2022-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 19 payrolls, it was determined that 5 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
2022-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 19 payrolls, it was determined that 5 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
2022-001 - Allowable Costs/Cost Principles Federal Program Information: Department of Education: Passed through the State of Maine Agency of Education ALN - 84.425 - Education Stabilization Fund Criteria: The following CFR(s) apply to this finding: 2 CFR 200.430(i)(1) Condition: During audit procedures, it was identified that the School Department did not have documented payrates on file for some employees. Cause: The School Department does not require payrate documentation for all employees. Effect: Employees may not be paid the correct amount. This could result in unallowable expenses being charged and subsequently improperly reimbursed by federal funds. Identification of Questioned Costs: None identified. Context: Out of a sample of 19 payrolls, it was determined that 5 employees did not have documented payrates on file. This is a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: It is recommended that the School Department implement internal control processes and procedures to ensure that payroll files are complete and all employees have documented payrates. Views of Responsible Officials and Corrective Action Plan: Client agrees with finding and the unabridged version of their response can be found in the Corrective Action Plan. Please see the Corrective Action Plan issued by the School Department.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
2022-001 Improve Time and Effort Documentation (Material Weakness) Federal Agency: Department of Education Cluster/Program: Special Education Cluster and Education Stabilization Fund AL Number(s): 84.027/84.173, 84.425 Award Year: 2021 and 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance and Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Federal grant recipients are required to maintain federally compliant documentation to support time and effort of employees working solely or partially on federal grants. These records must be maintained in accordance with federal cost principles (Uniform Guidance, 2 CFR Part 200.430), and must, in some documented fashion, provide evidence that the time charged to federal programs represents the time actually spent on that grant function by the employee. For employees who work partially on grant activities, time logs should be prepared and must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. For employees who work solely on grant activities, semi-annual certifications can be prepared and also must be signed by either the employee or a supervisor knowledgeable of the work performed by the employee. Management of the School Department is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context The School Department did not have adequate documentation to support the time and effort of employees who charged time to grant activities. The documentation did not clearly state the distribution of the employee?s time spent on grant activities. Cause The School Department does not have adequate controls in place over time and effort procedures. Effect or Potential Effect Due to the weaknesses in internal control noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Known and likely questioned costs reported are all payroll and related costs charged, as follows: Questioned Costs Known questioned costs are reported equal to $1,241,221, as follows: AL Questioned Number(s) Name of Federal Program or Cluster Costs 84.027/84.173 Special Education Cluster $596,331 84.425 Education Stabilization Fund $644,890 Identification as Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021-002. Recommendation The School Department should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Documentation should be retained to support time and effort of all employees who charge time to grant activities in accordance with applicable federal guidelines. Views of Responsible Official Management?s views and corrective action plan is included in a separate corrective action plan.
Finding 2022-003: Time Tracking and Reporting Information on the Federal Program: 93.368 Criteria: CFR 200.430 indicates that the allocation of salaries for employees must be consistently applied to both Federal and Non-Federal activities. Condition: We noted that time tracking was only required for employees charging time to federal awards. Additionally, the time tracking only included time spent by the employee on Federal activities, and not non-Federal activities. Timesheets should be required for all staff and should include time spent on both non-Federal and Federal activities in order to be in compliance with the Uniform Guidance. Additionally, we noted that timesheets lacked evidence of employee attestation. All timesheets should include employee signature to verify accuracy of time reported. Cause: Policies in place at the Foundation over time tracking only require that time spent on the Federal-activities be tracked. Policies also do not require employee signature on the timesheets prior to submission. Effect: It is possible that time charged to the Federal activities is not accurate as the allocation is not based on true time spent on activities as a whole, including both Federal and non-Federal. Questioned Costs: Unknown Context: Our audit procedures consisted of testwork completed on individual employee timesheets for certain pay periods. We consider our sample to be representative of the population. The condition appeared to be systemic in nature. Identification as a Repeat Finding, if Applicable: 2021-002. Recommendation: Timesheets should be required for all staff and should also include time spent on both Federal and non-Federal activities in order to be in compliance with Uniform Guidance Cost Principals. Additionally, all timesheets should include employee signature to verify accuracy of time reported.
FINDING 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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 2022-001 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program, Summer Food Service Program for Children, COVID-19 - Summer Food Service Program for Children Assistance Listings Numbers: 10.553, 10.555, 10.559 Federal Award Numbers and Years (or Other Identifying Numbers): FY 2021, FY 2022 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Other MattersCondition and Context An effective system of internal control was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, an employee had duties related to the operation of the food service program and other nonfederal duties. The employee's wages were paid from both grant and nongrant funds. However, the employee did not maintain documentation of time spent on each activity. Therefore, all salary costs charged to the Child Nutrition Cluster during the time the employee performed both roles were considered questioned costs. Total questioned costs were $36,424. 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 200.430(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 . . . (iv) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." INDIANA STATE BOARD OF ACCOUNTS 14 HANOVER COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Cause Management had not developed an effective system of internal control that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective system of internal control, as well as adequately document costs, enabled noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could result in the loss of future federal funds to the School Corporation. Questioned Costs Known questioned costs of $36,424 were identified as detailed in the Condition and Context. Recommendation We recommended that the School Corporation's management establish a system of internal control to ensure that documentation will be maintained 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.
Program: AL 84.010 ? Title I Grants to Local Educational Agencies ? Allowability and Subrecipient Monitoring Grant Number & Year: S010A190027, FFY 2020; S010A200027, FFY 2021 Federal Grantor Agency: U.S. Department of Education Criteria: Per 2 CFR ? 3474.1 (January 1, 2022), the U.S. Department of Education adopted the OMB Uniform Guidance in 2 CFR part 200, except for 2 CFR ? 200.102(a) and 200.207(a). Per 2 CFR ? 200.403 (January 1, 2022), allowable costs must be necessary, reasonable, and adequately documented. 2 CFR ? 200.430(i)(1) (January 1, 2022) states, in relevant part, the following: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities . . . . ; (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity?s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity . . . . ; and * * * * (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Enclosure A of the ?Letter to Chief State School Officers on Granting Administrative Flexibility for Better Measures of Success? (September 7, 2012) provides guidelines for local educational agencies (LEAs), using a substitute system for time-and-effort reporting. Enclosure A states, in relevant part, the following: (3) Employee schedules must: a. Indicate the specific activity or cost objective that the employee worked on for each segment of the employee?s schedule; b. Account for the total hours for which each employee is compensated during the period reflected on the employee?s schedule; and c. Be certified at least semiannually and signed by the employee and a supervisory official having firsthand knowledge of the work performed by the employee. 2 CFR ? 200.332 (January 1, 2022) states, in relevant part, the following: All pass-through entities must: * * * * (d) Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. Pass-through entity monitoring of the subrecipient must include: * * * * (2) Following-up and ensuring that the subrecipient takes timely and appropriate action on all deficiencies pertaining to the Federal award provided to the subrecipient from the pass-through entity detected through audits, on-site reviews, and written confirmation from the subrecipient . . . . A good internal control plan requires that adequate documentation be maintained to support amounts claimed by and paid to subrecipients. Good internal control also requires procedures to follow up with subrecipients to ensure they are correcting deficiencies and in compliance with applicable regulations. Condition: The Agency lacked procedures to ensure that subrecipients documented their use of Federal awards appropriately. Repeat Finding: No Questioned Costs: $145,101 known (S010A190027, $8,041; S010A200027, $137,060) Statistical Sample: No Context: We randomly selected 25 subrecipient payments and also chose the largest subrecipient payment for testing. We noted the following: ? Several employees? salaries and benefits were included in the reimbursement requests; however, the Agency did not require subrecipients to submit documentation for these expenditures, other than reports from their accountings systems, at the time of reimbursement. We provided the Agency with an opportunity to request documentation from its subrecipients to support that their salaries and benefits expenses were allowable and in accordance with Federal cost principles; however, two of the subrecipients did not provide adequate support to show that their salaries and benefits were allocable to the grant, resulting in $8,041 sample questioned costs and $137,060 non-sample questioned costs. ? The Agency?s procedure is to perform fiscal reviews of each subrecipient at least once every three years. We reviewed the most recent fiscal reviews for the same 26 subrecipients selected for testing above. For five of these reviews, the Agency noted that the subrecipient did not maintain adequate documentation for salaries and benefits. When we inquired with the Agency regarding what had been done to follow up on its findings, the Agency replied that the findings did not require follow-up. Payment errors noted for the sample tested were $8,041. The total sample tested was $1,494,006. Subrecipient aid payments for the fiscal year ended June 30, 2022, totaled $91,043,602. The sample population was $84,396,850 (total population $91,043,602 less $6,646,752 to largest subrecipient that was separately determined to be allowable). Based on the sample tested, the case error rate was 8% (2/25). The dollar error rate for the sample was 0.54% ($8,041/$1,494,006), which estimates the potential dollars at risk for fiscal year 2022 to be $455,753 (dollar rate multiplied by the population). Cause: Inadequate procedures. Effect: Without adequate supporting documentation and monitoring procedures, there is an increased risk that Federal awards could be used for unallowable costs. Recommendation: We recommend the Agency improve procedures to monitor subrecipients, including reviewing detailed supporting documentation for payroll expenses and following up with subrecipients to ensure that they correct errors noted. Management Response: The Department agrees the two subrecipients sampled did not complete one time and effort certification semi-annually (rather completed annually instead) or with all language suggested in the guidelines from the U.S. Department of Education. However, the Department disagrees with the reimbursement being questioned costs as the time and effort certifications demonstrated adequate documentation to support the employees? activities were allowable for the Title I grant. In the absence of this information, the Department submitted affidavits from the two LEA?s supervisory staff with personal knowledge of the work performed consistent with the U.S. Department of Education?s audit resolutions practices; whereas the APA does not consider documentation after the fact to be adequate to eliminate the finding. The findings noted in the subrecipient fiscal monitoring exit letters were identified for technical assistance purposes only and not considered to have met a level of materiality that required a corrective action plan. Corrective action plans are clearly noted in subrecipient fiscal monitoring exit letters when issued and proper follow-up action is taken when this occurs. Technical assistance was provided to each of the subrecipients at the time of the monitoring review as well as to all subrecipients periodically throughout the year. APA Response: Per the Uniform Guidance, questioned costs include expenditures that lack adequate supporting documentation at the time of the audit. 2 CFR ? 200.430(i)(1) (January 1, 2022), as referenced in the report comment, says that such documentation must ?accurately reflect the work performed? and be ?supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Affidavits dated February 27, 2023, some 18 months after the salary and benefit expenses occurred, cannot possibly satisfy either of these requirements and are, therefore, not acceptable. As the documentation provided did not meet the minimum requirements set forth in Uniform Guidance and guidance issued by the U.S. Department of Education, the expenditures at issue must be considered questioned costs. Moreover, the Uniform Guidance requires the Agency, as the pass-through entity, to ensure that the subrecipient takes timely and appropriate action to address deficiencies identified not only during audits but also from the Agency?s own reviews. The Agency has noted issues similar to those addressed by the APA ? namely, that the subrecipients have lacked adequate supporting documentation for salary and benefit expenses. The Agency performs subrecipient fiscal monitoring for most subrecipients only every third year. Thus, effective follow-up procedures, as required by 2 CFR ? 200.332 (January 1, 2022), are needed to ensure that subrecipients implement the technical assistance provided by the Agency.
Program: AL 20.509 ? Formula Grants for Rural Areas ? Allowability & Subrecipient Monitoring Grant Number & Year: NE-2019-013-00, FFY 2017 Federal Grantor Agency: U.S. Department of Transportation Criteria: Per 2 CFR ? 1201.1 (January 1, 2022), the U.S. Department of Transportation adopted the Uniform Administrative Requirements, Cost Principles, and Audit Requirements set forth at Title 2 CFR part 200. 2 CFR ? 200.403 (January 1, 2022) requires costs to be reasonable, necessary, and adequately documented. A good internal control plan requires procedures to be in place to ensure compliance with Federal and State requirements. 2 CFR ? 200.332(d) (January 1, 2022) requires the pass-through entity to do the following: Monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved. 2 CFR ? 200.430(i)(1) (January 1, 2022) states the following, in relevant part: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; * * * * (vii) Support the distribution of the employee?s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards . . . [.] Per 2 CFR ? 200.405(a) (January 1, 2022), ?A cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received.? Condition: The Agency lacked adequate documentation to support that payments were for allowable activities and in accordance with Federal cost principles. A similar finding was noted in the prior audit. Repeat Finding: 2021-065 Questioned Costs: $64,704 known Statistical Sample: No Context: We tested 25 payments to 22 subrecipients and three vendors. The Agency performed financial desk reviews for subrecipients; however, the reviews tested were not adequate. When desk reviews were not adequate, we provided the Agency with the opportunity to obtain additional support from the subrecipient; however, adequate support was not obtained. We noted the following: ? For nine subrecipients tested, documentation was not adequate to support that personnel charges were allowable and in accordance with Federal cost principles. The Agency did not have timesheets, time certifications, or other payroll documentation on file for all reimbursement requests. In some cases, payroll documentation was on file, but there was not adequate support to verify that the correct amount was charged to the program, as timesheets were not sufficient to identify time allocated to the program when the employee did not work entirely on the Federal program. In addition, for some subrecipients there was not sufficient documentation to support the benefits reimbursed. ? For one subrecipient tested, fuel costs and maintenance expenses were not adequately supported. The expenses were not supported by invoices. ? For seven subrecipients tested, capital and nonoperating costs were not adequately supported. The Agency did not obtain documentation to support the percentage of nonoperating expenditures allocated to the program. Subrecipients may share building space with other city or county offices and, therefore, may be charged a portion of the rent and utilities. While this is allowable, the Agency must obtain documentation to support that the percent allocated to the transit program is reasonable; however, such supporting documentation was not available. We also noted that one subrecipient was improperly reimbursed for sales taxes. The sample population totaled $15,537,764, which included $12,810,135 paid to 60 subrecipients and $2,727,629 vendor payments. Federal payment errors noted in the sample totaled $24,600. The total Federal sample tested was $353,695. Based on the sample tested, the dollar error rate was 6.96% ($24,600/$353,695), which estimates the potential dollars at risk for fiscal year 2022 to be $1,081,428 (dollar error rate multiplied by population). North Fork Area Transit During the course of our audit, we became aware of potential fraud related to the North Fork Area Transit (NFAT), a subrecipient of the Agency. On December 15, 2022, the Director of NFAT was suspended. A warrant was issued for his arrest the next day, alleging theft of up to $1 million between April and December 2022. From April 1, 2022, through June 30, 2022, the Program reimbursed NFAT a total of $582,587. As a result, we selected the April 2022 reimbursement paid to NFAT in June 2022, totaling $101,519, for additional testing. During that testing we identified $40,104 in questioned costs due to the following: ? For all four non-operating personnel (director and managers), documentation was inadequate to support that personnel charges were allowable and in accordance with Federal cost principles, as the timesheets identified only times in and out and did not specify what work the nonoperating employee was performing for the Federal grant. Questioned costs due to the lack of support for nonoperating personnel totaled $24,104. ? A $20,000 payment for vehicle insurance was reported; however, there was no documentation to support how the amount was determined or why it was reasonable. Furthermore, the $20,000 paid was inconsistent with past vehicle insurance payments. We observed a check in March 2022 for $600 with the description that it was for March bus insurance, and previous testing identified $600 bus insurance checks in August 2020 and August 2021. As a result, we question the Federal share of $16,000. ? We also noted inconsistencies in supporting documentation for operating personnel (drivers and dispatchers). Variances were noted between timesheet hours and the payroll register. Due to the NFAT concerns, the APA has now commenced a thorough review of this entire matter, which will be reported separately at a later date. Cause: Procedures were not adequate to ensure that costs were in accordance with Federal requirements. Effect: Increased risk for errors or misuse of funds. Recommendation: We recommend the Agency strengthen subrecipient monitoring procedures. We further recommend the Agency improve procedures to ensure expenditures are allowable and in accordance with Federal regulations. Management Response: The NDOT Local Assistance Division has increased transit staff by 1.5 FTEs for a total of 3.5 FTEs dedicated to reviewing monthly invoices. NDOT continues to engage and educate transit recipients. In late 2022, the North Fork Area Transit (NFAT) Board began an internal review process which revealed an inappropriate use of funds and authorities were notified. In December 2022, the NFAT Board engaged NDOT and requested assistance from the Mobility Management Team following the allegation. The Mobility Management Team is assisting the NFAT Board in managing operations, review of existing reporting and financial policies, and review and update of step-by-step checks and balances process. NDOT is financially supporting the Mobility Management Team in an effort to support and resume services at NFAT.
2022-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Child Nutrition Cluster ? CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Time records provided to support salaries and wages charged to the school lunch revolving fund were not approved by supervisory personnel. Cause: The District did not assign the approval of federal payroll documentation to any employee. Effect: Lack of supervisory approval of time records may lead to errors in charging salaries and wages to the federal program. Questioned Costs: None Recommendation: The District should implement procedures to have supervisory personnel approve time records for all employees? whose salaries and wages are charged to the school lunch revolving fund. Views of Responsible Official: Management agrees with the finding.
2022-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Child Nutrition Cluster ? CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Time records provided to support salaries and wages charged to the school lunch revolving fund were not approved by supervisory personnel. Cause: The District did not assign the approval of federal payroll documentation to any employee. Effect: Lack of supervisory approval of time records may lead to errors in charging salaries and wages to the federal program. Questioned Costs: None Recommendation: The District should implement procedures to have supervisory personnel approve time records for all employees? whose salaries and wages are charged to the school lunch revolving fund. Views of Responsible Official: Management agrees with the finding.
2022-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Child Nutrition Cluster ? CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Time records provided to support salaries and wages charged to the school lunch revolving fund were not approved by supervisory personnel. Cause: The District did not assign the approval of federal payroll documentation to any employee. Effect: Lack of supervisory approval of time records may lead to errors in charging salaries and wages to the federal program. Questioned Costs: None Recommendation: The District should implement procedures to have supervisory personnel approve time records for all employees? whose salaries and wages are charged to the school lunch revolving fund. Views of Responsible Official: Management agrees with the finding.
2022-001 U.S. Department of Agriculture Passed-through the Commonwealth of Massachusetts Department of Elementary and Secondary Education Child Nutrition Cluster ? CFDA 10.553 & 10.555 Significant Deficiency in Internal Controls Over Compliance Criteria: Per 2 CFR section 200.430(i) of the Uniform Guidance, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Time records provided to support salaries and wages charged to the school lunch revolving fund were not approved by supervisory personnel. Cause: The District did not assign the approval of federal payroll documentation to any employee. Effect: Lack of supervisory approval of time records may lead to errors in charging salaries and wages to the federal program. Questioned Costs: None Recommendation: The District should implement procedures to have supervisory personnel approve time records for all employees? whose salaries and wages are charged to the school lunch revolving fund. Views of Responsible Official: Management agrees with the finding.
2022-001: Procurement Policy and Procedures Condition: Several purchases were made in excess of the micro purchase threshold ($10,000). The Organization could not provide documentation to show they obtained quotes, or the reason quotes were not obtained, or if they gave preference to minority or women-owned businesses. Cause: The Organization has not established a written procurement policy. Criteria: The Code of Federal Regulations requires that entities receiving federal funding have a written procurement policy. The required elements of the procurement policy are detailed out in the Electronic Code of Federal Regulations (eCFR) under Title 2, Subtitle A, Part 200, Subpart D, 200.317 thru 200.327. Several other areas require written policies: financial management (200.302), federal payment (200.305), compensation-personal services (200.430), compensation-fringe benefits (200.431), relocation costs of employees (200.464), and travel costs (200.475). Effect: Lack of such policies increases the risk of purchasing items at higher prices than may have been necessary, increases the risk of limiting competition, and increases the risk of waste and abuse. Perspective Information: The need for a procurement policy was brought to the CEO's attention in the fall of 2021. The CEO does believe the spirit of the procurement requirements were met. Recommendations: We recommend quotes are obtained whenever possible when purchases are expected to be between $10,000 and $250,000. If purchases are to equal or exceed $250,000, the proper bidding procedures should be followed. Bidding procedures, quotes, and efforts to give preference to minority or women-owned businesses should be documented, including documenting if bids or quotes could not be obtained or the reasons why bids or quotes were not obtained. We also recommend a procurement policy is established as soon as possible and an individual is assigned to monitor the implementation of the policy. Views of Responsible Officials and Planned Corrective Actions: The Club agrees with this finding. Their intent is to create and implement a procurement policy that complies with the Code of Federal Regulations as soon as possible and add the proper documentation for purchases exceeding the micro purchase threshold beginning with fiscal year 2023. See Corrective Action Plan.
2022-001: Procurement Policy and Procedures Condition: Several purchases were made in excess of the micro purchase threshold ($10,000). The Organization could not provide documentation to show they obtained quotes, or the reason quotes were not obtained, or if they gave preference to minority or women-owned businesses. Cause: The Organization has not established a written procurement policy. Criteria: The Code of Federal Regulations requires that entities receiving federal funding have a written procurement policy. The required elements of the procurement policy are detailed out in the Electronic Code of Federal Regulations (eCFR) under Title 2, Subtitle A, Part 200, Subpart D, 200.317 thru 200.327. Several other areas require written policies: financial management (200.302), federal payment (200.305), compensation-personal services (200.430), compensation-fringe benefits (200.431), relocation costs of employees (200.464), and travel costs (200.475). Effect: Lack of such policies increases the risk of purchasing items at higher prices than may have been necessary, increases the risk of limiting competition, and increases the risk of waste and abuse. Perspective Information: The need for a procurement policy was brought to the CEO's attention in the fall of 2021. The CEO does believe the spirit of the procurement requirements were met. Recommendations: We recommend quotes are obtained whenever possible when purchases are expected to be between $10,000 and $250,000. If purchases are to equal or exceed $250,000, the proper bidding procedures should be followed. Bidding procedures, quotes, and efforts to give preference to minority or women-owned businesses should be documented, including documenting if bids or quotes could not be obtained or the reasons why bids or quotes were not obtained. We also recommend a procurement policy is established as soon as possible and an individual is assigned to monitor the implementation of the policy. Views of Responsible Officials and Planned Corrective Actions: The Club agrees with this finding. Their intent is to create and implement a procurement policy that complies with the Code of Federal Regulations as soon as possible and add the proper documentation for purchases exceeding the micro purchase threshold beginning with fiscal year 2023. See Corrective Action Plan.
2022-001: Procurement Policy and Procedures Condition: Several purchases were made in excess of the micro purchase threshold ($10,000). The Organization could not provide documentation to show they obtained quotes, or the reason quotes were not obtained, or if they gave preference to minority or women-owned businesses. Cause: The Organization has not established a written procurement policy. Criteria: The Code of Federal Regulations requires that entities receiving federal funding have a written procurement policy. The required elements of the procurement policy are detailed out in the Electronic Code of Federal Regulations (eCFR) under Title 2, Subtitle A, Part 200, Subpart D, 200.317 thru 200.327. Several other areas require written policies: financial management (200.302), federal payment (200.305), compensation-personal services (200.430), compensation-fringe benefits (200.431), relocation costs of employees (200.464), and travel costs (200.475). Effect: Lack of such policies increases the risk of purchasing items at higher prices than may have been necessary, increases the risk of limiting competition, and increases the risk of waste and abuse. Perspective Information: The need for a procurement policy was brought to the CEO's attention in the fall of 2021. The CEO does believe the spirit of the procurement requirements were met. Recommendations: We recommend quotes are obtained whenever possible when purchases are expected to be between $10,000 and $250,000. If purchases are to equal or exceed $250,000, the proper bidding procedures should be followed. Bidding procedures, quotes, and efforts to give preference to minority or women-owned businesses should be documented, including documenting if bids or quotes could not be obtained or the reasons why bids or quotes were not obtained. We also recommend a procurement policy is established as soon as possible and an individual is assigned to monitor the implementation of the policy. Views of Responsible Officials and Planned Corrective Actions: The Club agrees with this finding. Their intent is to create and implement a procurement policy that complies with the Code of Federal Regulations as soon as possible and add the proper documentation for purchases exceeding the micro purchase threshold beginning with fiscal year 2023. See Corrective Action Plan.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s time and effort is documented; however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 3 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
Criteria or specific requirement: Per guidance: 2 CFR 200.430, (i) Standards for Documentation of Personnel Expenses, (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: We noted the University?s Time and Effort is documented, however, for salaried employees, the certification of actual time and effort is not timely. Internal controls did not detect these instances of noncompliance. Questioned costs: None Context: We noted the University?s time and effort is estimated at the start of each fiscal year in the initial time and effort budget. Then, at the end of the year, a certification of actual time and effort is performed. For 2 of the 60 tested, the certification of time and effort occurred more than 365 days after the selected pay date. Cause: The University stated there was a decrease in staff due to COVID-19 and furloughs that prevented implementation of bi-annual time and effort certification for salaried employees. Effect: The University?s system of internal control does not provide reasonable assurance that payroll charges are based upon actual time incurred. As such, it is not in compliance with the standard for documentation of personnel expenses. In addition, it could inadvertently be allocating personnel expenses inaccurately and improperly to federal awards. Repeat finding: Yes Recommendation: We recommend that the University increase the time and effort certification process to be more timely. View of responsible official: The University agrees with the finding.
2022-004 Federal Agency: U.S. Department of Education Federal Programs: Education Stabilization Fund Assistance Listing Number: 84.425U Pass-Through Agency: Rhode Island Department of Elementary and Secondary Education Pass-Through Number: 4872-505020-201 Award Period: July 1, 2021 – June 30, 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non- Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), 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, Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, Comply with the established accounting policies and practices of the non-Federal entity, Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Condition: Payroll costs charged to the grant showed no evidence of approval. Questioned Costs: Below the reportable limit. Context: For 16 out of 60 payroll costs charged to the grant, time sheets or other documentation was not available to support evidence of approval for time worked. Cause: The City's procedures were not sufficient to ensure that payroll charges were appropriately approved and documented. Effect: Payroll costs charged to the grant may not be allowable. Recommendation: We recommend the City review and enhance internal controls and procedures to ensure that approval for payroll charges is documented and maintained. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004 Federal Agency: U.S. Department of Education Federal Programs: Education Stabilization Fund Assistance Listing Number: 84.425U Pass-Through Agency: Rhode Island Department of Elementary and Secondary Education Pass-Through Number: 4872-505020-201 Award Period: July 1, 2021 – June 30, 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non- Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), 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, Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, Comply with the established accounting policies and practices of the non-Federal entity, Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Condition: Payroll costs charged to the grant showed no evidence of approval. Questioned Costs: Below the reportable limit. Context: For 16 out of 60 payroll costs charged to the grant, time sheets or other documentation was not available to support evidence of approval for time worked. Cause: The City's procedures were not sufficient to ensure that payroll charges were appropriately approved and documented. Effect: Payroll costs charged to the grant may not be allowable. Recommendation: We recommend the City review and enhance internal controls and procedures to ensure that approval for payroll charges is documented and maintained. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004 Federal Agency: U.S. Department of Education Federal Programs: Education Stabilization Fund Assistance Listing Number: 84.425U Pass-Through Agency: Rhode Island Department of Elementary and Secondary Education Pass-Through Number: 4872-505020-201 Award Period: July 1, 2021 – June 30, 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non- Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), 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, Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, Comply with the established accounting policies and practices of the non-Federal entity, Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Condition: Payroll costs charged to the grant showed no evidence of approval. Questioned Costs: Below the reportable limit. Context: For 16 out of 60 payroll costs charged to the grant, time sheets or other documentation was not available to support evidence of approval for time worked. Cause: The City's procedures were not sufficient to ensure that payroll charges were appropriately approved and documented. Effect: Payroll costs charged to the grant may not be allowable. Recommendation: We recommend the City review and enhance internal controls and procedures to ensure that approval for payroll charges is documented and maintained. Views of Responsible Officials: There is no disagreement with the audit finding.
2022-004 Federal Agency: U.S. Department of Education Federal Programs: Education Stabilization Fund Assistance Listing Number: 84.425U Pass-Through Agency: Rhode Island Department of Elementary and Secondary Education Pass-Through Number: 4872-505020-201 Award Period: July 1, 2021 – June 30, 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non- Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), 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, Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, Comply with the established accounting policies and practices of the non-Federal entity, Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non- Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)." Condition: Payroll costs charged to the grant showed no evidence of approval. Questioned Costs: Below the reportable limit. Context: For 16 out of 60 payroll costs charged to the grant, time sheets or other documentation was not available to support evidence of approval for time worked. Cause: The City's procedures were not sufficient to ensure that payroll charges were appropriately approved and documented. Effect: Payroll costs charged to the grant may not be allowable. Recommendation: We recommend the City review and enhance internal controls and procedures to ensure that approval for payroll charges is documented and maintained. Views of Responsible Officials: There is no disagreement with the audit finding.
FINDING 2022-003 Subject: Title I Grants to Local Educational Agencies - Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listings Number: 84.010 Federal Award Numbers and Years (or Other Identifying Numbers): S010A190014 FY2021, S010A200014 FY2021 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Condition and Context Costs charged to grant funds must be adequately documented. To adequately document payroll expenses charged to the grant fund, contracts or other documentation supporting the employees' approved rates of pay are necessary. The School Corporation utilized a financial software system that has two different sides, an employee portal side and an administrator side. Employee contracts are approved by the employee, the Superintendent of Schools, and the President of the School Board within the system on the employee portal side. Once approved, the data in the employee portal side is fed into a process in the administrator side. The School Corporation could not provide contracts for 10 of 15 employees tested, as the contracts were not properly archived in the financial software used to electronically approve and archive employment contracts. As such, we could not verify the employees were paid their contracted rate for hours spent working on grant-related activities. This resulted in known questioned costs of $203,488. The lack of internal controls and noncompliance were systemic issues throughout the audit period. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." INDIANA STATE BOARD OF ACCOUNTS 24 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) 2 CFR 200.334 states in part: "Financial records, supporting documents, statistical records, and all other non-Federal entity records pertinent to a Federal award must be retained for a period of three years from the date of submission of the final expenditure report or, for Federal awards that are renewed quarterly or annually, from the date of the submission of the quarterly or annual financial report, respectively, as reported to the Federal awarding agency or pass-through entity in the case of a subrecipient. . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(i) states in part: "Standards for documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. . . ." Cause A proper system of internal controls was not designed by management of the School Corporation. Embedded within a properly designed and implemented internal control system should be internal controls consisting of policies and procedures. Policies reflect the School Corporation's management statements of what should be done to effect internal controls, and procedures should consist of actions that would implement these policies. INDIANA STATE BOARD OF ACCOUNTS 25 SOUTH BEND COMMUNITY SCHOOL CORPORATION SCHEDULE OF FINDINGS AND QUESTIONED COSTS (Continued) Effect Without the proper implementation of an effectively designed system of internal controls, the internal control system cannot be capable of effectively preventing, or detecting and correcting, material noncompliance. As a result, not all employment contracts could be presented for audit nor could documentation be provided to support time charged to the grant. Noncompliance with the provisions of federal statutes, regulations, and the terms and conditions of the federal award could result in the loss of future federal funding to the School Corporation. Questioned Costs There were known questioned costs of $203,488 as identified in Condition and Context. Recommendation We recommended that management of the School Corporation establish a proper system of internal controls and develop policies and procedures to ensure contracts and certifications, as appropriate, are retained to support the amounts paid from Title I program funds. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report. Auditor's Response The alternative documentation provided was a snapshot from the administrator side of the financial software system; however, the original source document, which was the contract that was approved by the employee, the Superintendent of Schools, and the President of the School Board, was not provided to substantiate the amounts in the administrator side of the financial software system. We reaffirm our finding and will review the status of the finding during our next audit.