over and did not comply with some PACAP requirements. We randomly selected five out of the 12 monthly employee updates to determine whether the sampling universe was complete. The RMTS HQ Program Manager is responsible for creating monthly employee reports that show current staff who are in the sampling population, as well as a report of employees who may be RMTS eligible. The Program Manager forwards these reports to the RMTS Coordinators asking for updates of employees on each report. Once the Program Manager receives the RMTS Coordinators? responses, the Program Manager updates FamLink to ensure the sampling universe is complete. For all five of the sampled months that we examined, the Department was unable to demonstrate the RMTS sampling universe was completed due to a lack of documentation. We consider these internal control deficiencies to be a material weakness, which led to material noncompliance. Cause of Condition The Department did not retain documentation detailing which workers were added and removed from the sampling universe each month. Because of this, it was not possible to verify the completeness of the RMTS population. Effect of Condition The Department?s inadequate internal controls affected the integrity of its RMTS sampling universe. An erroneous sample could cause the costs the Department has charged to federally funded programs for its headquarters and regional operations to be unallowable, according to the PACAP. Recommendation We recommend the Department ensure staff follow its own established procedures to ensure RMTS sampling populations are accurate and complete. Department?s Response The Department maintains that the sampling universe is accurate and complete. There is not a deficiency with the integrity of the RMTS sample and the Department complies with federal requirements. The Department?s RMTS instructions included in the federally approved Public Assistance Cost Allocation Plan (PACAP) are more restrictive than federal requirements. Communication with the Regional RMTS Coordinators occurs regularly and cost pools are updated within the parameters identified within the RMTS instructions. The HQ RMTS Coordinator pulls three monthly reports from FamLink, the Child Welfare case management system, which the RMTS is a component of, and the Human Resource Management System to verify worker eligibility and proper classification to strengthen the internal controls around RMTS samples pulled. For these reasons, the Department maintains the position that the sampling universe complies with federal regulations. The Department contracted with the University of Massachusetts, effective October 2022, for the design and implementation of the RMTS mechanism. The Department has updated the RMTS instructions in the PACAP based on the new quarterly process implemented under the University of Massachusetts contract. The new process remains in compliance with federal law while alleviating the department-imposed restrictions and addresses the auditor?s concerns regarding the internal controls applicable to the RMTS worker types included in the sampling universe. Auditor?s Remarks Our audit procedures were designed to determine whether the Department charged only allowable costs to federal grants in compliance with their approved PACAP and federal law. Two CFR 200.430 requires the following: ? The sampling universe must include all employees whose salaries and wages are to be allocated based on sample results ? The entire time period involved must be covered by the sample ? The results must be statistically valid and applied to the period being sampled. During the audit period, the Department was unable to provide sufficient documentation showing the sampling universe was complete. We reaffirm our finding, and we will follow up on the Department?s corrective action during the next audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 303, Internal controls, describes the requirements for auditees to maintain internal controls over federal programs and comply with federal program requirements. Title 2 CFR Part 200, Uniform Guidance, section 516, Audit findings, establishes reporting requirements for audit findings. The American Institute of Certified Public Accountants defines significant deficiencies and material weaknesses in its Codification of Statements on Auditing Standards, section 935, Compliance Audits, paragraph 11. Department of Children Youth and Families Public Assistance Cost Allocation Plan, RMTS Program Instructions, page 37, states in part: Headquarters RMTS staff shall be responsible for the following actions: Overseeing the system?s monthly batching of new samples which includes three variables: ? Random Moment Starting Time ? Random Interval Time Random ? Employee List The Headquarters RMTS Staff work with the RMTS Coordinators in order to keep the list of sampled workers current. Worker employment status changes should be reported by the social workers? supervisors to RMTS Coordinators. In addition, HQ Staff need to verify that each worker has an RMTS Worker Type associated with him or her and an RMTS Group linking the worker to his or her coordinator. The Regional RMTS Coordinator shall be responsible for the following actions: Notify HQ RMTS Staff of any updates to their worker list when there is any change in employment status of a worker participating in the RMTS survey within five working days of change. In addition, the coordinator needs to provide HQ RMTS Staff with an appropriate RMTS Worker Type code for each worker added to the system.
Finding Number 2022-005 Education Stabilization Fund: Elementary and Secondary School Emergency Relief (ESSER) Assistance Listing Number 84.425D Allowable Costs/Cost Principles ? Documentation of Employee Time and Effort Immaterial Noncompliance Criteria: Per Federal regulations 2 CFR section 200.430(i)(1)(vii), the School District must maintain time and effort distribution records for an employee who works in part on the consolidated administrative cost objective and in part on a federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources. Condition: The School District did not maintain time and effort distribution records for employees who were partially funded with ESSER Federal funds. Cause: Oversight. Effect: Time and effort reports were not completed. Questioned Costs: None. Recommendation: Time and effort reports should be completed throughout the year listing the employees name, position or job title, and percentage of time spent on each Federal award and signed by the employee?s supervisor. Management's Response and Corrective Actions: The Director of Finance and Superintendent completed time and effort reports for the ESSER funds expended for fiscal year ending June 30, 2022 and will continue to complete time and effort reports going forward. Person Responsible for Corrective Action: Justin Weston, Director of Finance, and Amiee Erfourth, Superintendent Completion Date: November 21, 2022.
SIGNIFICANT DEFICIENCY Finding: 2022-004 Agency: U.S. Department of Education Program: Elementary and Secondary School Emergency Relief (ESSER) Fund Federal Assistance Listing Number: 84.425D ALLOWABLE COSTS/COST PRINCIPLES Criteria: 2 CFR Part 200 Subpart E, Cost Principles, states that compensation for employees engaged in work on Federal awards must be documented as provided in 2 CFR Section 200.430(i). Although 2 CFR Section 200.430(i) does not specifically require semi-annual certifications, the Foster-Glocester Regional School District has a policy in place for time and effort reporting on Federal grant programs. The policy requires semi-annual certifications for employees charged to Federal grants working on a single cost objective. Condition: During our test of controls over compliance with allowable costs/cost principles requirements, we noted that the required semi-annual certifications were not completed for employees working on a single cost objective during fiscal year 2022. Cause: The School District did not follow its established time and effort reporting policies and procedures. Effect: The School District did not have the required documentation on file for employees charged to a single cost objective in conformance with the School District?s policy. Questioned Costs: None Recommendation: We recommend that the School District follow established time and effort reporting procedures to ensure that proper documentation is maintained for employees engaged in work on Federal grant programs. Corrective Action/Auditee Views: The District?s payroll process is significantly lacking proper control procedures. With the hiring of a new financial manager, policies, procedures and controls will be implemented immediately, including the proper tracking of time and effort for employees charged to federal grants as required. Anticipated Completion Date: September 1, 2023 Contact Person: Amanda Raymond, Director of Finance
Assistance Listing Number: 84.367 Program Title: Title II Improving Teacher Quality - Staff Development Federal Award Number: Not applicable Federal Award Year: 2021/2022 Pass Through Entity: Chicago Public Schools Criteria or specific requirement ? Per 2 CFR 200.430 (a) and 200.431 (a), charges to Federal awards for salaries and wages (may also include benefits) must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The percent of compensation for personnel services paid currently to employees rendered during the period of performance under the federal award, cannot exceed the percentage of costs approved in the consolidated grants application. Condition ? Title I wages and salaries (including benefits if applicable) paid currently does not equal (is less or greater than) the percentage of personnel costs approved in the grant. Questioned costs ? $416.00 Context ? Monitoring activities were conducted based on a questionnaire developed to help determine whether the appropriate program and fiscal components were in place and documentation maintained was on file as per grant requirements. The review consisted of examining records on file at the school, classroom observations, reviewing the school's organizational chart, and discussions with school staff, the principal and/or principal's designee. Cause ? This finding occurred, in part, due to employee turnover in the past year. There were no controls in place to ensure that all administrative requirements were met, and proper reviews and procedures were not being used for expenses that flow into the claim reimbursement. Effect - Without the proper review controls, there is a heightened risk that the Organization's report may not be accurate and could lead to funds having to be returned. Repeat Finding: No Recommendation ? Effective control and accountability must be maintained for all funds. Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, according to 2 CFR 200.62, 200.302, and 200.303. Per 2 CFR 200.308 (b), recipients are required to report deviations from budget or project scope or objective, and request prior approval from the federal awarding agency. Copies of approved amendment(s) must be maintained on file to support any changes to the original approved application. For all unallowable claimed expenditures, funds must be returned to the Board to comply with Federal reporting requirements per 2 CFR 200.410. The school administrator is required to submit a claims adjustment in Oracle to start this process. View of Responsible Officials - Management agrees with the finding and is implementing a corrective action plan in November 2022.
Assistance Listing Number: 84.425U Program Title: COVID-19 Education Stabilization Fund - American Rescue Plan ? ESSER III ? MFT & Operating Fund Federal Award Number: N/A Federal Award Year: 2021/2022 Pass Through Entity: Chicago Public Schools Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization?s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and plans on implementing the appropriate policies and procedures in accordance with Uniform Guidance.
Assistance Listing Number: 84.425U Program Title: COVID-19 Education Stabilization Fund - American Rescue Plan ? ESSER III ? MFT & Operating Fund Federal Award Number: N/A Federal Award Year: 2021/2022 Pass Through Entity: Chicago Public Schools Criteria: In accordance with 2 CFR 200.303, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The Organization is either lacking or has nonconforming written policies and procedures for the following administrative functions, required by the Uniform Guidance: 1. Financial management - 2 CFR 200.302(b)(6) 2. Allowable Costs - 2 CFR 200.302(b)(7) 3. Federal payment - 2 CFR 200.305(b)(1) 4. Procurement - 2 CFR 200.318(a) and 2 CFR 200.318(c)(1) 5. Competition - 2 CFR 200.319(d) 6. Methods of procurement to be followed - 2 CFR 200.320 7. Compensation (Personal Services) - 2 CFR 200.430(a)(1) 8. Compensation (Fringe Benefits - Leave) - 2 CFR 200.431(b)(1) 9. Relocation costs of employees - 2 CFR 200.464(a)(2) 10. Travel costs - 2 CFR 200.474 Questioned Costs: There are no questioned costs related to the items described above. Context: The conditions outlined above are based on our review of the Organization?s policies and procedures, which were found to be not in accordance with Uniform Guidance. Cause: The Organization was not aware of the specific Uniform Guidance requirements for certain written policies and procedures. Effect: The Organization did not have these policies and procedures in place to reasonably ensure that program functions are achieved effectively, efficiently and in compliance with Federal statutes, regulations, and the terms and conditions of the award. The Organization was not in compliance with the administrative requirements set forth in the Uniform Guidance. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization design procedures and implement internal control procedures to ensure that the Uniform Guidance administrative requirements are met. Views of Responsible Officials and Corrective Action Plan: Management agrees with this finding and plans on implementing the appropriate policies and procedures in accordance with Uniform Guidance.
Finding 2022-002 ? Allowable Cost/ Cost Principles Information on the federal program: ALN #10.512-Agriculture Extension at 1890 Land-Grant Institutions Program 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. Condition: The University has a system in place that allocates annual salaries based on the percentage of time worked on grants as documented and approved on the personnel action form. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. For one employee of 23 tested, we noted that the salary was incorrectly allocated resulting in an overcharge of $1,138 for the payroll period selected. Context: The total salaries tested in the sample of 23 employees was approximately $81,000. The overcharge of $1,138 was, therefore, approximately 1% of the salaries tested. Of the $3.3 million in expenditures coded to ALN # 10.512 award for the year ended June 30, 2022, approximately $1.7 million represented salary costs. Cause/Effect: The University has an established process and control procedures for approval of employee?s costs charged to federal awards, but that process did not detect the over allocation for one employee tested. Questioned Costs: Salary costs were over allocated to the federal award by $7,849 for the entire fiscal year. Auditor?s Recommendation: We recommend the University strengthen its review process over salary allocations and ensure all allocations are correctly calculated. View of Responsible Official: Management agrees with this finding. See Corrective Action Plan at the end of the report.
Finding 2022-002 ? Allowable Cost/ Cost Principles Information on the federal program: ALN #10.512-Agriculture Extension at 1890 Land-Grant Institutions Program 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. Condition: The University has a system in place that allocates annual salaries based on the percentage of time worked on grants as documented and approved on the personnel action form. The approval is a key control ensuring that time coded to a federal award is allowable under the terms of that award. For one employee of 23 tested, we noted that the salary was incorrectly allocated resulting in an overcharge of $1,138 for the payroll period selected. Context: The total salaries tested in the sample of 23 employees was approximately $81,000. The overcharge of $1,138 was, therefore, approximately 1% of the salaries tested. Of the $3.3 million in expenditures coded to ALN # 10.512 award for the year ended June 30, 2022, approximately $1.7 million represented salary costs. Cause/Effect: The University has an established process and control procedures for approval of employee?s costs charged to federal awards, but that process did not detect the over allocation for one employee tested. Questioned Costs: Salary costs were over allocated to the federal award by $7,849 for the entire fiscal year. Auditor?s Recommendation: We recommend the University strengthen its review process over salary allocations and ensure all allocations are correctly calculated. View of Responsible Official: Management agrees with this finding. See Corrective Action Plan at the end of the report.
2022-003 Department of Justice and State of South Dakota Department of Public Safety CFDA #16.575, 2022-COMBO-00022, 2022-COMBO-00011 Crime Victim Assistance Allowable Costs, Allowable Activities, and Matching Significant Deficiency in Internal Control over Compliance Criteria: The Organization is required to have procedures in place to ensure that federal awards are expended only for allowable costs in accordance with Subpart E ? Cost Principles of the Uniform Guidance. Allowable costs are supported by appropriate documentation and correctly charged as to account, amount, and period. 2 CFR 200.430(i) establishes requirements for documentation of personnel expenses. 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. Condition: Our testing over expenditures noted the following items: - Three instances in which hours used to allocate payroll to the grant differed from actual hours worked and paid, resulting in deficiencies in allowable costs, allowable activities, and matching. - One instance in which hours used to allocate payroll to the grant differed from actual hours worked and paid, resulting in deficiencies in allowable costs and allowable activities only. - One instance identified over non-payroll expenditures in which costs were charged to the grant at the time paid rather than period of service, resulting in in deficiencies in allowable costs, allowable activities, and matching. Cause: Tracking of grant-related payroll is a manual process which increases the likelihood of error. Additionally, costs were charged to the program at the time the expenditure was paid rather than over the period of service. Effect: The Organization?s controls did not detect nor correct the errors identified, which results in a reasonable possibility that the Organization could submit disallowed costs under the federal awards. Questioned Costs: No questioned costs over $25,000. Context/Sampling: A nonstatistical sample of 60 payroll transactions were selected for allowable costs and allowable activities testing, which accounted for $45,235 out of $789,604 of payroll transactions. Of those payroll transactions 18 were also tested for matching which accounted for $2,360 out of $36,064 match payroll transactions. A nonstatistical sample of 16 non-payroll transactions out of 59 total transactions for allowable costs and allowable activities were selected for testing, which accounted for $8,680 of $24,213 of non-payroll transactions. One of those items was selected for matching testing which accounted for $139 of $159 of match expenditures. Repeat Finding from Prior Year(s): Yes, Finding 2021-002 Recommendation: We recommend management continue to review the process over tracking payroll related to federal programs and consider incorporating a secondary review of any manual spreadsheets or consider if the payroll can be allocated directly within the payroll system. Views of Responsible Officials: Management is in agreement.
Finding Number: 2022-002 - Represents a significant deficiency in internal control over compliance with Maine Mathematics and Science Alliance?s major federal program. Repeat Finding: No Type of Finding: Significant Deficiency Description: Internal Control over Payroll Condition: The internal controls over compliance for allowable activities and allowable costs are substantially the same for AL #47.076 and #47.070. During our audit, we noted several instances in which payroll expenditures were incorrectly allocated to the programs. The allocations were not based on time and effort records. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;?. Cause: During fiscal year 2022, there was turnover in the personnel handling payroll. The database that was used from July 1, 2021 through October 15, 2021 to allocate payroll expenditures to the appropriate programs was not properly calculating based on the approved time and effort records. Effect: Without ensuring the payroll allocation is supported by time and effort records, it is possible that grants could be overcharged, resulting in misstated financial statements and unallowable costs. Context: The situation noted in the audit did not result in reportable questioned costs. We noted the exception applied to payroll periods from July 1, 2021 through October 15, 2021. The sample was not intended, and was not, a statistically valid sample. Recommendation: We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. This should be completed and documented by an appropriate individual. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.
Finding Number: 2022-002 - Represents a significant deficiency in internal control over compliance with Maine Mathematics and Science Alliance?s major federal program. Repeat Finding: No Type of Finding: Significant Deficiency Description: Internal Control over Payroll Condition: The internal controls over compliance for allowable activities and allowable costs are substantially the same for AL #47.076 and #47.070. During our audit, we noted several instances in which payroll expenditures were incorrectly allocated to the programs. The allocations were not based on time and effort records. Criteria: 2 CFR 200.430(i) states that ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;?. Cause: During fiscal year 2022, there was turnover in the personnel handling payroll. The database that was used from July 1, 2021 through October 15, 2021 to allocate payroll expenditures to the appropriate programs was not properly calculating based on the approved time and effort records. Effect: Without ensuring the payroll allocation is supported by time and effort records, it is possible that grants could be overcharged, resulting in misstated financial statements and unallowable costs. Context: The situation noted in the audit did not result in reportable questioned costs. We noted the exception applied to payroll periods from July 1, 2021 through October 15, 2021. The sample was not intended, and was not, a statistically valid sample. Recommendation: We recommend that the database used in the allocation of payroll to the grants be compared to the time and effort records prior to posting into the general ledger and sending to Bangor Payroll for processing. This should be completed and documented by an appropriate individual. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.
Finding 2022-001 ? Allowable Costs/Cost Principles ? Time and Effort Reporting Finding Type: Significant deficiency in internal control over compliance and noncompliance with laws and regulations. Federal Program: Special Education Cluster ALN #: 84.027 and 84.173 Federal Agency: U.S. Department of Education Pass-through Entity: Michigan Department of Education Pass-through Number: 220450, 220493, 221280, 220460, 221285 Criteria: 2 CFR 200.430(i) requires that charges to Federal awards for salaries and wages must be supported by adequate documentation in accordance with the District?s payroll policies. Per the District?s federal policies, the District is required to support payroll charges to federal cost objectives with adequate documentation including personnel activity reports, for those who split their time between multiple cost objectives, and semi-annual time certifications, for those who work 100 percent of their time on a single cost objective. Condition: The District did not maintain adequate support documentation to substantiate salaries and wages charged to the Special Education Cluster resulting in periods of ineffective or absent controls. Questioned Costs: The total charges included in our sample that were not supported by adequate documentation amount to $37,823. Cause: This condition appears to be the result of turnover in personnel who were responsible for obtaining personnel activity reports and semi-annual time certifications for those employees charged to federal cost objectives. Effect: As a result of this condition, the District is unable to adequately support the accuracy of payroll expenditures charged to the grant. Recommendation: The District should adhere to documented time and effort reporting procedures and maintain effective internal controls that ensure salaries and wages allocated to federal cost objectives are based on records that accurately reflect the work performed. District?s Response: The District concurs with the facts of this finding and will continue to establish effective controls to ensure time and effort reporting is consistent with the District?s policies, and that all charges to the grant are adequately supported.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (I) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding I 00% of compensated activities, and ( 4) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight, turnover of internal staffing. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $33,494 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (I) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding I 00% of compensated activities, and ( 4) support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have documentation to support the distribution of the employee's time spent on grant activities. Cause: Administrative oversight, turnover of internal staffing. Effect: The District did not have adequate documentation to support the distribution of the employee's wages paid using grant funds. Questioned Costs: $33,494 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management's views and corrective action plan is included at the end of this report.
2 CFR ? 3474.1 gives regulatory effect to the Office of Management and Budget Guidance in 2 CFR part 200, adopted by the Department of Education. 2 CFR ? 200.430 states, in part, that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both Federal and non-Federal activities. In addition, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity; and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. District Policy 6116 for Time and Effort Reporting indicates the reports should 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 and 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. The payroll office is responsible for the distribution, collection, and retention of all employee time and effort reports. The salaries for 22/22 employees tested were charged to the Title I Grant Fund without any time and effort documentation maintained to support the amount of time worked on the grant. Therefore, we consider the salaries and related benefits for these employees in the amount of $335,270 to be a questioned cost. Failure to maintain the appropriate time and effort documentation could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education. The District should ensure all employees charging salaries and benefits to federal grants maintain the appropriate documentation supporting the time spent on the grant, in accordance with District Policy 6116 ? Time and Effort Reporting. Appropriate supporting documentation could include semi-annual certifications for employees working solely on a single cost objective or timesheets when an employee works on multiple activities.
FINDING 2022-006: CRIME VICTIM ASSISTANCE (16.575) ? ALLOWABLE COSTS AND COST PRINCIPLES ? PAYROLL CHARGES AND COST ALLOCATION FINDING TYPE: Federal Awards ? Material Weakness/Noncompliance CRITERIA: 2 CFR Section 200.430 states charges to Federal awards for wages and salaries must be based off records that support actual work performed. For employees that work on more than one Federal award, records must support the distribution. Time and effort reporting must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The Organization must, also, have an overall cost allocation plan that is in adherence with the Uniform Guidance. CONDITION: The auditor noted, while testing a sample of reimbursement requests for Crime Victim Assistance for compliance and adherence to internal controls, that several reimbursement requests lacked contemporaneous backup for wages charged. It was extremely difficult for the auditor to determine how wages were being distributed between each program in sufficient detail. Amounts appeared to have been charged and based off budgeted and estimated amounts in some cases. These amounts were not promptly reconciled for accuracy until well after reimbursement and close of the grant period. The auditor also noted through discussion and observation that the Organization did not have a well-defined and compliant cost allocation plan. CAUSE: Turnover at the accounting position and insufficient internal controls led to accidental and non-compliant reimbursement requests and missing documentation. Management?s cost allocation plan was not adequate to support charges to federal awards. EFFECT: Safenet, Inc. was not in compliance with payroll documentation compliance requirements. Internal controls were not functioning or designed in a manner that would ensure payroll charges to federal awards were accurate and based off actual time spent on each award. Improper amounts could have been charged to federal awards. Wages could have been requested for reimbursement from periods after grants were closed. A non-compliant cost allocation plan could lead to charges being used for multiple awards and inequitable distribution between awards. QUESTIONED COST: Undetermined RECOMMENDATION: Management should ensure internal controls are designed in a manner that charges wages and salaries to Federal awards based off actual time worked for each grant. They should also ensure supporting documentation is maintained that agrees to the reimbursement request and the underlying accounting records. Management must ensure that a sound cost allocation plan is in place that outlines the methods and procedures that Safenet, Inc. will use to allocate costs to various grants. It will ensure shared (indirect) costs are equitably charged to each of its grants. VIEWS OF RESPONSIBLE OFFICIALS: Management agrees with the finding.
FINDINGS AND QUESTIONED COSTS RELATED TO FEDERAL AWARDS Finding Number: 2022-001 Repeat Finding: No Program Name/Assistance Listing Title: Child Nutrition Cluster Assistance Listing Number: 10.559 Federal Agency: U.S. Department of Agriculture Federal Award Number: 7AZ300AZ3 Pass-Through Agency: Arizona Department of Education Questioned Costs: $19,881 Type of Finding: Significant Deficiency Compliance Requirement: Activities Allowed or Unallowed: Allowable Costs/Cost Principles CRITERIA Management is responsible for establishing and maintaining internal controls over payroll. In addition, management is responsible for maintaining documentation to support all salary and wage payments to employees. Further, 2 CFR Part 200.430(i) requires that salaries and wages must be based on records such as pay agreements. CONDITION The District lacked proper internal controls over payroll. CAUSE The District did not establish adequate controls over the retention of employee pay agreements. EFFECT The District?s did not have documentation to support the rate of pay for three employees. CONTEXT The District was not able to provide a pay agreement to support the rate of pay for three of 50 employees reviewed. The sample was not intended to be, and was not, a statistically valid sample. RECOMMENDATION The District should enhance its internal control procedures over payroll to ensure that all pay agreements related to payroll are retained. VIEWS OF RESPONSIBLE OFFICIALS See Corrective Action Plan.
2022-006 U.S. Department of Health and Human Services Temporary Assistance for Needy Families (TANF) Allowable Costs ? Payroll Time and Effort Material Weakness in Internal Controls over Compliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i)) as it relates to federal grants: Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non- Federal entity; and (vi) [Reserved](vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: The District did not have proper timing keeping for employees that worked on TANF. Thus, evidence of actual time worked on programs was not accurately reflected in the federal grant requests. Cause: Actual personnel time that worked on federal programs are not reconciled to the amounts charged to the federal programs on a regular basis. Context/Sampling: Time reporting controls were not in effect at the District. All employees funded under TANF in FY22 were selected and one employee?s time and effort was not provided. Questioned Costs: None reported. Effect: The District is at risk for noncompliance with allowable costs requirements. Repeat Finding from prior year: No Recommendation: Certain controls should be put in place to ensure that reconciliation and certification of actual time charged to federal programs are consistent with the grant reimbursement for those employees? time. Such reconciliations can be done quarterly, bi-annually, or annually. View of Responsible Officials: Management agrees with the finding.
2022-002 ? Time and Effort Documentation Federal Agency: Department of Health and Human Services Federal Program: Research and Development Cluster Assistance Listing Number: 93.310 ? Trans-NIH Research Support Award Period: July 1, 2021 to June 30, 2022 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or Specific Requirement: According to Code of Federal Regulations, 200 CFR 200.430(i), the minimum time and effort documentation must be supported by a system of internal controls which provides reasonable assurance that charges are accurate, allowable and allocable; be incorporated into official records; reasonably reflect total activity for which the employee is compensated; encompass all activities (federal and nonfederal); comply with established accounting policies and practices; and support distribution among specific activities or cost objectives. Condition: We noted the charges for one employee was not supported by the established time and effort documentation. This discrepancy was noted for 1 out of 35 samples tested, which was statistically valid. Questioned Costs: $1,653 (known), $16,540 (likely) Context: The employee?s time and effort accounted for $14,887 of the $816,606 total personnel expenses charged to the program audit the award period. Cause: The employee?s time and effort on the program was not captured within the Blood Bank?s timekeeping system. Effect: The condition identified led to noncompliance with federal time and effort documentation requirement. Repeat Finding: Yes, 2021-001 Recommendation: We recommend the Blood Bank implement procedures to ensure all personnel charges to the program are supported by the minimum time and effort documentation outlined within 200 CFR 200.430. Views of Responsible Officials and Planned Corrective Actions Please refer to the attached Corrective Action Plan.
#2022-001 ? Significant Deficiency ? Allowable Costs T.E.A.C.H. Child Care and Development Block Grant, CFDA #93.575 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined that Management used an allocation methodology to allocate salaries to the federal award based on a historical analysis. Although Management performed a reconciliation of allocation to actual cost, no adjusting entry was performed prior to year-end to adjust the financial records. Cause The cause is human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of salary expenses allocated to the federal grant. Questioned Costs Approximately $3,337 was overcharged on the $4,645,750 grant award. Perspective Information The finding noted related to three (3) individuals who were overcharged to the grant based on testwork performed for four (4) pay periods. Identification as a repeat finding There was a similar finding in the prior year. Recommendation We recommend a periodic reconciliation and recorded entry to the accounting records relating to payroll allocation to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. View of Responsible Official The Association will conduct reconciliation of payroll allocation twice each year at the end of the second quarter and at the end of the third quarter to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. A budget revision based on actuals will be implemented effective the fourth quarter.
2022-001 - Allowable Cost/Cost Principal Federal Program Information: 84.425D Education Stabilization Fund Under the Coronavirus Aid, Relief and Economic Security Act Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the District was not completing the semi-annual time certifications/periodic time certifications properly and create one semi-annual time certification/periodic time certifications to cover 12 months. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: All signed time certifications were reviewed in conjunction with a test of 25 employees across two payroll periods. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are proper documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Orleans Central Supervisory Union.
2022-001 - Allowable Cost/Cost Principal Federal Program Information: 84.425D Education Stabilization Fund Under the Coronavirus Aid, Relief and Economic Security Act Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1)(vii). Condition: During audit procedures, it was identified that the District was not completing the semi-annual time certifications/periodic time certifications properly and create one semi-annual time certification/periodic time certifications to cover 12 months. Cause: The District does not have the necessary internal controls over compliance. Effect: Expenses may not be properly allocated to the grant; this could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: All signed time certifications were reviewed in conjunction with a test of 25 employees across two payroll periods. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the District implement internal control processes and procedures to ensure that time and effort records for employees working are proper documented in accordance with the grant requirements. Views of Responsible Officials and Corrective Action Plan: Please see the Corrective Action Plan issued by the Orleans Central Supervisory Union.
Federal Agency: Department of Justice Federal Program Name: Crime Victim Services 2022 Assistance Listing Number: 16.575 Pass-Through Agency: Minnesota Office of Justice Programs Pass-Through Numbers: A-CVS-2022-WOMADV-021 Award Period: 10/1/2021 ? 9/30/2023 Type of Finding: ? Material Weakness in Internal Control ? Other Matters Criteria: 2 CFR 200 ?200.430 requires that changes to Federal awards for salaries and wages must be based on records that accurately reflect work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: The Organization did not have a process to review or approve the time and effort of employees charged to the grant. Context: No documentation of time and effort approval was kept the full fiscal year. Cause: Internal control procedures were not in place to review and approve time and effort for personnel. Effect: When internal controls are not in place over payroll charges, there is increased risk that payroll allocations may be incorrect. Repeat Finding: No. Recommendation: The Organization should implement internal controls to ensure that time and effort is reviewed on a timely basis. View of Responsible Officials: Management is in agreement with this audit finding.
#2022-004 ? Significant Deficiency ? Allowable Costs Community Service Block Grant, CFDA # 93.569 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined certain compensation payments were incorrectly allocated to a funding source which did not allow for that type of compensation. This administrative error was corrected. Cause The cause is the result of human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of compensation payments allocated to the federal grant. Questioned Costs Questioned costs amount to $27,727. Perspective Information This finding was consistent for the fiscal year. Identification as a repeat finding There was no single audit requirement in the prior year and therefore, this finding is not reported as a repeated finding. Recommendation We recommend maintaining weekly timesheets with CEO approval, itemized by time allocated per grant. The financial statement records should be supported by direct time allocated to the grant as indicated on the approved timesheets. View of Responsible Official CAAP will do its due diligence in appropriately allocating costs should similar costs be incurred.
#2022-004 ? Significant Deficiency ? Allowable Costs Community Service Block Grant, CFDA # 93.569 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined certain compensation payments were incorrectly allocated to a funding source which did not allow for that type of compensation. This administrative error was corrected. Cause The cause is the result of human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of compensation payments allocated to the federal grant. Questioned Costs Questioned costs amount to $27,727. Perspective Information This finding was consistent for the fiscal year. Identification as a repeat finding There was no single audit requirement in the prior year and therefore, this finding is not reported as a repeated finding. Recommendation We recommend maintaining weekly timesheets with CEO approval, itemized by time allocated per grant. The financial statement records should be supported by direct time allocated to the grant as indicated on the approved timesheets. View of Responsible Official CAAP will do its due diligence in appropriately allocating costs should similar costs be incurred.
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
(2022-046) Title: Internal control over monitoring of employee classification and compensation needs improvement Prior Year Findings: None State Department: Administrative and Financial Services State Bureau: Human Resources Federal Agency: U.S. Department of Labor U.S. Department of Health and Human Services U.S. Department of Defense Assistance Listing Title: Unemployment Insurance (UI) (COVID-19) Immunization Cooperative Agreements (COVID-19) Child Support Enforcement National Guard Military Operations and Maintenance (O&M) Projects Assistance Listing Number: 17.225; 93.268; 93.563; 12.401 Federal Award Identification Number: Unemployment Insurance Trust Fund, Maine, UI347192055A23, UI372842255A23, UI359482160A23, UI372272255A23, UI356522155A23, UI348602055A23, UI340622055A23; NH23IP922604; 2001MECSES, 2101MECSES, 2201MECSES; W912JD-19-2-1001, W912JD-19-2-1005, W912JD-20-2-1001, W912JD-20-2-1002, W912JD-20-2-1003, W912JD-20-2-1007, W912JD-20-2-1010, W912JD-21-2-1001, W912JD-21-2-1002, W912JD-21-2-1003, W912JD-21-2-1004, W912JD-21-2-1007, W912JD-21-2-1010, W912JD-21-2-1021, W912JD-21-2-1022, W912JD-21-2-1023, W912JD-21-2-1024, W912JD-21-2-1040, W912JD-22-2-1001, W912JD-22-2-1002, W912JD-22-2-1003, W912JD-22-2-1004, W912JD-22-2-1007, W912JD-22-2-1010, W912JD-22-2-1021, W912JD-22-2-1022, W912JD-22-2-1023, W912JD-22-2-1024, W912JD-22-2-1040, W912JD-22-2-2010 Compliance Area: Allowable costs/cost principles Type of Finding: Significant deficiency Questioned Costs: None Criteria: 2 CFR 200.303; 2 CFR 200.430 The Department must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the Department is managing awards in compliance with Federal statutes, regulations, and the terms and conditions of awards. Costs of compensation are allowable to the extent that personal services are rendered during the period of performance under the Federal award, total compensation is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity, and follows an appointment made in accordance with a non-Federal entity?s laws and/or rules or written policies. Condition: The Bureau of Human Resources (BHR) employs Functional Job Analysis (FJA) reports to summarize each State employee?s position duties and responsibilities, and to assign the position to a classification and salary grade representing reasonable compensation for services rendered by the position. The assigned salary grade provides a basis for the allowability of compensation costs charged to Federal grant awards by documenting the reasonableness of compensation for services rendered by State employees, and that the position appointment was made and maintained in accordance with State statute. BHR maintains the position classification specifications and related compensation plan of State employees. Periodic review of position classifications, including required duties and responsibilities, are completed by individual agency personnel through the following processes: ? Annual performance reviews as required by the Performance Management System and related forms which include detail of position duties and responsibilities ? Hiring justification forms completed by agency heads to attest to the duties and responsibilities of positions being filled ? Review and approval of job vacancy announcements prior to advertisement which reflect the duties and responsibilities of the position?s FJA on file These processes have been established to ensure that documented duties and responsibilities of all State employee positions are accurate and up to date. These processes are the responsibility of individual agencies; however, BHR is responsible for the oversight to ensure that agencies are completing the established processes accurately and timely. BHR does not have policies and procedures that require a documented level of oversight or monitoring of agency-level activities. Context: During fiscal year 2022, $122 million of payroll expenditures were charged to Federal grants. This represents approximately 10 percent of fiscal year 2022 Statewide payroll expenditures, which totaled $1.2 billion. Cause: ? Competing priorities ? Lack of resources ? Lack of adequate policies and procedures Effect: ? State employee job classification and compensation may not accurately reflect current duties and responsibilities of each position. As a result, payroll costs charged to Federal awards may not be supported. ? Without documented evidence that these activities are occurring, BHR cannot ensure that the classification and compensation plan of all State employee positions is maintained and properly supported by documentation that accurately reflects the job duties and responsibilities of each position. Recommendation: We recommend that the Department implement additional policies and procedures to ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. Corrective Action Plan: See F-18 Management?s Response: The Department partially agrees with this finding. In addition to the three bullets noting how BHR conducts reviews of position classifications, BHR also conducts the following: ? management submits a management-initiated FJA when a position's duties are being significantly changed, and that FJA is audited by BHR to determine the correct classification; ? an employee may submit an employee-initiated FJA if they believe they are working out of classification, and the FJA will be audited by BHR for determination of the correct classification; and ? classification specifications are reviewed periodically by BHR to determine accuracy and make any changes (this includes when BHR reviews a classification for recruitment and retention purposes). Contact: Breena D. Bissell, Director, Bureau of Human Resources, DAFS, 207-215-0886 Auditor?s Concluding Remarks: The Office of the State Auditor recognizes the additional processes conducted by BHR noted in Management?s Response; however, the existing policies and procedures do not ensure proper oversight and monitoring of agency-level activities related to position duties and responsibilities and maintenance of the State classification and compensation plan. The finding remains as stated. (State Number: 22-0111-01)
FINDING 2022-004 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not developed at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation approved a salary schedule for bus drivers which included additional compensation based on miles driven for bus drivers who transported preschool students. Each pay period, the Director of Transportation calculated a bus driver's daily pay by adding the approved hourly wage rate times hours worked to the per mile rate times miles driven for the preschool route, if applicable. The School Corporation provided approved timesheets for the bus drivers selected for testing; however, the calculation of the daily pay calculation was not provided for audit. The bus drivers' payroll of $113,486 charged to the Title I grants during the audit period 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 control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs were $113,486 as identified in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2022-004 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014, S010A200014, S010A210014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context An effective internal control system was not developed at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. The School Corporation approved a salary schedule for bus drivers which included additional compensation based on miles driven for bus drivers who transported preschool students. Each pay period, the Director of Transportation calculated a bus driver's daily pay by adding the approved hourly wage rate times hours worked to the per mile rate times miles driven for the preschool route, if applicable. The School Corporation provided approved timesheets for the bus drivers selected for testing; however, the calculation of the daily pay calculation was not provided for audit. The bus drivers' payroll of $113,486 charged to the Title I grants during the audit period 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 control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause Management had not established a system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs were $113,486 as identified in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal controls to ensure compliance and comply with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Criteria: Per federal regulation 2 CFR section 200.430(i)(1)(vii), the School District must maintain time and effort records for employees who work, all or in part, under federal grants. Condition: The semi-annual certification provided by an employee was not complete and was signed prior to the end of the period worked, as listed on the document. Cause: The School District was not aware of the required detail. Effect: The School District was not in compliance with all of the components of the requirements. Recommendation: We recommend that the School District ensure that all required timesheets include the related employee data and clearly identify the time segregated between federal and non-federal funding. Certification statements should be properly signed and dated and accurately reflect the time period worked. Management?s Response: Management agrees with this finding.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.207 Employment Service Cluster and ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - Various Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.430(a)(3) indicates that personal services are allowable to the extent they are determined and supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition - An internal control was not in place to document that the current rates of pay were approved. During our testing of payroll, we determined that actual pay was charged to the federal grants tested. However, there was no documentation (within personnel files or other means) to support that the rates of pay were approved. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Five of the six personnel files that were provided as support for pay rates appeared to contain outdated information. Cause and Effect - DESC did not have a control in place to maintain current payrates in personnel files or to provide alternative documentation to support that pay rates were approved. As a result, we were not able to determine if the rates of pay were approved by management. Recommendation - DESC should maintain up-to-date personnel information to support that the rates of pay for employees are approved. Views of Responsible Officials and Planned Corrective Actions - DESC was unable to locate evidence due to turnover with the HR department. We have hired a new director of human resources (the "Director"), who has implemented an employee filing system that incorporates up-to-date employee information and salary information. This information is noted in offer letters, promotion letters, and salary increase letters. All payroll updates are required in writing to evidence approval of the Director and another executive team member's authorization (president or CFO). This confidential information is stored in the Director?s locked office.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.207 Employment Service Cluster and ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - Various Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.430(a)(3) indicates that personal services are allowable to the extent they are determined and supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition - An internal control was not in place to document that the current rates of pay were approved. During our testing of payroll, we determined that actual pay was charged to the federal grants tested. However, there was no documentation (within personnel files or other means) to support that the rates of pay were approved. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Five of the six personnel files that were provided as support for pay rates appeared to contain outdated information. Cause and Effect - DESC did not have a control in place to maintain current payrates in personnel files or to provide alternative documentation to support that pay rates were approved. As a result, we were not able to determine if the rates of pay were approved by management. Recommendation - DESC should maintain up-to-date personnel information to support that the rates of pay for employees are approved. Views of Responsible Officials and Planned Corrective Actions - DESC was unable to locate evidence due to turnover with the HR department. We have hired a new director of human resources (the "Director"), who has implemented an employee filing system that incorporates up-to-date employee information and salary information. This information is noted in offer letters, promotion letters, and salary increase letters. All payroll updates are required in writing to evidence approval of the Director and another executive team member's authorization (president or CFO). This confidential information is stored in the Director?s locked office.
Assistance Listing Number, Federal Agency, and Program Name - ALN 17.207 Employment Service Cluster and ALN 17.258, 17.259, and 17.278 WIOA Cluster Federal Award Identification Number and Year - Various Pass-through Entity - Michigan Department of Labor and Economic Opportunity - Workforce Development Agency Finding Type - Significant deficiency Repeat Finding - No Criteria - 2 CFR 200.430(a)(3) indicates that personal services are allowable to the extent they are determined and supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition - An internal control was not in place to document that the current rates of pay were approved. During our testing of payroll, we determined that actual pay was charged to the federal grants tested. However, there was no documentation (within personnel files or other means) to support that the rates of pay were approved. Questioned Costs - Not applicable Identification of How Questioned Costs Were Computed - Not applicable Context - Five of the six personnel files that were provided as support for pay rates appeared to contain outdated information. Cause and Effect - DESC did not have a control in place to maintain current payrates in personnel files or to provide alternative documentation to support that pay rates were approved. As a result, we were not able to determine if the rates of pay were approved by management. Recommendation - DESC should maintain up-to-date personnel information to support that the rates of pay for employees are approved. Views of Responsible Officials and Planned Corrective Actions - DESC was unable to locate evidence due to turnover with the HR department. We have hired a new director of human resources (the "Director"), who has implemented an employee filing system that incorporates up-to-date employee information and salary information. This information is noted in offer letters, promotion letters, and salary increase letters. All payroll updates are required in writing to evidence approval of the Director and another executive team member's authorization (president or CFO). This confidential information is stored in the Director?s locked office.