2024-001 Allowable Compensation Costs Material Weakness in Internal Control Over Compliance 16.575 Crime Victim Assistance Criteria – 2 CFR Section 200.403 states that costs must be necessary and reasonable for the performance of the federal award. Costs must also conform to any limitations or exclusions set forth in the federal award as to types or amount of cost items. In addition, 2 CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and Context – Through a financial review by a pass-through entity, compensation costs of $32,302 were identified as unallowed under the terms of the federal award for the budget period July 1, 2023 to June 30, 2024. These costs included $19,259 in calendar year 2023 and $13,043 in calendar year 2024. Cause – CCAHT did not have internal controls in place to ensure that salaries and wages claimed for reimbursement was accurate, allowable, and properly allocated. Effect – CCAHT submitted salaries and wages for reimbursement that were unallowed under the terms of the federal award. Questioned Costs – This resulted in known questioned costs of $32,302. Repeat Finding - No Recommendations – We recommend CCAHT implement internal controls to ensure all costs charged to the program are accurate, allowable, and properly allocated in accordance with the terms of the federal award, and that there is proper review and approval. Management’s Response – Management concurs with the audit recommendations. See Management’s Corrective Action Plan.
Finding No. 2024-001: Allowable Cost/Activities (Time and effort) Federal Program Title: U.S. Department of Health and Human Services Awards: ALN 93.527 Health Center Program Cluster Criteria: 2 CFR 200.430 established that all salaries and wages charged to Federal awards must be supported by a system of internal controls that provides reasonable assurance that the personnel costs incurred are accurate, allowable, and properly allocated. This includes a system to demonstrate that total compensation paid to individual employees is reasonable according to work performed. Condition: During audit procedures, we tested 40 payroll costs charged to the ALN 93.527 Health Center Program Cluster. Time and effort reporting could not be located for the 7 employees that were charged to Grant H2E for the period September – December 2024 which documented the distribution of the employee’s salary and wages among specific grants by work performed. Cause: The Organization did not follow the policies and procedures in place related to obtaining time and effort certifications from employees. Effect: The federal award may be overcharged or undercharged if actual effort differs from time charged to the award. Questioned Costs: $122,765 Context/Sampling: A sample of 40 payroll transactions were selected for testing. For each transaction, a timecard was obtained for all selected transactions which verified that the employees worked the hours to support the charges to the grant. While all timecards documented total hours worked, none included documentation of the specific time allocated to the federal program. Additionally, time and effort certifications were obtained for 33 of the 40 sampled employees. However, the Organization did not obtain time and effort certifications for the remaining 7 employees whose salaries were charged to the H2E grant. The sample was selected using non-statistical sampling methods and was not intended to be, nor should it be considered, a statistically valid sample. Repeat Finding: No Recommendation: Management should strengthen its internal controls over payroll charges to federal awards by ensuring consistent adherence to its time and effort certification policies as well as conduct periodic reviews of payroll documentation to verify compliance with established policies and federal requirements. Views of Responsible Officials and Planned Corrective Action: There is no disagreement with the audit finding.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024-001: Allowable Cost/Cost Principles – Enhanced Documentation of Cost Allocation (Repeat Finding) Criteria or Specific Requirements Per 2 CFR Part 200.430 (g)(1), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee's salary or wages among specific activities or cost objectives. Per Uniform Guidance Compliance Supplement part 6 – Internal Control, non-federal entities are required to establish and maintain internal control over the federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition Description A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Of the 50 employee monthly reimbursements (10 for ALN 14.241; 40 for ALN 93.914) selected for allowable costs testwork, we noted 2 employee monthly reimbursements (1 for ALN 14.241; 1 for ALN 93.914) for where the hours reported per the timesheet did not agree with the hours reported in the related request for reimbursement invoices. The hours reported per the reimbursement invoices were greater than the hours reported per the timesheets. The Foundation subsequently provided documentation indicating that such differences had been properly corrected in the following month’s reimbursement invoice through an adjustment to the reported hours per the reimbursement invoice. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to the Grants We performed testwork over the Foundation’s implementation of the Corrective Action Plan (CAP) for Finding 2023-001. Per the CAP, the Foundation will perform regular reviews of tracked hours and reconciliations at least quarterly. Of the 18 payroll reimbursement months (for ALN 93.914), and 4 payroll reimbursement months (for ALN 93.940) selected for testwork, we noted a total of 2 months (1 for ALN 93.914; 1 for ALN 93.940) whereby the related reviews of tracked hours were performed more than 90 days after the respective reimbursement month. C. Timecard Lacking Employee and Manager Approvals In performing allowable costs testwork over payroll expenditures, we noted the following: Questioned Costs A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges None. The Foundation corrected the discrepancies in subsequent monthly reimbursements. This issue is considered an internal control finding. B. Improved Documentation of Routinary Reviews of Employee Hours Charged to Grants None. This issue is considered an internal control finding. C. Timecards Lacking Employee and Manager Approvals None. This issue is considered an internal control finding. Cause and Effect A. Improved Documentation for Basis of Cost Allocation for Employee Time Charges Per the Associate Director of Contract Accounting, this was a one-time error in the month’s request for reimbursement invoice. This error was corrected within the grant period and did not result in overbilling the funder. However, since the correction occurred after the Foundation’s fiscal year-end, it resulted in an overstatement of expenditures reported on the SEFA for the year ended December 31, 2024. B. Improved Documentation of Routinary Reviews of Employees' Hours Charged to Grants. Per the Associate Director of Contract Accounting, the routinary review of employee hours occurred. However, there were still reclassifications that needed to be performed beyond the normal review process. The review process was not properly implemented. C. Timecards Lacking Employee and Manager Approvals The identified condition resulted from failure to follow formal procedures requiring both the employee and manager to sign off on the timesheets.
Finding 2024‐002 Significant deficiency in internal controls over compliance related to allowable costs/cost principles compliance requirement. Federal Agency: Department of Treasury Program Title: Community Development Financial Institutions Fund Equitable Recovery Program (CDFI ERP) Federal Assistance Listing Number: 21.033 Award Number: 22ERP061530 Award Period: April 10, 2023 through December 31, 2028 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E require that personnel expenses allocated both directly and indirectly to federal awards be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, properly allocated and supported by adequate documentation based on an after the fact determination. Condition/Context for Evaluation During the year ended December 31, 2024, allocations of compensation expenditures were supported by a predetermined allocation created by a supervising manager responsible for overseeing all employees working on federally funded grants. The internal control system did not include a documented after the fact review of the actual activity conducted by the employee. Effect or Potential Effect HomeSight did not fully comply with the allowable cost principles as specified in 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E, Section 200.430. As a result, there may be charges to awards that do not have adequate allocation support. Questioned Costs Not determinable - HomeSight records lack established procedures of a documented after-the-fact level of activity. Accordingly, it is impossible to determine if there is a variance from pre-determined allocation levels. Cause HomeSight’s internal controls did not ensure that employees time allocated to federal awards was supported by adequate documentation. Repeat Finding Not a repeat finding. Recommendation We recommend that HomeSight implement the necessary internal control that includes processes to perform periodic after-the-fact reviews of charges made to a Federal award based on pre-determined allocation rates. View of Responsible Officials of Auditee Management agrees with the finding and has provided the accompanying corrective action plan.
2024-001: Allowable Costs Federal Agency: U.S. Department of Education Federal Program Name: Special Education – Special Olympics Education Programs Assistance Listing Number: 84.380W Pass-Through Agency: Special Olympics, Inc. Pass-Through Numbers: Y-16-24-800-12, Y-16-24-800-13 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that in one (1) of the eight (8) payroll expenses tested, wages charged to the grant did not match underlying payroll records. Questioned Costs: $101 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted an instance where payroll was not charged to the grants based upon approved actual time spent in the program. Cause: Clerical error in summarizing grant expenditures. Effect: The Organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to salary expenditures charged to a program. Personnel need to reinforce policies and control procedures to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No Recommendation: We recommend that the Organization ensure policies and procedures for reviewing and approving payroll expenditures for grant programs be strengthened to ensure mathematically accuracy. Views of Responsible Officials: There is no disagreement with the audit finding.
2024-001: Allowable Costs Federal Agency: U.S. Department of Education Federal Program Name: Special Education – Special Olympics Education Programs Assistance Listing Number: 84.380W Pass-Through Agency: Special Olympics, Inc. Pass-Through Numbers: Y-16-24-800-12, Y-16-24-800-13 Award Period: January 1, 2024 – December 31, 2024 Type of Finding: • Significant Deficiency in Internal Control Over Compliance • Other Matters Criteria or Specific Requirement: The Compliance Supplement requires that compensation for personal services be charged to the federal grant based upon approved actual time worked on the program and not based on an allocation or budget (2 CFR 200.430(i)). Condition: While performing audit procedures, it was noted that in one (1) of the eight (8) payroll expenses tested, wages charged to the grant did not match underlying payroll records. Questioned Costs: $101 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted an instance where payroll was not charged to the grants based upon approved actual time spent in the program. Cause: Clerical error in summarizing grant expenditures. Effect: The Organization has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to salary expenditures charged to a program. Personnel need to reinforce policies and control procedures to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat Finding: No Recommendation: We recommend that the Organization ensure policies and procedures for reviewing and approving payroll expenditures for grant programs be strengthened to ensure mathematically accuracy. Views of Responsible Officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024-001 Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1640 2021 Pass-Through Agency: Not Applicable Pass-Through Number(s): Not Applicable Award Period: March 3, 2021 – December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: 2 CFR 200.430(g)(1)(iii) requires personnel expenses to reasonably reflect the total activity for which the employee is compensated by the recipient, not exceeding 100 percent of compensated activities. Condition: For one out of 60 selected payroll transactions, we noted the employee had hours charged to the award in excess of actual hours worked with 224 hours charged to the program and only 168 worked. Questioned costs: $2,028. Context: The County identified this issue prior to the audit and attempted to correct it, however an incorrect project code was applied in the correction, so the amount was not removed as intended and resulted in costs charged to the program above what was incurred. Cause: An error was made in the process of allocating costs to this award and another error was made in the process of correcting the error. These errors were not identified in the County’s review process. Effect: The County charged $2,028 to the award that was not based on employee compensation. Repeat Finding: Not a repeat finding. Recommendation: We recommend the County improve the review process over allocating payroll costs to ensure that payroll costs charged were for the proper amounts. Views of responsible officials: There is no disagreement with the audit finding.
2024 001 Activities Allowed or Unallowed and Allowable Costs/Cost Principles U.S. Department of Homeland Security: Passed through the State of New Jersey, Department of Law and Public Safety: Disaster Grants – Public Assistance (Presidentially Declared Disasters) – ALN 97.036 Federal Grant Numbers and Years State of New Jersey pass through number: UH1WX Project #2365 – Award Year 2024 (Application 696220) Statistically Valid Sample: The sample was not intended to be, and was not, a statistically valid sample. Prior Year Findings: 2023-001 Criteria Compliance – Program Specific The Federal Emergency Management Agency (FEMA), as part of the U.S. Department of Homeland Security, evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. (PAPPG v4) Chapter 4, page(s) 51 54; Chapter 6, page(s) 65 & 93 95. Cost must be: • Directly tied to the performance of eligible work; • Adequately documented (2 CFR section 200.403(g)); • Reduced by all applicable credits, such as insurance proceeds and salvage values (Stafford Act section 312, 42 USC section 5155, and 2 CFR section 200.406); • Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations; • Consistent with applicant’s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant; and • Necessary and reasonable to accomplish the work properly and efficiently (2 CFR section 200.403). 1. Applicant (Force Account) Labor FEMA refers to the applicant’s personnel as “force account.” FEMA reimburses force account labor based on actual hourly rates plus the cost of the employee’s actual fringe benefits. FEMA calculates the fringe benefit cost based on a percentage of the hourly pay rate. Because certain items in a benefit package are not dependent on hours worked (e.g., health insurance), the percentage for overtime is usually different than the percentage for straight time. Compliance – General Per 2 CFR Section 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non federal entity. Internal Control Per 2 CFR section 200.303(a), a non federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition and Context The New Jersey Turnpike Authority (the “Authority”), through the State of New Jersey, Department of Homeland Security (the State), administers the federal Disaster Grants – Public Assistance (Presidentially Declared Disasters) program and is reimbursed for eligible expenditures when a presidentially declared disaster occurs. For the Authority’s force account labor costs, the Authority utilizes manual Daily Worksheets (timesheets) as the official records for time and effort worked during an event by the Authority’s personnel. These timesheets are then entered into the Authority’s information system (PeopleSoft) for review and approval, reconciling back to the information entered on the respective timesheet. For thirteen of sixty timesheets selected for testwork, the Authority was unable to provide the timesheets as the official record for the time and effort charged to the federal program. However, the Authority successfully demonstrated through PeopleSoft system that the time and effort charged to the federal program was properly reviewed and approved and reconciled to the amounts of reimbursement requested from the State. The finding is recurring from the prior year as the corrective action plan developed by the Authority from the prior year finding was not implemented until December 2024, which is subsequent to when these expenditures were incurred by the Authority between fiscal years 2020 and 2022. Cause The Authority did not maintain and make readily available certain timesheets used as the official record for the time and effort charged to the federal program in accordance with the Uniform Guidance. Effect The Authority did not comply with 2 CFR Section 200.430 related to incorporating the physical timesheets into the official records of the Authority. Questioned Costs None as the time and effort amounts charged were determined to be allowable. Recommendation We recommend that the Authority strengthen its processes to ensure that all timesheets for disaster related events that are federally funded are maintained and are made readily available if subject to audit or other inspection in accordance with the Uniform Guidance. Views of Responsible Officials Management agrees with the finding. Beginning in December 2024, as a commitment to strengthen our processes and ensure that all physical timesheets related to FEMA-declared disaster events are properly maintained and readily accessible, management put a process in place to enhance procedures and controls for timesheets going forward to ensure full compliance with the Uniform Guidance requirements. This process was successfully implemented as of this date and for prospective periods. However, this process does not remedy the issue noted in the finding which relates to time worked from 2020-2022, which is before the process was in place. Therefore, the finding is repeated from the prior year.
Finding Number 2024-001: Represents a significant deficiency in internal control over compliance. Repeat Finding: No Type of Finding: Significant Deficiency in Internal Control Over Compliance Description: Payroll Expenditures – Approval of Wage Confirmation Sheets Major Program: AL#93.569 - Community Service Block Grant – Award numbers CFS-24-7007 and CFS-25-7007 Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Condition: Out of a sample of fourteen (14) payroll transactions (representing eight (8) individual employees), there were two (2) selections that did not have signed wage confirmation sheets. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. Wage confirmation sheets, which document the employees rate of pay, must be signed indicating approval. Cause: Due to inadequate staffing, the Organization does not have the proper review process in place to ensure that the wage confirmation sheets are reviewed and approved prior to payroll being processed. Effect: Without proper review and approval of the wage confirmation sheets, it is possible that grants could be charged incorrectly, resulting in misstated financial statements. Recommendation: We recommend the Organization implement systems and procedures to ensure all wage confirmation sheets have been reviewed and approved, to ensure grants are charged for the correct amount of payroll expenses. View of Responsible Officials: Management agrees with the finding and has committed to a corrective action plan.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-001. Allowable Costs/Cost Principles United States Department of Health and Human Services, Substance Abuse and Mental Health Services Administration Passed Through Vibrant Emotional Health: Substance Abuse and Mental Health Services Administration - 988 National Suicide Prevention Lifeline ALN: 93.243 Substance Abuse and Mental Health Services Administration - Disaster Distress Helpline ALN: 93.243 Passed Through New York State Office of Mental Health: Substance Abuse and Mental Health Services Administration - 988 S11MY1 ALN: 93.243 Criteria: Uniform Guidance 2 CFR 200.430, covers standards for documentation of compensation-personal services. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and time spent. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Furthermore, these records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities, which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: Time records prepared by employees reflect the total hours worked for the day, but do not reflect the actual time spent on programs funded by a federal award, rather they are based on budgeted hours. Cause: The Organization allocates payroll to programs funded by awards based on the contract supported budget, which is based on an estimate of the time that work will be performed by individuals. At the time of the audit, the true-up of budgeted hours to actual hours worked had not been completed. Effect: Without time records, which are based on time worked to support the proper allocation of payroll, errors could occur and result in the Organization reporting and receiving reimbursement for the incorrect amount of payroll expenses chargeable to an award. Identification of a Repeat Finding: This is a repeat finding from the prior year, 2023-001. Questioned Costs: Dollar amount undetermined, Personnel Activity Report details not available. Recommendation: The Organization’s use of Personnel Activity Report equivalent documentation, should allow each employee to accurately reflect the time work is performed for each federal award. Views of Responsible Officials and Planned Corrective Action Plan: The Organization agrees with the finding as indicated in the Organization’s corrective action plan, and has modified procedures to reflect actual time worked by employees on PAR equivalent documentation. The Organization’s new payroll and time keeping system should capture information, which will support personnel expenses funded by each federal award.
2024-002 Compensation for Personal Services Coronavirus State & Local Fiscal Recovery Funds – Assistance Listing No. 21.027 – COVID-19 Funding Award Number: 24-IHFA 186302 – Award Period: October 1, 2023 through September 30, 2024 Award Number: Aurora ARPA – Award Period: April 1, 2024 through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: Hours spent working on different funding sources/cost objectives from payroll timesheets did not agree to hours entered into the payroll allocation spreadsheets for five pay periods for sampled employees #1 and #2. Additionally, total hours worked and logged on timesheets did not agree to hours paid for two pay periods for sampled employees #1 and #3. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(1), Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated Questioned Costs: Not determinable. Cause: The Organization’s established internal controls over salary and wage cost allocation did not operate as intended. Effect: Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency (and/or pass-through entity). Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Gateway Domestic Violence Services acknowledges there were errors made but can attest that the charges to funders were correct. See separately issued corrective action plan.
2024-002 Compensation for Personal Services Coronavirus State & Local Fiscal Recovery Funds – Assistance Listing No. 21.027 – COVID-19 Funding Award Number: 24-IHFA 186302 – Award Period: October 1, 2023 through September 30, 2024 Award Number: Aurora ARPA – Award Period: April 1, 2024 through December 31, 2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Condition: Hours spent working on different funding sources/cost objectives from payroll timesheets did not agree to hours entered into the payroll allocation spreadsheets for five pay periods for sampled employees #1 and #2. Additionally, total hours worked and logged on timesheets did not agree to hours paid for two pay periods for sampled employees #1 and #3. These errors were not detected and corrected after-the-fact. Criteria: According to 2 CFR 200.303(a), non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Per 2 CFR 200.430(i)(1), Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated Questioned Costs: Not determinable. Cause: The Organization’s established internal controls over salary and wage cost allocation did not operate as intended. Effect: Allowable costs could potentially be overpaid or underpaid or disallowed and required to be paid back to the Federal awarding agency (and/or pass-through entity). Recommendation: The Organization should strengthen their policies and procedures to support a system of internal control able to prevent and/or detect and correct errors timely ensuring costs are accurate, allowable, and properly allocated. Views of Responsible Officials and Planned Corrective Actions: Gateway Domestic Violence Services acknowledges there were errors made but can attest that the charges to funders were correct. See separately issued corrective action plan.
Finding # 2024-001 Type: Material weakness Type: Material noncompliance Assistance Listing Number: Department of Health and Human Services 93.658 Requirement: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records must meet the standards as specified in 2 CFR 200 Subpart E Cost Principles §200.430. Condition: Payroll allocations were done based on management’s estimate through departmental meetings and work assignments rather than actual time records maintained by staff. Context: Payroll allocation during the months of January through April 2024 were based on estimates. Total payroll charged during this time was approximately $218,000 of the $815,000 total federal expenditures for the year. Cause: Management became aware of the need for a time tracking system after the activities funded by the Federal awards began. Effect: Payroll costs charged to the grant may not be accurate. Questioned Costs: Approximately $218,000 Recommendation: We recommend that management continue to reinforce utilization of the time tracking system that was implemented in 2024. In addition, management should ensure that the timecards submitted by staff are reviewed and approved timely. Management’s Response: Management agrees and as noted, a new time tracking system was implemented in May 2024 and no exceptions were identified after implementation.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Significant Deficiency in Internal Control Over Compliance and Noncompliance – Inadequate Payroll Review and Documentation B. Allowable Costs/Cost Principles Criteria: Per 2 CFR § 200.430(g), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. As part of ELI’s internal controls, time and effort documentation, such as employee salary and wage allocations, should be reviewed and approved by ELI to confirm accuracy and consistency with policies or approvals. Condition and Context: We haphazardly selected three months of payroll allocations which included 23 individuals. Our sample was not statistically valid. During our testing of payroll expenses charged to the federal program, we noted controls in place were not sufficient to ensure the amounts charged to the award were properly reviewed and approved to ensure amounts charged agreed to those approved to be charged. This resulted in three errors identified in our testing: January payroll allocations were based on the approved budget, but the amounts charged differed from the budgeted amounts resulting in known questioned costs of $1,014. This impacted 18 of the 23 individuals selected for testing. Two individuals charged to the award had time which was not approved to be charged to the award resulting in known questioned costs of $8,395 and likely questioned costs of $31,717. Likely questioned costs were calculated by quantifying the total amount of payroll for these individuals which were charged to the federal award. Paid time off and holiday pay were not allocated to the awards at the approved allocation rate throughout 2024. This resulted in the cost being under-allocated by $1,924 which did not result in any known question costs. Cause and Effect: Management was working to establish improved controls for reviewing and approving payroll expenses charged to federal awards. This ultimately resulted in establishing a monthly review of all payroll charges to federal awards starting in July 2024. However, management did not include any detective controls to review that approved payroll allocations were being implemented as intended. This resulted in the errors noted above. Recommendation: We recommend that management establish detective controls to ensure payroll expenses are being charged consistently with established policies and approved allocations. Views of Responsible Officials and Planned Corrective Action: We agree with the recommendation and portions of the plan were implemented in February 2024, while the remainder was implemented in July 2025. In January 2024, the ELI team reviewed team members and their respective salary allocations, specifically for the Early Head Start program. Allocations were documented and updated in Axiom, ELI’s payroll system of record. Those allocations were then updated in early February 2024 and regular meetings to review, document and update allocations as needed, have since been held on a consistent basis. The secondary piece, corrected in July 2025, was a system correction for allocation of PTO and Holiday pay, those were not being allocated to EHS consistent with the agreed upon allocations and not going to EHS as they should have been. This has been corrected in Axiom and the ELI accounting team will now perform regular reviews to confirm allocation in agreement with the agreed upon amounts. In addition, correcting entries for 2024 and 2025 will be made by August 31, 2025.
Finding 2024-002 Insufficient Documentation of Personnel Expenses Type of Finding: Noncompliance and Material Weakness in Internal Control over Compliance Condition: The Organization charges a material amount of payroll-related costs to its major federal program. However, it does not maintain sufficient documentation to support the level of effort charged to the award, as required by federal regulations. While staff members are required to complete timesheets, the current format does not capture the level of detail needed to substantiate payroll allocations to federal programs. Additionally, there is no formal process for supervisory review and approval of these timesheets. Although no overcharges or double-dipping were identified, the lack of adequate documentation results in known and likely questioned costs due to noncompliance with documentation requirements. Criteria: According to Uniform Guidance 2 CFR §200.430(g), the Organization's charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The records also must reasonably reflect the total activity for which the employee is compensated. The records also must support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Cause: This issue appears to stem from two primary causes: (1) the timesheet system in use was not designed to capture the information needed to support federal payroll charges, and (2) there is a lack of formal internal controls around timekeeping, including supervisory review and approval of reported time. Possible of Known Effect: As a result, a material amount of salary and payroll taxes charged to the federal program is not adequately supported in accordance with 2 CFR 200.430. This leads to both known and likely questioned costs. The absence of proper documentation increases the risk of misallocated expenses and undermines the Organization’s ability to demonstrate compliance with federal cost principles. Questioned Costs: Known questioned costs of $36,262 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization revise its timekeeping system to ensure that staff members record time in a manner that clearly supports the allocation of payroll costs to federal programs. Timesheets should include sufficient detail and be reviewed and approved by supervisors, with documentation of this review retained for audit purposes. For senior leadership, including the CEO, the Organization should implement appropriate methods such as time studies or activity logs to document effort charged to federal awards. Additionally, we recommend the development and documentation of internal controls to oversee the time reporting process and ensure compliance with federal requirements. Views of Responsible Officials: The Organization will develop and implement a standardized timesheet template (Gusto) that captures employee name, pay period, hours worked by funding source, and supervisory approval. Provide mandatory training for all staff whose salaries are charged in whole or in part to grants on documentation and time allocation requirements. Require monthly reconciliation of time sheets to payroll records before submission to grants. The Organization will conduct quarterly internal reviews to ensure compliance and adjust as needed.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2 CFR § 300 codified in 45 CFR part 75 and gives regulatory effect to the Department of Health and Human Services 2 CFR § 200; while 2 CFR § 400 gives regulatory effect to the Department of Agriculture for 2 CFR § 200. 2 CFR § 200.302(b)(6) states the financial management system of each non-Federal entity must provide for written procedures to implement the requirements of 2 CFR § 200.305 for Payment. 2 CFR 200.302(b)(7) requires written procedures for determining the allowability of costs in accordance with Subpart E-Cost Principles of this part and the terms and conditions of the Federal award. 2 CFR 200.430 states that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. 2 CFR 200.431 requires established written leave policies if the entity intends to pay fringe benefits. 2 CFR 200.464(a)(2) requires reimbursement of relocation costs to employees be in accordance with an established written policy must be consistently followed by the employer. 2 CFR 200.475 requires reimbursement and/or charges to be consistent with those normally allowed in like circumstances in the non-Federal entity's non-federally-funded activities and in accordance with non-Federal entity's written travel reimbursement policies. Additionally, for Federal awards, the Uniform Guidance requires a written policy for the procurement requirements outlined in 2 CFR § 200.318(c)(1), 2 CFR § 200.318(c)(2), and 2 CFR § 200.320(B). The Board of Health did not have written policies as required by the Uniform Guidance as they were not aware of the requirements. The failure to implement written policies as required by the Uniform Guidance could result in noncompliance with the District’s federal programs. The Board of Health should adopt written policies in accordance with the Uniform Guidance to help improve internal controls over federal compliance.
2024-003 Time and Effort Documentation (Internal Control) Federal Program: Housing Voucher Cluster; CFDA #14.871 Federal Agency: U.S. Department of Housing and Urban Development Award Period: 2024 Finding resolution status Unresolved Information on universe and population size The universe and population consisted of 26 payroll periods. Sample size information A non‑statistical sample of 3 payroll periods were selected for testing. Identification as a repeat finding This is a repeat finding. Criteria 2 CFR §200.430(i) requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and that are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. HUD guidance reiterates the requirement for after the fact time and activity documentation to support payroll allocations to grants. Statement of condition Payroll allocations for four employees were established prospectively at the beginning of the year and were not adjusted to reflect actual time and effort during the year. These employees do not complete detailed timesheets; therefore, there is no after‑the‑fact documentation to support the accuracy of payroll costs charged to Federal programs. Cause Management believed that, because the employees work consistent hours on the same programs each week and supervisory knowledge of attendance exists, maintaining detailed time and effort records was unnecessary. Effect Without contemporaneous, after the fact documentation of actual time spent on each Federal program, the organization cannot demonstrate that salary costs are accurately allocated, increasing the risk of unallowable costs being charged to the grants. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and has performed a time-study to support program allocations. The allocations have been implemented in 2025. Context The exception was isolated to four administrative employees. The maintenance employee maintained acceptable property specific timesheets and was not included in the exception population. Recommendation We recommend that the organization establish an after the fact time and activity reporting system that meets Uniform Guidance requirements and adjust payroll allocations at least quarterly to reflect actual effort expended. Information on universe and population size The universe and population consisted of 26 payroll periods. Sample size information A non‑statistical sample of 3 payroll periods were selected for testing. Identification as a repeat finding This is a repeat finding. Criteria 2 CFR §200.430(i) requires charges to Federal awards for salaries and wages to be based on records that accurately reflect the work performed and that are supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. HUD guidance reiterates the requirement for after the fact time and activity documentation to support payroll allocations to grants. Statement of condition Payroll allocations for four employees were established prospectively at the beginning of the year and were not adjusted to reflect actual time and effort during the year. These employees do not complete detailed timesheets; therefore, there is no after‑the‑fact documentation to support the accuracy of payroll costs charged to Federal programs. Cause Management believed that, because the employees work consistent hours on the same programs each week and supervisory knowledge of attendance exists, maintaining detailed time and effort records was unnecessary. Effect Without contemporaneous, after the fact documentation of actual time spent on each Federal program, the organization cannot demonstrate that salary costs are accurately allocated, increasing the risk of unallowable costs being charged to the grants. Auditor non-compliance code S – Internal Control Deficiencies Questioned costs None Views of responsible officials Management concurs with the finding and has performed a time-study to support program allocations. The allocations have been implemented in 2025. Context The exception was isolated to four administrative employees. The maintenance employee maintained acceptable property specific timesheets and was not included in the exception population. Recommendation We recommend that the organization establish an after the fact time and activity reporting system that meets Uniform Guidance requirements and adjust payroll allocations at least quarterly to reflect actual effort expended.
Federal agency: U.S. Department of Agriculture, Natural Resources Conservation Service Federal program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification No.: NR243A750004G023 Award Period: 12/9/2023 – 12/31/2028 Compliance Requirement: Activities Allowed or Unallowed, Allowable Cost/Cost Principles Type of Finding: • Significant Deficiency in Internal Control over Compliance • Compliance Finding 2024-001: Partnerships for Climate-Smart Commodities- Allowable Cost/Cost Principles Criteria: 2 CFR Section 200.430 (8)(i) Standards for Documentation of Personnel Expenses states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Additionally, per 2 CFR section 200.303(a), a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our review of the payroll allocation for August 2024, we noted that one employee’s payroll costs were incorrectly charged to the grant, resulting in an overstatement of grant expenditures for that period.Context: The total federal expenditures under the Partnerships for Climate-Smart Commodities program were approximately $3,074,267 for the year ended December 31, 2024. The payroll charges tested during our procedures were approximately $95,770, which represented approximately 3% of total expenditures charged to the grant during the year. The misallocation noted was isolated to a single employee’s payroll costs for one month and did not represent a systemic issue across all payroll transactions. Cause: The misallocation occurred due to insufficient review of payroll allocations. Existing internal controls did not include a detailed verification process to ensure that employee time charges were accurately aligned with actual grant-related activities. Effect: As a result, grant expenditures were overstated for the period. If not corrected, this misallocation could impact the accuracy of financial reporting and result in potential noncompliance with grant cost allowability requirements. Identification as a Repeat Finding, if Applicable: No. Questioned Costs: None identified. Recommendation: We recommend that management strengthen internal controls over payroll allocation by implementing a documented review and approval process to verify the accuracy and allowability of personnel expenses charged to Federal awards. This process should ensure compliance with 2 CFR §200.430 and be incorporated into official records, consistent with the entity’s established accounting policies. Responsible Official: President Views of Responsible Official and Planned Corrective Action: Management concurs with the audit finding. See the accompanying management’s corrective action plan for planned corrective action.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
Assistance Listing Numbers 93.658 Foster Care Title IV-E 93.667 Social Services Block Grant Federal Agency U.S. Department of Health and Human Services Pass-Through Agency Wisconsin Department of Children and Families Award Numbers / Years Various Criteria: Per 2 CFR §200.430 - Compensation—personal services, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, are properly supported, and are consistent with the entity’s accounting records. Additionally, 2 CFR §200.303 - Internal Controls requires non-Federal entities to establish and maintain effective internal controls that provide reasonable assurance of compliance with Federal statutes, regulations, and terms and conditions of Federal awards. Condition/Context: As part of our testing procedures over payroll, we reconciled amounts recorded on the Payroll Ledger to the General Ledger for each payroll sample that we tested. From a sample of 40, we noted two instances where the amounts recorded in the General Ledger did not agree with the corresponding amounts recorded in the Payroll Ledger. Our sample was not statistically valid. Effect: Inaccurate or unsupported recording of payroll costs increases the risk that unallowable or misstated payroll expenses may be charged to Federal awards. If not corrected, this could result in inaccurate financial reporting and potential questioned costs. Questioned Costs: None noted. Cause: Payroll Ledger records are generated from programmatic reports based on timesheet entries in the county’s Dayforce system. While manual adjustments or allocations of programmatic reports to the Payroll Ledger are sometimes made before these records are ultimately posted to the General Ledger, no formal reconciliations are performed to account for these changes. As a result, discrepancies between the programmatic reports and the General Ledger are likely whenever there are adjustments or allocations in the programmatic reports which are not posted on the General Ledger. Recommendation: We recommend that management strengthen internal controls over payroll reconciliations by: • Implementing a system review process to ensure Payroll Ledger amounts reconcile to the General Ledger. • Conducting periodic reconciliations between the programmatic reports, Payroll Ledger and General Ledger and promptly investigating any discrepancies. • Providing training to accounting personnel on proper reconciliation procedures. Views of Responsible Officials: Dayforce is configured to allocate salary expenses to an employee’s home agency and department, regardless of where the employee assigns their hours in the timekeeping system. While the timesheet programmatic reflects the agency and department where hours and dollars are functionally charged, the payroll register aligns with the General Ledger based on home agency coding. As a result, the Payroll Register and General Ledger will reconcile with each other but may not align with programmatic reports, which are based on timesheet-level allocations. This system behavior is consistent with current configuration and financial reporting practices.
Finding No. UG-2024-001 – Lack of Timesheets for Employees Federal Agencies, Programs, and Assistance Listing Numbers: • U.S. Department of Agriculture: Agricultural Marketing Service: • Regional Food Business Centers (Assistance Listing No. 10.186) Criteria – Per Title 2 CFR 200.430(i), charges to federal awards for labor costs must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Be incorporated into the official records of the non-Federal entity. • Reasonably reflect the total activity for which the employee is compensated. • Support the distribution of employees’ labor costs among specific activities or cost objectives. • Include budget estimates only as interim accounting devices, provided that actual work performed is subsequently verified. Condition – The Organization does not maintain timesheets or other records to document hours worked or labor cost allocations. Labor charges are recorded monthly based on budgeted amounts. Cause – The Organization has not implemented a timekeeping system or alternative time documentation for its employees. Payroll costs are charged based on budgeted amounts, which are not subsequently adjusted to reflect actual activities performed. Effect – The Organization cannot substantiate labor costs or demonstrate accurate allocation of labor costs charged to the program. Questioned Costs – Unknown. Recommendation – We recommend that the Organization implement a system for tracking time and effort that meets the requirements of Title 2 CFR 200.430. This system should include: • Detailed timesheets or activity reports for employees whose labor costs are charged to federal awards. • Supervisory review and approval of time records. • Procedures for reconciling budgeted labor charges to actual time worked. Views of Responsible Official(s) and Planned Corrective Action – See Corrective Action Plan on page 36.
Block Grants for Substance Use Prevention, Treatment, and Recovery Services 93.959 Criteria: 2 CFR Section 200.430 states that Recovery Café of Clark County’s must have a formal approval process for employee pay increases or pay changes. Condition: The Organization does not have a formal approval process for employee pay rate changes. Cause: The Organization does not have a proper internal control structure in place to complete its approval process of pay increases and pay rate changes. Effect: No formal approval process of pay increases can create noncompliance with allowable personnel costs related to federal programs.Questioned Costs: None. Recommendation: Management should develop a formal approval process for all pay increases or pay changes to ensure that the financial information is recorded appropriately in accordance with generally accepted accounting principles, is properly reconciled and recorded at year-end in a timely manner, and audits are completed in a timely manner in accordance with 2 CFR Section 200.512. Views of Responsible Officials: Management will work to develop the proper procedures to ensure proper approvals and that balances are appropriately reconciled at year-end and recorded in accordance with generally accepted accounting principles, so the reporting requirements in 2 CFR Section 200.430 are met.
Criteria: Under 2 CFR 200.430(g), 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] reflect the total activity for which the employee is compensated, [3] encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, and [4] be incorporated into the official records of the entity. Condition: During testing of payroll and compensation expenses charged to the federal award for the period January 1, 2024 through March 31, 2024, we identified two employees who charged a portion of their time to the federal program but did not maintain timesheets or other documentation reflecting total hours worked. Timesheets maintained only showed hours worked on the federal program. As a result, we were unable to recalculate or verify the accuracy of the amounts charged to the award for these individuals during this period. Cause: The Organization had not yet implemented formal time and effort documentation procedures for employees working part-time on federal programs during the first quarter of 2024. Policies and internal controls requiring complete timesheet documentation were developed and implemented beginning in April 2024. Effect: Due to the lack of contemporaneous time and effort documentation, there is an increased risk that personnel costs charged to the federal award during the affected period may not accurately reflect the time actually devoted to the program. This may result in noncompliance with federal requirements and unallowable costs being charged to the award. Questioned Cost: We identified $14,071 in payroll charges made between January 1 and March 31, 2024 by two employees who were not working 100% on the federal program and for whom incomplete time and effort documentation was maintained. Specifically, the timesheets only reflected hours worked on the federal program and did not include total hours worked across all activities. As a result, we were unable to verify the accuracy of the charges allocated to the federal award. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization continue to enforce the policies implemented in April 2024 requiring all employees who work less than full-time on federal programs to maintain detailed timesheets or equivalent documentation. These records should be reviewed and approved in accordance with the organization's internal control procedures and retained to support all payroll charges to federal awards. Views of Responsible Officials and Planned Corrective Action (unaudited): See Corrective Action Plan.
Federal Agencies: Department of Housing and Urban Development and Department of Health and Human Services Federal Assistance Listing Numbers: 14.231, 14.267, 93.224 & 93.527 Program: Emergency Solutions Grant Program, Continuum of Care Program, Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: HH-21-03.4, CA0802L9D012214, CA0802L9D012315, CA1348L9D012208, CA1348L9D012309, CA1510L9D012207, CA1510L9D012308, CA1883L9D012203, CA1883L9D012304, HHI-24-09, SIHI-25-07, HHI-24-04, SIHI-25-18, H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in Subpart E 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Further, matching funds must also be allowable under Subpart E – Cost Principles. Per 2 CFR §200.430 Compensation – Personal Services: “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control, which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities; (iv) Encompass federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the recipient or subrecipient; and (vi) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (vii) 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: (A) The system for establishing the estimates produces reasonable approximations of the activity performed; (B) Significant changes in the related work activity (as defined by the recipient’s or subrecipient’s written policies) are promptly identified and entered into the records. Short-term (such as one or two months) fluctuations between workload categories do not need to be considered as long as the distribution of salaries and wages is reasonable over the longer term; and (C) The recipient’s or subrecipient’s system of internal controls includes processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: We noted that the Village allocated payroll expenditures to Emergency Solutions Grants Program, Continuum of Care Program, and Health Center Cluster during 2024 that lacked adequate or timely documentation. During our testing we noted instances where supervisor did not approve timesheets, instances where the incorrect allocation rate was utilized, and instances where attestations were not completed timely to support employee’s time allocated to the grant for reimbursement. • For Emergency Solutions Grants Program: o 41 out of 60 selections did not have timely completion of attestations • For Continuum of Care Program: o 2 out of 100 selections utilized the incorrect allocation rate to the grant. • For Continuum of Care Program in our testing of Matching Costs: o 2 out of 60 selections did not have approved timesheets. o 2 out of 60 selections did not have timely completion of attestations. o 1 out of 60 selections utilized the incorrect allocation rate. • For Health Center Program Cluster: o 1 out of 60 selections utilized the incorrect allocation rate to the grant. o 14 out of 60 selections did not have timely completion of attestations. Cause: The Village did not have adequate policies/procedures in place to timely prepare and complete timesheet attestations and approvals and reconcile to actual expenditures charged. Additionally, the Village relied heavily on manual processes that are more prone to error and did not have an adequate review process to identify and correct calculation errors. Effect or Potential Effect: Without adequate controls in place to detect calculation errors and ensure attestations and timesheets were reviewed in a timely manner, the Village could incorrectly charge expenditures to the Federal program, or not request appropriate reimbursement the Village is entitled to under the terms of the grant. Questioned Costs: Emergency Solutions Grants Program: None Continuum of Care Program Known Questioned Costs: $1,575 Continuum of Care Program Likely Questioned Costs: $172,053 Health Center Program Cluster: None above the $25,000 reporting threshold. Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Emergency Solutions Grants Program in 2024 were $377,797. Payroll costs including fringe benefits for the Continuum of Care Program in 2024 were $1,217,865. Matching costs for the Continuum of Care Program in 2024 were $1,896,728. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Any costs not adequately supported by approved timesheet allocations or in excess of supported allocations are considered questioned costs. Repeat Finding: 2023-003, 2023-004, 2023-005 Recommendation: We recommend that the Village implement policies and procedures to ensure attestations are completed timely (i.e. quarterly) and to ensure timely review for any necessary budget to actual adjustments. Additionally, we recommend implementing system improvements to reduce manual entry and establishing policies to review reimbursement calculations before submission. Views of Responsible Officials: