Federal Award Finding 2024-001 US Department of Justice Crime Victims Assistance AL No. 16.575 Pass-Through Grantor New Hampshire Coalition Against Domestic and Sexual Violence Questioned costs – $0 Criteria – 2 CFR section 200.430 requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records should be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition – Our testing included sampling 40 timesheets and verifying that the time booked to the grants was properly supported by the approved time sheets. In 5 instances the actual amount charged to the grants deviated from the amount deemed chargeable to the grant per the time sheet. The actual time allocated to the grants was concluded as allowable thus there are no questioned costs. The sample was not intended to be, and was not, a statistically valid sample. Cause – The cause of the discrepancies is due to reallocating time after the timesheets are completed or the use of an incorrect timesheet. Effects or Potential Effects – The effect or potential effect is the lack of proper documentation to support that HAVEN has established a system of internal control that evidences that time charged to the grant was appropriately reviewed for accuracy and allowability. Auditor’s Recommendation – We recommend that time sheets comprehensively detail the employee’s program-related activities, which should then be accurately reflected in the grant allocations. If circumstances require re-allocation of an employee’s time the changes and the reason for the changes should be documented sufficiently to demonstrate the change was properly supported, reviewed and allowable. View of Responsible Officials – HAVEN agrees with the finding and the Office Manager will review all time sheets and document any required changes to support the payroll charged to the grants.
FINDING #2024-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • 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. Condition: Auditors selected a representative sample of 21 employees with salaries and benefits charged to the federal program noted above during the 2023-2024 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Effect: The District is not in compliance with 2 CFR §200.430. Cause: Administrative oversight. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 85.
FINDING #2024-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • 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. Condition: Auditors selected a representative sample of 21 employees with salaries and benefits charged to the federal program noted above during the 2023-2024 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Effect: The District is not in compliance with 2 CFR §200.430. Cause: Administrative oversight. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 85.
FINDING #2024-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • 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. Condition: Auditors selected a representative sample of 21 employees with salaries and benefits charged to the federal program noted above during the 2023-2024 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Effect: The District is not in compliance with 2 CFR §200.430. Cause: Administrative oversight. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 85.
FINDING #2024-002: FEDERAL COMPLIANCE – TIME AND EFFORT REPORTING (50000) AL Number and Title: 84.027 – IDEA Basic Local Assistance Entitlement, Part B, Sec. 611 Federal Grantor Name: U.S. Department of Education; Passed through California Department of Education Criteria: Federal regulation 2 CFR §200.430 states that “charges to federal awards for salaries and wages must comply with the established accounting policies and practices of the non-federal entity and budget estimates determined before the services are performed alone do not qualify as support for charges to federal awards.” Standards for documentation of personnel expenses charged to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; • Be incorporated into the official records of the non‐Federal entity. • Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities. • Encompass both federally assisted and all other activities compensated by the non‐Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity’s written policy; • Comply with the established accounting policies and practices of the non‐Federal entity. • Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. • 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. Condition: Auditors selected a representative sample of 21 employees with salaries and benefits charged to the federal program noted above during the 2023-2024 fiscal year. Based on our audit procedures, we were unable to confirm that timely review and approval of employees charged to federal programs had been properly documented. As a result, we could not confirm that the criteria for personnel expenses charged to federal awards had been met. Effect: The District is not in compliance with 2 CFR §200.430. Cause: Administrative oversight. Questioned Cost: None. Although the District was not in compliance, we did not note any questionable or potentially unallowable costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the District implement control procedures that meet the requirements outlined above and properly document the timely review and approval of employees charged to federal programs. This can be accomplished through the timely preparation of semi-annual certifications for single-funded employees and monthly certifications for multi-funded employees. Corrective Action Plan: The Views of Responsible Officials and Corrective Action Plan are included on page 85.
2024-002 Internal Control over Compliance with Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Payroll Activities Identification of the Federal Program: Federal Agency: United States Housing & Urban Development Program Name: Community Development Block Grant - Disaster Recovery Whole Community Resilience Planning Program Assistance Listing Number: 14.228 Award Number: B-17-DM-72-0001 Passthrough Entity: Government of Puerto Rico Department of Housing Pass-Through Entity Identifying Number: FFNMUBT6WCM1 Sub-award Period: 1/30/2023-9/30/2024 Criteria - The Code of Federal Regulations 2 CFR 200.303, Internal Control, requires the non-federal entity to establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-federal entity is managing Federal awards in compliance with Federal statutes, regulations, and other terms and conditions. Per 2 CFR Section 200.430 Compensation – Personal Services: “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 establish 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 Section 200.430(i): “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity; (vi) [Reserved] (vii) Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” Condition – During the audit, we noted that the Trust has a system of internal control in whichemployees who charge time to the Federal programs, are required to complete a timeslip and have their Timeslips reports reviewed and approved by the employees’ supervisors on a monthly basis. During our testing, we noted that five out of seven employees selected for testing charged time to the Federal program between July 1, 2023 and April 30, 2024, but the timeslips reports were not reviewed and approved by their supervisors until June 2024. There was a lack of timely approval of hours charged to the federal program by the supervisors. However, we validated that the employees who charged time to the federal awards as part of our sample selection were included in the budgets for the federal programs. Cause – The Trust did not follow its documented policies and procedures in place to ensure compliance with the requirements regarding activities allowed or unallowed and allowable costs/cost principles – payroll activities. Effect or Potential Effect - Without timely approvals that the personnel costs charged are accurate, the Trust is not able to demonstrate that key elements in a system of internal control over the recording of time exists. Questioned Costs - None. Context - This is a condition identified based upon our review of the Trust’s compliance with specified requirements. The sample was selected based on a non-statistical basis. The prevalence of these findings is detailed in the condition section above. Repeat finding - This is not a repeat finding. Recommendation - We recommend that the Trust strengthen its current policies and procedures to ensure that payroll costs charged to federal awards are supported by a system of internal controls that allows for timely employee preparation, certification, and supervisory approval of time charged to the federal awards. Views of Responsible Officials – Time charged to this program had to be captured both as part of the billing process to the Federal funder, United States Housing and Urban Development (HUD) and through Timeslips system as required by internal policy. Time entries were downloaded from the Timeslips system and formatted for approvals using a time certification form template as required and approved by HUD. Billing to HUD occurs monthly. However, there were significant delays by HUD in reviewing and approving monthly invoices along with frequent changes to the requested documentation needed to substantiate costs. Although internal Timeslips reports were available for review and approval on a monthly basis, the program manager’s approvals were only documented on the time certification form as required by HUD. As a result, evidence of timely approvals on a monthly basis were not available as internal policy states. Procedures will be enforced to ensure that program managers are documenting approvals for hours charged to all federal awards according to both federal and internal policies as required on a monthly basis.
Findings and Questioned Costs – Major Federal Award Programs Audit Federal Agency: U.S. Department of Education Passthrough Entity: Missouri Department of Elementary and Secondary Education Assistance Listing Number and Federal Program: 84.010 Title I Grants to Local Educational Agencies Compliance Requirement: B. Allowable Costs Criteria: Per 2 CFR 200.430(g)(1)(i), the District is required to have records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The District uses semi-annual certifications to determine if the salaries and/or employee benefits of its employees are allowable for the grant. These certifications are to be signed after each semi-annual period by the teacher and the Title I program director. These certifications show that the teachers’ time was spent under the Title I program, and their salaries and benefits are allowable for the Title I program. Condition: During the course of our audit, we reviewed semi-annual certifications for all Title I teachers, as required. These certifications are used to verify that the employee spent one hundred percent of their time working in the Title I program. Per requirements, these certifications should be signed at the end of the applicable period as that is when the actual time spent in the program is known. However, during our review, we noted that all the certifications were signed at the beginning of the applicable semi-annual period. Cause: There is a lack of oversight in this area. Supervisors should ensure the teachers complete the semi-annual certifications in a timely manner after the end of each semi-annual period. Also, program directors should be reviewing the signed certifications to ensure all program requirements are followed to avoid any noncompliance issues and consequences. Effect: Semi-annual certifications are listed under the Allowable Costs/Cost Principles compliance requirement. In order to apply expenditures to the Title I Program, the employees need to certify that they are spending all of their time on that program. Without this certification, it is not clear that the amounts reported as Title I expenditures are indeed eligible expenditures. Questioned Costs: No questioned costs noted. Perspective Information: This appears to be a systemic problem since all Title I semi-annual certifications for the fiscal year 2024 were reviewed and all certifications were filled out at the beginning of each semi-annual period instead of subsequent to the period. Identification of Repeat Findings: Not a repeat finding. Recommendation: We recommend that the District employ stronger oversight in this area by assigning a review to the Title Program Director or equivalent. Once the certifications are signed by a supervisor, they should be forwarded to this point person for their review and signature. The certifications should be reviewed to ensure each Title teacher is completing a semi-annual certification and that it is being signed by the supervisor. These certifications should also have a due date twice a year to ensure they are done timely and are not overlooked. These should be added to the review checklist already used for Title I reporting. Views of Responsible Officials: The District will set up automated reminders through the internal tracking system with specific deadlines to ensure that all certifications are completed and signed no later than 30 business days after the end of the applicable periods. Regular checks will be conducted by the Title 1 Coordinator to verify that all certifications are completed and signed within the required timeframes. All relevant staff members will undergo training on the new procedures, and will be assigned roles and responsibilities for monitoring and submitting the certifications. See Corrective Action Plan.
2024-003 Allowable Costs Federal agency: U.S Department of Education & Department of Health and Human Services Federal program title: Career and Technical Education - Basic Grant to States & Child Care and Development Block Grant Assistant Listing Number: 84.048 & 93.575 Federal Award Identification Number: V048A220030-2024 and 2101ILccc5-2024 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Compliance, Other Matters Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.430(g)(1) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The College did not have proper documentation of Time and Effort reporting. Context: During our testing, we identified that time and effort reports were not documented properly to track hours worked on federal grant and did not have documentation of formal review. Questioned costs: None. Cause: The College did not have proper procedures in place to track time and effort for personnel on federal grants. Effect: The College could potentially expense incorrect amount to federal grants. Repeat Finding: No. Recommendation: We recommend the College review policies and procedures to ensure all personnel on federal grants have documented time and effort reports as stated in federal regulations. Views of responsible officials: Management agrees with the finding.
2024-003 Allowable Costs Federal agency: U.S Department of Education & Department of Health and Human Services Federal program title: Career and Technical Education - Basic Grant to States & Child Care and Development Block Grant Assistant Listing Number: 84.048 & 93.575 Federal Award Identification Number: V048A220030-2024 and 2101ILccc5-2024 Award Period: July 1, 2023 to June 30, 2024 Type of Finding: Compliance, Other Matters Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.430(g)(1) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Per 2 CFR 200.303, nonfederal entities receiving federal awards are required to establish and maintain internal controls designed to reasonably ensure compliance with federal laws, regulations, and program compliance requirements. Condition: The College did not have proper documentation of Time and Effort reporting. Context: During our testing, we identified that time and effort reports were not documented properly to track hours worked on federal grant and did not have documentation of formal review. Questioned costs: None. Cause: The College did not have proper procedures in place to track time and effort for personnel on federal grants. Effect: The College could potentially expense incorrect amount to federal grants. Repeat Finding: No. Recommendation: We recommend the College review policies and procedures to ensure all personnel on federal grants have documented time and effort reports as stated in federal regulations. Views of responsible officials: Management agrees with the finding.
Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Criteria: In accordance with 2 CFR section 200.430, the local education agency is required to maintain time and effort distribution records for employees who work on federal programs. These distribution records must support the portion of time and effort dedicated to: 1) The federal program or cost objective; and 2) Other programs or cost objectives supported by federal funds or other revenue sources. Statement of Condition: The District was not in compliance with the Uniform Guidance as it was noted that management of the District was not preparing time and effort distribution records and could not produce source documentation to support the time and effort applied to payroll expense that was charged to Title I Grants to Local Education Agencies. Cause: The District’s internal controls to identify and document employees that require support for time and effort charged to Title I Grants to Local Education Agencies were not effective for the year ended June 30, 2024. Context: We selected payroll costs associated with nine employees who had wages charged to Title I Grants to Local Education Agencies. Of the nine employees selected for testing, two employees did not have time and effort documentation or other source documentation to support the payroll expense that was charged to the federal program. Effect or Potential Effect: Salary and wage costs could be applied to Title I Grants to Local Education Agencies without appropriate supporting documentation required in accordance with 2 CFR Part 200.430 and District Policy. Questioned Costs: $26,366 of known questioned costs charged to this federal program in the year under audit. Recommendations: We recommend the District review their internal controls to strengthen processes and improve procedures. We recommend the District complete all required time and effort certifications in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding and recommendation and plans to implement a system of completing necessary time and effort documentation for all employees who work on federal programs.
Finding Type: Material Noncompliance; Material Weakness in Internal Control over Compliance Criteria: In accordance with 2 CFR section 200.430, the local education agency is required to maintain time and effort distribution records for employees who work on federal programs. These distribution records must support the portion of time and effort dedicated to: 1) The federal program or cost objective; and 2) Other programs or cost objectives supported by federal funds or other revenue sources. Statement of Condition: The District was not in compliance with the Uniform Guidance as it was noted that management of the District was not preparing time and effort distribution records and could not produce source documentation to support the time and effort applied to payroll expense that was charged to Title I Grants to Local Education Agencies. Cause: The District’s internal controls to identify and document employees that require support for time and effort charged to Title I Grants to Local Education Agencies were not effective for the year ended June 30, 2024. Context: We selected payroll costs associated with nine employees who had wages charged to Title I Grants to Local Education Agencies. Of the nine employees selected for testing, two employees did not have time and effort documentation or other source documentation to support the payroll expense that was charged to the federal program. Effect or Potential Effect: Salary and wage costs could be applied to Title I Grants to Local Education Agencies without appropriate supporting documentation required in accordance with 2 CFR Part 200.430 and District Policy. Questioned Costs: $26,366 of known questioned costs charged to this federal program in the year under audit. Recommendations: We recommend the District review their internal controls to strengthen processes and improve procedures. We recommend the District complete all required time and effort certifications in a timely manner. Views of Responsible Officials and Planned Corrective Actions: The District agrees with the finding and recommendation and plans to implement a system of completing necessary time and effort documentation for all employees who work on federal programs.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Numbers and Year: S010A230020 and S010A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241282-01 231095-01 Award Period: 7/1/2022–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 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. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the 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/Context: For one of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $3,415 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010 Federal Award Identification Numbers and Year: S010A230020 and S010A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241282-01 231095-01 Award Period: 7/1/2022–9/30/2024 7/1/2023–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 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. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the 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/Context: For one of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $3,415 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Education Federal Program Name: Title III English Language Acquisition State Grant Assistance Listing Number: 84.365 Federal Award Identification Number and Year: S365A220020 Pass-Through Agency: Maryland Department of Education (MSDE) Pass-Through Number(s): 241230-02 Award Period: 7/1/2022–9/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 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: (vi) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (vii) Be incorporated into the official records of the non-Federal entity; (viii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (ix) 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; (x) Comply with the established accounting policies and practices of the non-Federal entity; (viii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should comply with the 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/Context: For three of forty timesheets selected for testing, the Board was unable to provide documentation to substantiate that the time and effort was dedicated to the federal program. The Board did not have effective controls in place for monitoring and obtaining adequate support to validate actual payroll expenses charged to the federal program. Questioned costs: $15,233 Cause: Controls were not operating effectively to ensure that time and effort reporting was performed and documented in a timely manner, in accordance with federal requirements. Effect: There is an increased risk of charging unallowed payroll costs to the program. Repeat Finding: No. Recommendation: We recommend that the Board reevaluate its current process, implement proper controls, and perform additional training over time and effort reporting. The Board should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Documentation should be readily available for audit. Views of responsible officials: There is no disagreement with the audit finding.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
Criteria or Specific Requirements The Uniform Guidance states that allowable personnel costs charged to federal programs may include reasonable amounts for activities contributing and directly related to work under an agreement (2 CFR 200.430(i)(1)(i)). Charges to federal awards for salaries and wages must be based on records that accurate reflect the work performed (2 CFR 200.430(g)(1)). Condition Material Weakness in Internal Control over Compliance – Time-and-effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program was not reviewed and approved or not performed for the year ending June 30, 2024. During testing over Activities Allowed or Unallowed and Allowable Cost requirements, the following deficiencies were noted: For the Career and Technical Education program, 14 out of 14 employees selected for testing do not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. For the Title III and V programs, we noted the following – o 25 out of 30 employees selected for testing did not have time-and-effort record reflecting the distribution of the employee’s salary and wages for the federal program. o 5 out of 30 employees selected for testing had time-and-effort records, however, there were no evidence of review and approval. 2 of the 5 employees also had incomplete time-and-effort reports (i.e. only for half of the fiscal year, or a few months). Questioned Costs Career Technical Education – Basic Grants to States known questioned costs: $749,547. Higher Education Institutional Aid programs known questioned costs: $1,431,770. Context The Career Technical Education program reference above had a total of $2,355,332 in expenditures for the year ended June 30, 2024, of which $1,108,453 were associated with salaries and benefits. There was a total population of 66 employees charged to the program in the fiscal year ended June 30, 2024. The Title III and V programs referenced above had a total of $2,865,454 in expenditures for the year ended June 30, 2024, of which $2,248,191 associated with salaries and benefits. There was a total population of 148 employees charged to the program in the fiscal year ended June 30, 2024. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District does not have policies and procedures in place to review personnel charges to identify the employee costs that should and should not be charged to the federal program referenced above. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs charged to federal programs in accordance with the Uniform Guidance. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel costs charged to the federal programs. Views of Responsible Officials and Corrective Action Plan The District and campus staff will work together to develop processes to capture proper and relevant time and effort activities. This will ensure documentation can be provided regarding personnel expenses to identify employee costs charged to federal programs.
2024–003 ALLOWABILITY‐PAYROLL Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.430(g)(1) states, “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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally‐assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); 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. 2 CFR 200.403 indicates that costs must “be consistent with policies and procedures that apply uniformly to both federally‐financed and other activities of the non‐Federal entity” and must “be adequately documented”. Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of pay charged to the federal program was not consistent with actual pay rates. Documentation supporting the difference in rate paid and rate reimbursed from the federal program was not available. Questioned Costs: $69 Context: Total federal expenditures for the Community Development Block Grant program were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll transactions tested of $24,915 for the program. Total payroll charged to the grant was $292,826. Cause: The City does not have adequate internal controls and policies and procedures in place to ensure that the payroll amounts reimbursed from the federal funds correspond to the payroll rates in the underlying payroll accounting records. Effect: The City is not be in compliance with federal statues, regulations, and terms of the conditions of the federal award. Expenditures were paid that are not allowable. The Authority may not identify noncompliance with federal statues, regulations, and terms of the conditions of the federal award including allowability. Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
2024–003 ALLOWABILITY‐PAYROLL Federal Program Information: Federal Agency and Program Name Assistance Listing # U.S. Department of Housing and Urban Development Community Development Block Grants/Entitlement Grants 14.218 Criteria: 2 CFR 200.303 requires that a non‐federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 2 CFR 200.430(g)(1) states, “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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally‐assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); 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. 2 CFR 200.403 indicates that costs must “be consistent with policies and procedures that apply uniformly to both federally‐financed and other activities of the non‐Federal entity” and must “be adequately documented”. Condition: For 6 of the 17 payroll transactions selected for testing the individual’s hourly rate of pay charged to the federal program was not consistent with actual pay rates. Documentation supporting the difference in rate paid and rate reimbursed from the federal program was not available. Questioned Costs: $69 Context: Total federal expenditures for the Community Development Block Grant program were $3,436,560. The 6 payroll transactions represent $8,906 of the total payroll transactions tested of $24,915 for the program. Total payroll charged to the grant was $292,826. Cause: The City does not have adequate internal controls and policies and procedures in place to ensure that the payroll amounts reimbursed from the federal funds correspond to the payroll rates in the underlying payroll accounting records. Effect: The City is not be in compliance with federal statues, regulations, and terms of the conditions of the federal award. Expenditures were paid that are not allowable. The Authority may not identify noncompliance with federal statues, regulations, and terms of the conditions of the federal award including allowability. Recommendation: We recommend that City enhance internal controls to ensure that expenditures charged to the federal awards are properly reviewed and supported. Views of Responsible Officials: Management acknowledges the finding. See corrective action plan.
Finding 2024-011 – B. Allowable Costs/Cost Principles Information on Federal Program(s) – Research and Development Cluster (ALN 43.009, ALN 93.859) Criteria or Specific Requirement - 2 CFR §200.430(i)(1)(i) indicates 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. Additionally, 2 CFR §200 requires that costs charged to programs are adequately documented. Condition – The summary level hourly documentation retained for payroll expenditures charged to the program was not formally supported with an adequate system of internal controls. Additionally, for certain non-payroll expenditures selected for testing, the University was unable to provide documentation adequately supporting the amount charged to the federal award. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – Noncompliance with documentation of personnel expense standards. Questioned Costs – Below reportable threshold. Context – Context is as follows: Expenditures: For 7 of 8 employees tested, the summary level hourly documentation retained was not formally supported with an adequate system of internal controls. Indication of Repeat Finding - This is a repeat of prior year Finding 2023-013. Recommendation – We recommend that the University enhance its internal controls over compliance to ensure that time and effort records are appropriately maintained. Views of Responsible Officials – The University acknowledges that the records to substantiate the payroll costs were insufficient and lacking internal controls. Going forward the University plans to implement a strategic process to document time and effort associated with research and development cluster and it’s federal grants. All employees that work with the Challenger Learning Center will continue to have their hours worked documented in the Paycom payroll software. Payroll is processed on a biweekly basis, and therefore on biweekly basis the payroll costs from the Challenger Learning Center will be reimbursed to the University from the various Challenger Learning Center bank accounts. This will be done as a percentage of time worked for the NIH Grant, the NASA Grant, and the general Challenger Learning Center functions.
Finding 2024-011 – B. Allowable Costs/Cost Principles Information on Federal Program(s) – Research and Development Cluster (ALN 43.009, ALN 93.859) Criteria or Specific Requirement - 2 CFR §200.430(i)(1)(i) indicates 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. Additionally, 2 CFR §200 requires that costs charged to programs are adequately documented. Condition – The summary level hourly documentation retained for payroll expenditures charged to the program was not formally supported with an adequate system of internal controls. Additionally, for certain non-payroll expenditures selected for testing, the University was unable to provide documentation adequately supporting the amount charged to the federal award. Cause - Administrative oversight and insufficient internal controls. Effect or Potential Effect – Noncompliance with documentation of personnel expense standards. Questioned Costs – Below reportable threshold. Context – Context is as follows: Expenditures: For 7 of 8 employees tested, the summary level hourly documentation retained was not formally supported with an adequate system of internal controls. Indication of Repeat Finding - This is a repeat of prior year Finding 2023-013. Recommendation – We recommend that the University enhance its internal controls over compliance to ensure that time and effort records are appropriately maintained. Views of Responsible Officials – The University acknowledges that the records to substantiate the payroll costs were insufficient and lacking internal controls. Going forward the University plans to implement a strategic process to document time and effort associated with research and development cluster and it’s federal grants. All employees that work with the Challenger Learning Center will continue to have their hours worked documented in the Paycom payroll software. Payroll is processed on a biweekly basis, and therefore on biweekly basis the payroll costs from the Challenger Learning Center will be reimbursed to the University from the various Challenger Learning Center bank accounts. This will be done as a percentage of time worked for the NIH Grant, the NASA Grant, and the general Challenger Learning Center functions.
Significant Deficiency in Allowable Costs and Cost Principles Federal Award Identification Assistance Listing Program Title: Formula Grants for Rural Areas Assistance Listing Program Number: 20.509 Federal Award ID Number and Year: Various Federal Agency: U.S. Department of Transportation Pass-Through Entity: Nebraska Department of Transportation Criteria Standards for documentation of personnel expenses at 2 CFR 200.430(i)(1) require that charges to federal awards for salaries and wages 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 documented. The Organization must establish and maintain effective internal control over the Federal award that provides reasonable assurance that they are managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal Award (2 CFR 200.303). Condition The Organization lacked adequate documentation to support approved rates of pay. Repeat Finding Yes, 2023-005. Cause Procedures within the Organization were inadequate to ensure that personnel expenses were adequately documented. Effect or Potential Effect Increased potential for errors or misuse of funds. Questioned Costs No. Statistical Sample No. Context Auditor randomly selected 60 payroll transactions covering the entire fiscal year for testing and judgmentally selected one additional payroll transaction for testing. Of the 61 transactions that were tested, there were frequent errors regarding: - Personnel files lacking (approved) rates of pay. - Rates of pay documented in personnel files that did not match the actual rates of pay. Recommendation We recommend the Organization establish a system of internal control consisting of policies and procedures whereby personnel files contain appropriately reviewed and approved documentation to support employee rates of pay. Views of Responsible Officials See Corrective Action Plan, below.
Program: Coronavirus State and Local Fiscal Recovery Funds Federal Financial Assistance Listing No.: 21.027 Federal Agency: U.S. Department of Treasury Passed-through: California Department of Finance Award Number and Year: CSLFRF Compliance Requirement: Allowable Costs Type of Finding: Material Weakness in Internal Control over Compliance, Instance of Noncompliance Criteria: 2 CFR 200.430(g)(vii) states that budget estimates 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 written policies) are promptly identified and entered in to the records, and c) the recipient’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 found that although the City charged 50% of the budgeted amount of an employees compensation to the program, the City did not perform a lookback to ensure that only 50% of the employees actual compensation was charged to the program. Cause: The City did not have procedures in place to perform a lookback of budgeted costs charged to grant programs. Effect: The City overcharged the program by the excess of the budgeted costs against the actual costs. Questioned Costs: None reported. Context/Sampling: We selected 100% of the City’s payroll costs of the program. Repeat Finding from Prior Year(s): No. Recommendation: We recommend that the City establish procedures to perform a lookback of budgeted expenditures charged to grants. Views of Responsible Officials: Management agrees with the finding. See separate corrective action plan.
FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, there was not an approved salary ordinance for noncertified staff for fiscal year 2023-2024. Of the nine paychecks selected for testing, three did not have hourly rates approved by the governing body. It was further determined that all noncertified staff employees did not have the hourly rates approved by the governing body for 2023-2024. Therefore, we were not able to determine if the amounts paid to these employees were appropriate. The lack of internal controls and noncompliance was limited to payroll disbursements of noncertified employees during 2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(g)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (meaning, 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. (ix) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. (x) It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting. Therefore, a precise assessment of factors contributing to costs is not required when IHEs record salaries and wages charged to Federal awards . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs The total of known questioned costs was $219,188. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and Allowable Costs/Cost Principles compliance requirement. An internal control system, including segregation of duties, should be designed and operate effectively to provide reasonable assurance that material noncompliance with the grant agreement or a compliance requirement of a federal program will be prevented, or detected and corrected, on a timely basis. In order to have an effective internal control system, it is important to have proper segregation of duties. This is accomplished by making sure proper oversight, reviews, and approvals take place and to have a separation of functions over certain activities related to the program. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same activity. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
FINDING 2024-003 Subject: Child Nutrition Cluster - Allowable Costs/Cost Principles Federal Agency: Department of Agriculture Federal Programs: School Breakfast Program, National School Lunch Program Assistance Listings Numbers: 10.553, 10.555 Federal Award Number and Year (or Other Identifying Number): FY 2024 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Allowable Costs/Cost Principles Audit Findings: Material Weakness, Modified Opinion Repeat Finding This is a repeat finding from the immediately prior audit report. The prior audit finding number was 2022-003. Condition and Context An effective internal control system was not in place at the School Corporation to ensure compliance with requirements related to the grant agreement and the Allowable Costs/Cost Principles compliance requirement. During the audit period, there was not an approved salary ordinance for noncertified staff for fiscal year 2023-2024. Of the nine paychecks selected for testing, three did not have hourly rates approved by the governing body. It was further determined that all noncertified staff employees did not have the hourly rates approved by the governing body for 2023-2024. Therefore, we were not able to determine if the amounts paid to these employees were appropriate. The lack of internal controls and noncompliance was limited to payroll disbursements of noncertified employees during 2024. Criteria 2 CFR 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.403 states in part: "Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. . . . (g) Be adequately documented. . . ." 2 CFR 200.430(g)(1) states in part: "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the recipient or subrecipient; (iii) Reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities (for IHEs, this is the IBS); (iv) Encompass federally-assisted and all other activities compensated by the recipient or subrecipient on an integrated basis but may include the use of subsidiary records as defined in the recipient's or subrecipient's written policy; (v) Comply with the established accounting policies and procedures of the recipient or subrecipient (See paragraph (i)(1)(ii) of this section for treatment of incidental work for IHEs.); and . . . (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. (viii) Budget estimates (meaning, 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. (ix) Because practices vary as to the activity constituting a full workload (for example, the Institutional Base Salary (IBS) for IHEs), records may reflect categories of activities expressed as a percentage distribution of total activities. (x) It is recognized that teaching, research, service, and administration are often inextricably intermingled in an academic setting. Therefore, a precise assessment of factors contributing to costs is not required when IHEs record salaries and wages charged to Federal awards . . ." Cause Management had not established an effective system of internal controls that would have ensured compliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement. Effect The failure to establish an effective internal control system enabled material noncompliance to go undetected. Noncompliance with the grant agreement and the Allowable Costs/Cost Principles compliance requirement could have resulted in the loss of federal funds to the School Corporation. Questioned Costs The total of known questioned costs was $219,188. Recommendation We recommended that the School Corporation's management establish an effective system of internal controls to ensure compliance and comply with the grant agreement and Allowable Costs/Cost Principles compliance requirement. An internal control system, including segregation of duties, should be designed and operate effectively to provide reasonable assurance that material noncompliance with the grant agreement or a compliance requirement of a federal program will be prevented, or detected and corrected, on a timely basis. In order to have an effective internal control system, it is important to have proper segregation of duties. This is accomplished by making sure proper oversight, reviews, and approvals take place and to have a separation of functions over certain activities related to the program. The fundamental premise of segregation of duties is that an individual or small group of individuals should not be in a position to initiate, approve, undertake, and review the same activity. Views of Responsible Officials For the views of responsible officials, refer to the Corrective Action Plan that is part of this report.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-001 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles 01/11/2011–02/28/2025 PH-002375 County of Los Angeles 12/01/2012–06/30/2025 PH-003746 County of Los Angeles 12/01/2012–06/30/2025 PH-003802 County of Los Angeles 01/01/2013–06/30/2025 H-208518 County of Los Angeles 04/01/2006–07/31/2025 PH-004205 County of Los Angeles 06/01/2020–02/28/2025 10126 PREV King County Public Health 03/01/2023–02/29/2024 11987 PREV King County Public Health 03/01/2024–02/28/2025 St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Bailey-Boushay House Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Only expenditures incurred related to the federal program should be requested for reimbursement. Condition: St. Mary Medical Center – Long Beach and Bailey-Boushay House did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. At Bailey-Boushay House, one employee’s salary that was charged to the grant was not supported by the underlying timesheet for the respective pay period and the related expenditures should not have been charged to the grant and requested for reimbursement. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management have been developing and implementing internal controls in response to the prior year finding; however, controls were not implemented during the entire period under audit. For one employee at Bailey-Boushay House, the timecard reflected zero hours for grant award 10126-PREV. There was a clerical error whereby the hours transferred from the timecard were reported to the wrong grant, resulting in an overcharge to the federal grant. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: $504, calculated as the amount charged to the grant that was not supported by the underlying time sheet for one employee. Context: We issued a material weakness for St. Mary Medical Center – Long Beach and Bailey-Boushay House related to internal controls in the prior year. Based upon the implementation date for the corrective action provided by management, the finding related to this internal control had not been remediated for the full period under audit. As such, we did not test the operating effectiveness of this control and are issuing a material weakness consistent with the prior year finding. For one employee, the clerical error resulted in an overcharge to the grant. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.1 million and represent 24% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. Total payroll expenditures, including fringe benefits, for Bailey-Boushay House were approximately $1.4 million and represent 30% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.6 million. We selected a sample of 43 payroll expenditures totaling $52,706 to perform compliance testing. Of the 43 samples, 18 samples totaling $18,451 and 25 samples totaling $34,255 were obtained from Bailey-Boushay House and St. Mary Medical Center – Long Beach, respectively. For 1 of the 18 samples selected from Bailey-Boushay House, comprising $403 in salary and $101 in related fringe benefit expense, for a total of $504, the expenditures were not supported by the related employee timesheet. Identification of a repeat finding: This is a repeat finding for St. Mary Medical Center – Long Beach – Finding 2023-003. For internal controls, this is a repeat finding for Bailey-Boushay House – Findings 2023-003, 2022-007, and 2021-008, but this current year finding is the first time noncompliance has been noted in our testing. Recommendation: We recommend management at St. Mary Medical Center – Long Beach and Bailey-Boushay House execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. At Bailey-Boushay House, we recommend that only expenses supported by an underlying timesheet be charged to the grant. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024. For the noncompliance noted at Bailey-Boushay House, Bailey-Boushay House will return the funds to the grantor for amounts that were not supported by an underlying timesheet.
Finding 2024-002 – Allowable Costs/Cost Principles Identification of the federal program: U.S. Department of Health and Human Services Medicaid Cluster Assistance Listing No. 93.778 Medical Assistance Program Passed through County of Los Angeles Department of Public Health Pass Through Number Pass Through Entity Grant Period PH-004983 County of Los Angeles 10/1/2022–06/30/2025 Dignity Community Care, DBA California Hospital Medical Center Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Condition: At California Hospital Medical Center, internal controls over the required allowability criteria with regard to payroll expense were not performed for 3 of 60 employees selected for testing. Cause: California Hospital Medical Center management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 60 payroll expenditures selected for testing, California Hospital Medical Center management did not properly approve the employee timecard for time charged to the grant in accordance with the practices of California Hospital Medical Center. Total payroll expenditures for California Hospital Medical Center were approximately $0.2 million and represent 7% of the total Medical Assistance Program expenditures of approximately $3.3 million. Identification of a repeat finding: This is not a repeat finding. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and implemented corrective action in July 2024, to require approval of timecards.
Finding 2024-006 – Allowable Costs/Cost Principles Identification of the federal program: U.S. Department of Treasury Assistance Listing No. 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-through entity: County of Los Angeles Pass-through number: PH-005009 St. Mary Medical Center – Long Beach Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a non-federal entity must “(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected 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 federal 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.” Condition: St. Mary Medical Center – Long Beach did not have effective internal controls addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430, including consistent approval of employees’ timecards. Cause: St. Mary Medical Center – Long Beach did not have controls in place to ensure that all timecards were approved. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: No questioned costs. Context: We selected 25 payroll transactions totaling $8,621. Of the 25 transactions selected for testing, 2 timecards with supporting payroll expenditures of $246 were not appropriately approved. We did not note any noncompliance with 2 CFR 200.430. Total payroll expenditures for St. Mary Medical Center – Long Beach were $80,190 and represent approximately 6% of the total program expenditures of approximately $1.4 million. Identification of a repeat finding: This is a not a repeat finding as this program was not previously subject to audit. Recommendation: We recommend management at St. Mary Medical Center – Long Beach execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding. Corrective action over timecard approval was implemented in April 2024.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
Criteria If a school operating a schoolwide program does not consolidate federal funds with state and local funds in a consolidated schoolwide pool, an employee who works, in whole or in part, on a federal program or cost objective must document time and effort as follows: (a) For an employee who works solely on a single cost objective (e.g., a single federal program whose funds have not been consolidated or federal programs whose funds have been consolidated but not with State and local funds), an LEA is not required to maintain records reflecting the distribution of the employee’s salary and wages, including among the Federal programs included in the consolidation, if applicable. (b) For an employee who works on multiple activities or cost objectives (e.g., in part on a federal program whose funds have not been consolidated in a consolidated schoolwide pool and in part on federal programs supported with funds consolidated in a schoolwide pool or on activities that are not part of the same cost objective), an LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to: (i) The federal program or cost objective; and (ii) Each other program or cost objective supported by consolidated federal funds or other revenue sources. Condition/Context We haphazardly sampled thirteen employees who received compensation under the Title I grant. We viewed the employee time sheet and payroll certifications and annual certifications determining that the employee’s time and effort and payroll certifications are reviewed and approved. We noted that eight of the employees that spent less than 100% of their time on the grant did not indicate how much of their time was allocated to the grant. Therefore, we were unable to verify these employees’ time and effort. We also noted two employees that had missing payroll certifications. Therefore, we were unable to verify approval of the certification had occurred. The sampling methodology used was not statistically valid. Cause Time and effort statements were not prepared in all cases and adequate oversight of the employee’s payroll certification was not in place in order to identify mistakes approved pay. Effect Without demonstrable, documented controls supporting compliance with Title I compliance standards, compliance with the requirements may not be assured. Questioned Costs Known and likely questioned costs were not determinable. Recommendation We recommend that the School District institute additional procedures to ensure that employee’s time and effort, for those with less than 100% allocated to the grant, and payroll certifications are documented and reviewed for accuracy. View of Responsible Officials The School District will institute additional procedures to ensure that time and effort determinations are reviewed and accurate.
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 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 payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 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 payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
2024 – 003: Allowable Costs Federal Agency: U.S. Department Education Federal Program Name: Education Stabilization Fund Assistance Listing Number: 84.425 Pass-Through Agency: Indiana Department of Education Pass-Through Numbers: S425D210013, S425D210013, S425W210015 Award Period: July 1, 2023 – June 30, 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 payroll expenses were charged to the grant program but were not supported with time and effort documentation and was for an employee bonus. Questioned costs: $6,631 Context: During the process of obtaining an understanding of internal controls and processing of payroll expenditures, we noted payroll charge to the grant did not have time and effort documentation for amounts charged to the grant and included a bonus employee charged to the grant inaccurately. Cause: Salary figures for salaried employees were charged to the federal grant based on unsupported work actually performed for the program and inaccurate payroll costs were charged to the grant for an employee bonus. Effect: NWILCS has not fully followed compliance attributes with the allowable costs principles set forth by the Compliance Supplement related to allocation of salaries being charged based on approved time worked for a program. Personnel need to reinforce policies to ensure control procedures are in place to ensure salaries charged to a grant are appropriately based on actual approved time worked in a program. Repeat finding: No. Recommendation: We recommend NWILCS ensure policies and procedures for payroll expenditures for grant programs be charged to the federal grant based on approved hours worked in the program. Views of responsible officials: There is no disagreement with the audit finding.
Subject: Title I Grants to Local Educational Agencies - Activities Allowed or Unallowed, Allowable Costs/Cost Principles Federal Agency: Department of Education Federal Program: Title I Grants to Local Educational Agencies Assistance Listing Number: 84.010A Federal Award Numbers and Years (or Other Identifying Numbers): S010A210014, S010A220014, S010A230014 Pass-Through Entity: Indiana Department of Education Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Audit Finding: Material Weakness, Other Matters Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must: (a) Establish and maintain effective internal control over Federal award 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 award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ." 2 CFR 200.430 states in part: (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, (iv) Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non-Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: An effective internal control system was not in place at the School Corporation in order to ensure compliance with requirements related to the grant agreement and the activities allowed or unallowed and allowable costs/cost principle compliance requirements. Cause: The School Corporation's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above. Effect: The failure to establish an effective internal control system placed the School Corporation at risk of noncompliance with the grant agreement and the compliance requirements. A lack of segregation of duties within an internal control system could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by not having proper oversight, reviews, and approvals over the activities of the programs. Questioned Costs: $5,705 (Known questioned costs) Context: For 5 selections, in a sample of 40 payroll transactions, the School Corporation did not have time and effort logs to support the portion of the employees’ time charged to the grant. The employees’ time was split with another federal grant, however the School Corporation did not have support for the allocation of the time charged to the Title I grant. Additionally, for three selections, the School Corporation charged a higher percentage to the Title I grant than what the time and effort log percentage showed. Identification as a repeat finding: This is a repeat finding from the immediately prior audit. The prior finding number was 2022-008. Recommendation: We recommend management ensure semi-annual certifications are completed for all employees charged to the grant awards at 100% and time and effort logs are maintained for all employees not charged at 100% to support work performed and charged to the grant awards. We recommend management establish a documented review by management of semi-annual certifications and time and effort logs to ensure time charged to grant awards is allowable and allocable based on work performed in accordance with grant requirements. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.