Finding 2021-006 Payroll Documentation - Activities Allowed and Unallowed, Allowable Costs/Cost Principles – Noncompliance and Material Weakness in Internal Control over Compliance Agency Department of the Treasury ALN 21.019 Program COVID-19 - Coronavirus Relief Fund Award Year FY 2021 Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic Development Pass-Through Entity Identifying Number 20-CRF-024 Criteria 2 CFR 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control designed to reasonably ensure compliance with federal statutes, regulations, and terms and conditions of the federal award. 2 CFR 200.430 requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Per 2 CFR 200.430, these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated and be incorporated into the official records of the non-Federal entity. Condition During our testing of payroll disbursements, we noted the following exceptions: - 20 out of the 60 expenditures sampled did not have properly maintained personnel action forms signed by the employee. - one out of the 60 expenditures sampled had an employee whose pay rate had decreased; however, no adjustment was made in the payroll system to reflect this decrease. Cause Internal controls were not in place throughout the entire fiscal year to ensure that all personnel action forms were reviewed and signed by the designated individuals and the payroll system is updated to reflect changes in pay rates. Effect or potential effect Federal funds could be expended for unallowed activities and unallowed costs. Questioned costs Below the reporting threshold. Context We tested a sample of 60 payroll transactions totaling to $148,729 from a population of 454 payroll transactions. The total amount of payroll expenditures charged to the program in fiscal year 2021 were $1,220,281. We noted 21 exceptions as noted in the condition. This is a condition identified per review of City's compliance with the specified requirements not using a statistically valid sample. Identification as a repeat finding This is a repeat finding from prior year. This was reported as finding 2020- 005 in the 2020 report. Recommendation Management should ensure the most current personnel action forms are reviewed and signed by the designated personnel. Views of responsible officials Management concurs with the finding. Management will review current employee pay rates within the payroll module and ensure the rates agree to the most current pay rate as specified in the employee’s current personnel action form.
2021-007 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Numbers: 84.425D Passed-through Identification: #20204815 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the district, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee who did not have documentation to support the distribution of the employee’s time spent on grant activities. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the distribution of the employee’s wages paid using grant funds. Questioned Costs: $3,136 Repeat Finding: No Recommendation: We recommend that documentation be retained to support the distribution of salaries and wages for all employees paid using grant funds. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.
Finding #SA2021-002: Support for Payroll Costs Charged to Grant Assistance Listing Number: 20.507 Assistance Listing Title: Federal Transit – Formula Grants (Urbanized Area Formula Program) Name of Federal Agency: Department of Transportation - Federal Transportation Administration Federal Award Identification Number: CA-2021-009-01, CA-2020-005-01, CA-2020-005-02 Criteria: 2 CFR Part 200.430(i), “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” requires that grantees adhere to the following, “Payroll systems must be based on records that accurately reflect the work performed” and “be supported by a system of internal controls that provides reasonable assurances that charges are accurate, allowable, and properly allocated...” The payroll records must be a part of the official record, reflect the employee’s total activity and show if the specific activity of the person is being paid by more than one federal award. Section 200.430(i)(viii) indicates that budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that the system for establishing the estimates produces reasonable approximations of the activity actually performed, among other requirements. Condition: We noted that the payroll costs for one employee were charged to the program based on a flat rate of 25% of the payroll costs, rather than based on the actual hours worked. Payroll costs, including salary and benefits, charged to the program during fiscal year 2021 totaled $8,997. Questioned Costs: We question costs of $8,997, which consists of the payroll and fringe benefits charged to the grant for the employee based on the flat percentage of pay and benefits for the full fiscal year. Effect: The City is not in compliance with the payroll documentation requirements set forth in 2 CFR Part 200.430(i). Cause: We understand that grant program staff were not aware of the payroll documentation requirement and due to staff turnover, Finance staff cannot determine whether any such documentation exists. Identification as a repeat finding: Yes, since 2019 Recommendation: The City should establish procedures to ensure that payroll costs charged to the program are documented in accordance with 2 CFR Part 200.430 for the Federal Transit-Formula Grants program and all federal grant programs. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding #SA2021-003: Pro-Rating Annual Payroll Costs Charged to Grant Assistance Listing Number: 21.019 Assistance Listing Title: COVID-19 - Coronavirus Relief Fund Name of Federal Agency: Department of Treasury Pass Through Entity: California Department of Finance Federal Award Identification Number: 390 Criteria: 2 CFR Part 200.430(i), “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” requires that grantees adhere to the following, “Payroll systems must be based on records that accurately reflect the work performed” and “be supported by a system of internal controls that provides reasonable assurances that charges are accurate, allowable, and properly allocated...” The payroll records must be a part of the official record, reflect the employee’s total activity and show if the specific activity of the person is being paid by more than one federal award. Condition: The City charged a portion of three months of police and fire salaries to the Coronavirus Relief Fund program, and we noted one employee’s pay during that time included an annual stipend of $12,333, of which 33% was charged to the federal award, or $4,070. Although the pay was related to the employee’s gross pay under the applicable memorandum of understanding for the period, since it was an annual amount paid during the time charged to the grant, it should have been pro-rated to charge only 25% of the stipend to the federal award. Therefore, only 33% of that 25%, or $1,017 should have been charged to the federal award. After the issue was discovered, we reviewed the other payroll charges for amounts that did not appear to be in line with regular salaries and noted the payroll charges included annual stipends for three employees totaling $35,905 of which 67% was charged to the federal award, or $24,061. Those amounts should have been prorated as noted above, therefore only 67% of 25%, or $6,015 should have been charged to the federal award. And, one employee’s vacation buy back, compensatory time off buy back, furlough used and administrative leave pay totaling $50,679 was charged to the grant, which does not appear to be related to the three-month period of salaries charged to the grant. Questioned Costs: We question costs in the amounts of $3,053, $18,046 and $50,679, for total questioned costs of $68,724. Effect: The City is not in compliance with the payroll documentation requirements set forth in 2 CFR Part 200.430(i). Cause: We understand that City staff compiled the report of eligible public safety payroll costs to be charged to the federal award and did not analyze to see if it included annual pay amounts that should be pro-rated for the time period of salaries charged. Recommendation: The City should establish procedures to ensure that payroll costs charged to the program are pro-rated when the costs cover a time period that is longer than that covered by or being charged to the grant award, to ensure that costs are allocated equitably between federal and non-federal funding sources. In addition, the City should work with the grantor to determine if other eligible public safety payroll costs are allowed to replace the ineligible costs, or if the questioned costs need to be returned to the grantor. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2021-003: Activities Allowed or Unallowed - Material Weakness Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS26638 - 2020 and 2021, H8DCS35487 - 2020, H8CCS34364 - 2020, H8ECS38373 - 2020, and H8F40829 - 2021 Criteria In accordance with 2 CFR, Part 200.430(i)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee's time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 21 instances where there was no formal approval of payrates and where they were not appropriately reflected in the payroll registers, 15 instances where timecards were not appropriately reflected in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of five transactions tested, we noted five instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2020-003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2020-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our testing of payroll transactions charged to the program, we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. Additionally, we noted that nearly all employees tested did not have approved pay rates in their personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In all cases noted, the employees were under paid. Repeat finding: This is a repeat of Finding 2019-009, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2020-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our testing of payroll transactions charged to the program, we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. Additionally, we noted that nearly all employees tested did not have approved pay rates in their personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In all cases noted, the employees were under paid. Repeat finding: This is a repeat of Finding 2019-009, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2020-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our testing of payroll transactions charged to the program, we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. Additionally, we noted that nearly all employees tested did not have approved pay rates in their personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In all cases noted, the employees were under paid. Repeat finding: This is a repeat of Finding 2019-009, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2020-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Treasury Federal Programs: Coronavirus Relief Fund CFDA Numbers: 21.019 Award Number: SLT0591/0845/1405 Award Year: 2020 Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our testing of payroll transactions charged to the program, we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. Additionally, we noted that nearly all employees tested did not have approved pay rates in their personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In all cases noted, the employees were under paid. Repeat finding: This is a repeat of Finding 2019-009, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan.
Finding 2020-005 - Material Weakness - Missing Supporting Documentation CFDA Number and Title: 84.287 Twenty-First Century Community Learning Centers Applicable Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Criteria: According to 2 CFR §200.430(i), charges to federal awards for salaries 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. Additionally, the Twenty-First Century Community Learning Centers program requires grantees to maintain documentation that supports personnel costs charged to the grant, including time and effort records for staff funded in whole or in part by federal funds. Condition: During the audit of expenditures under the Twenty-First Century Community Learning Centers program pay records, such as timesheets, pay rates or equivalent documentation, which support time and effort charged to the grant were not available for review. The missing files had been stored on a drive maintained by a former employee and could not be recovered. Cause: The City did not retain or migrate payroll documentation from the former employee’s system, resulting in the loss of critical records necessary to support grant expenditures. Effect or Potential Effect: Without adequate documentation, the organization cannot substantiate the allowability of payroll costs charged to the 21st CCLC grant. This may result in questioned costs and potential repayment or corrective action requirements from the granting agency. Questioned Costs: $120,064 represent salaries charged to the grant where no timesheets could be provided. Context: The ten missing timesheets were for specific pay periods throughout the fiscal year. The questioned costs represent those employee’s salaries charged to the grant for the year. Recommendation: The City should establish and enforce a formal records retention policy that ensures all grant-related documentation, including payroll and time and effort records, is preserved and accessible. Additionally, procedures should be implemented to verify that personnel costs charged to the grant comply with federal requirements and program-specific guidance. Management’s Responses: See corrective action plan.
Criteria: The requirements for allowable costs related to wages and salaries are contained in 2 CFR Section 200.430. This states that salaries and wages charged to federal awards must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During the year under audit, PAX did not have a time and effort reporting system that met the requirements of the federal cost principles. Citation: 2 CFR 200.430 Cause: PAX did not have an effective internal control system in place for monitoring and documenting wages and salaries charged to the federal awards. Effect: PAX did not maintain adequate documentation to support salaries charged to the federal awards throughout the year. However, they provided attestations and other support to demonstrate that the salaries and wages were accurate, allowable, and properly allocated after year-end as part of the audit process. Questioned Costs: PAX charged $1,109,466 of wages and salaries to the major program. Context: This was a universal matter that impacted the entity as a whole. Repeat Finding: No Recommendation: We recommend that management establish internal control process, such as a time sheet reporting system, to capture which grant each employee spends time on. View of Responsible Officials: See Corrective Action Plan attached.
Criteria: • • §2 CFR 200.430 (i) Standards for Documentation of Personnel Expenses, establishes that “(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;” • • The Human Resources manuals that establish the hire procedures for the employee’s Authority, in its article 6.2 Job Description, establishes that the Authority shall prepare and keep up to date, for each authorized position in the career service, a clear and precise description of the essential and marginal duties and responsibilities, degree of authority, responsibility and supervision assigned to it. Condition: Four (4) employees, out of a sample of fifteen (15) files examined, had no job descriptions. Cause: The Program did not follow up the established procedures for hiring of personnel. Effects: Condition may result in noncompliance with the requirements of record retention and with internal controls as in place for COR3. Questioned Costs: None Recommendation: We recommended management to monitor the implementation of procedures in place to maintain updated employee’s personal file.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Criteria: • • §2 CFR 200.430 (i) Standards for Documentation of Personnel Expenses, establishes that “(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;” • • The Human Resources manuals that establish the hire procedures for the employee’s Authority, in its article 6.2 Job Description, establishes that the Authority shall prepare and keep up to date, for each authorized position in the career service, a clear and precise description of the essential and marginal duties and responsibilities, degree of authority, responsibility and supervision assigned to it. Condition: Four (4) employees, out of a sample of fifteen (15) files examined, had no job descriptions. Cause: The Program did not follow up the established procedures for hiring of personnel. Effects: Condition may result in noncompliance with the requirements of record retention and with internal controls as in place for COR3. Questioned Costs: None Recommendation: We recommended management to monitor the implementation of procedures in place to maintain updated employee’s personal file.
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Grantor: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), COVID-19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care), Grants for New and Expanded Services under the Health Center Program CFDA Numbers: 93.224 and 93.527 Criteria According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (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) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal awards for salaries and wages were not supported by properly approved payrates, and timesheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by properly approval. Cause The Center’s internal controls over payroll were not consistently followed to ensure payrates were approved and timesheets agreed to payroll registers. Additionally, the Center’s internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect Failure to ensure accurate wage and allocation of employee time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in a non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over allowable costs. Out of the 25 transactions tested, we noted 15 instances where there was no formal approval of payrates, 4 instances where timecards did not appropriately reflect in the payroll registers, and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 3 transactions tested, we noted 3 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the timesheet and payrates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently enforce its internal controls over nonpayroll expenditures to ensure all expenditures are approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively CFDA Numbers: 15.021 and 93.441, respectively Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD) Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State. Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively CFDA Numbers: 15.021 and 93.441, respectively Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD) Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State. Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively CFDA Numbers: 15.021 and 93.441, respectively Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD) Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State. Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan
Finding 2019-009 Lack of Internal Controls Over Activities Allowed or Unallowed and Allowable Costs/Costs Principles Federal Agencies: U.S. Department of the Interior and U.S. Department of Health and Human Services Federal Programs: Consolidated Tribal Government (CTG) and Indian Self-Determination (ISD), respectively CFDA Numbers: 15.021 and 93.441, respectively Award Numbers: A16AV00375 and A19AV00503 (CTG), and 243-12-0006 (ISD), respectively Award Years: 2016 and 2019 (CTG), and 2019 and 2020 (ISD) Type of Finding: Material weakness in internal control over compliance and material noncompliance. Criteria: Per 2 CFR part 200.430, personnel expenses recorded into a federal program must be based on records that accurately reflect the work performed. Hourly employees should be paid for hours worked and documented through a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Internal controls procedures should be in place to ensure that all cash disbursements and payroll transactions are adequately supported by documentation, approved with accurate account coding on the approval form, retained for support either in the vendor, employee, or program file. Condition and Context: During our payroll allowable costs testing we noted that the Community is incorrectly calculating the gross pay from the timesheets. The Community is taking the employee’s hourly rate multiplied by the hours worked with minutes calculated using 100 minutes per hour instead of 60 minutes. This results in an underpayment on any partial hour worked. We tested 13 payroll transactions charged to CTG program and 25 payroll transactions charged to the ISD program and noted that all transactions tested did not have approved pay rates in the employee personnel files. Cause: Lack of internal controls over payroll transactions. Effect: Lack of internal control over payroll transactions poses the risk that the Community will expend federal funds for non-grant purposes. Questioned costs: None noted. In cases where an employee worked a partial hour, the employees were under paid. In reviewing the pay rates for each of the employees, they appeared reasonable and consistent with similar entities across the State. Repeat finding: This is a repeat of Finding 2018-008, therefore, we believe this to be a systemic issue. Recommendation: We recommend that management implement policies and procedures to ensure that all paychecks are supported by an approved pay rate, hours worked agree to the hours paid and are accurately calculated. Management Response: Management agrees with this finding, see Corrective Action Plan