2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
2024-038 Noncompliance with Payroll and Travel Expense Policies and Procedures Compliance Requirements: Activities Allowed or Unallowed Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agencies: Various Pass-Through Entities: Various AL Numbers and Titles: Various – Research and Development Cluster Federal Award Numbers: Various Questioned Costs: None Identified Description: The University did not comply with payroll and travel expense policies and procedures. Background Information: During the year ended June 30, 2024, the Georgia Institute of Technology’s (“GIT” or the “Institute”) Department of Internal Audit completed audits of compliance with payroll and travel expense policies and procedures of two Schools within the Institute and identified noncompliance with those policies and procedures. Criteria: • Uniform Guidance 2 CFR § 200.302 Financial management • Uniform Guidance 2 CFR § 200.308 – Revision of budget and program plans • Uniform Guidance 2 CFR § 200.403 – Factors affecting allowability of costs • Uniform Guidance 2 CFR § 200.404 – Reasonable costs • Uniform Guidance 2 CFR § 200.405 – Allocable costs • Uniform Guidance 2 CFR § 200.430 – Compensation – personal services • Uniform Guidance 2 CFR § 200.475 – Travel costs • Uniform Guidance 2 CFR § 200.432 – Conferences • Title 41 CFR § 301-11.12 • Title 41 CFR § 301-11.200 Subpart C – Reduced per Diem Condition: • Noncompliance with travel policies • Noncompliance with payroll expense policies and procedures Cause: • Lack of sufficient controls for proper review and approval of travel authorizations and expensed transactions associated with sponsored award expenses • Lack of sufficient controls to ensure time and effort is properly charged to sponsored awards • Lack of consistency enforcing payroll expense policies for sponsored award management Effect: Payroll and travel expenditures may not be in compliance with federal or grant award provisions. Recommendation: • Complete and approve spend authorizations before travel to validate the necessity and reasonableness of expenses. • Include detailed justifications in spend authorizations for the travel purpose and award benefit. • Require sufficient justification for payroll expenses charged to sponsored awards, particularly for significant variances in effort. • Update internal control policies to enhance oversight and verification of time and effort reporting. This should include clear guidelines on the documentation required to support the work performed and the consequences of non-compliance. Views of Responsible Officials: Management agrees with the finding. See management’s corrective action plan.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Number: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH controls over time and effort reporting are lacking to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built and implemented a complex time-reporting system using internal worksheets for employees to allocate time spent on various activities during the pay periods. Reconciliations of the hours worked versus the hours charged to the State’s payroll and accounting systems are performed quarterly. Recorded amounts are adjusted accordingly to ensure charges to the federal programs are consistent with actual time worked on the various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(g)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following control deficiencies pertaining to the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. For the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 25 of the 80 selected weekly timesheets lacked a supervisory review signature. In addition, RIDOH was unable to provide 1 timesheet for an employee selected in the sample. For the Drinking Water State Revolving Fund (DWSRF) program, 4 of the 80 selected weekly timesheets lacked a supervisory review signature. • Two exceptions in the ELC sample noted above, and one exception in the DWSRF sample noted above involved timesheet activity recorded to general category codes (i.e., EH Management & Leadership), which lack sufficient detail (i.e., underlying activity performed in support of related category code) to support specific Federal program allocation. This resulted in certain payroll costs being overallocated to the ELC program (questioned costs $1,126) and to the DWSRF program (questioned costs $704). Cause: Current policies and procedures were ineffective to ensure amounts claimed and reimbursed by Federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet details for general category codes prevented direct verification of recorded timesheet activities to the underlying charges for the related federal programs. Effect: Personnel costs reimbursed from Federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $1,126 (ELC – 93.323), $704 (DWSRF – 66.468) Valid Statistical Sampling: Yes RECOMMENDATION 2024-046 Enhance reporting of time and effort for general timesheet category activities to improve documentation and support for personnel costs charged to Federal programs.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Number: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH controls over time and effort reporting are lacking to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built and implemented a complex time-reporting system using internal worksheets for employees to allocate time spent on various activities during the pay periods. Reconciliations of the hours worked versus the hours charged to the State’s payroll and accounting systems are performed quarterly. Recorded amounts are adjusted accordingly to ensure charges to the federal programs are consistent with actual time worked on the various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(g)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following control deficiencies pertaining to the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. For the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 25 of the 80 selected weekly timesheets lacked a supervisory review signature. In addition, RIDOH was unable to provide 1 timesheet for an employee selected in the sample. For the Drinking Water State Revolving Fund (DWSRF) program, 4 of the 80 selected weekly timesheets lacked a supervisory review signature. • Two exceptions in the ELC sample noted above, and one exception in the DWSRF sample noted above involved timesheet activity recorded to general category codes (i.e., EH Management & Leadership), which lack sufficient detail (i.e., underlying activity performed in support of related category code) to support specific Federal program allocation. This resulted in certain payroll costs being overallocated to the ELC program (questioned costs $1,126) and to the DWSRF program (questioned costs $704). Cause: Current policies and procedures were ineffective to ensure amounts claimed and reimbursed by Federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet details for general category codes prevented direct verification of recorded timesheet activities to the underlying charges for the related federal programs. Effect: Personnel costs reimbursed from Federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $1,126 (ELC – 93.323), $704 (DWSRF – 66.468) Valid Statistical Sampling: Yes RECOMMENDATION 2024-046 Enhance reporting of time and effort for general timesheet category activities to improve documentation and support for personnel costs charged to Federal programs.
DRINKING WATER STATE REVOLVING FUND – 66.468 Federal Awarding Agency: Environmental Protection Agency (EPA) Federal Award Fiscal Years: 2022 - 2030 Federal Award Number: 99126120, 99126122, 99126E22, 99126S22, 99126L22, 99126123, 99126E23, 99126S23, 99126121, 99126L23 Pass-through Entity: Rhode Island Infrastructure Bank (RIIB) Administered by: Rhode Island Department of Health (RIDOH) EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) – 93.323 Federal Awarding Agency: U.S. Department of Health and Human Services (HHS) Federal Award Fiscal Years: 2019 - 2027 Federal Award Number: NU50CK000519 Administered by: Rhode Island Department of Health (RIDOH) Compliance Requirement: Allowable Costs/Cost Principles TIME AND EFFORT REPORTING RIDOH controls over time and effort reporting are lacking to ensure accurate allocations and reimbursements from federal programs. Background: RIDOH has built and implemented a complex time-reporting system using internal worksheets for employees to allocate time spent on various activities during the pay periods. Reconciliations of the hours worked versus the hours charged to the State’s payroll and accounting systems are performed quarterly. Recorded amounts are adjusted accordingly to ensure charges to the federal programs are consistent with actual time worked on the various programs. Criteria: 45 CFR §75.430(i)(1) and 2 CFR §200.430(g)(1) require that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.” Condition: Our review of personnel costs identified the following control deficiencies pertaining to the allowability of personnel expenditures: • Amounts allocated to federal programs for personnel costs were not consistently supported by properly signed and reviewed timesheets. For the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) program, 25 of the 80 selected weekly timesheets lacked a supervisory review signature. In addition, RIDOH was unable to provide 1 timesheet for an employee selected in the sample. For the Drinking Water State Revolving Fund (DWSRF) program, 4 of the 80 selected weekly timesheets lacked a supervisory review signature. • Two exceptions in the ELC sample noted above, and one exception in the DWSRF sample noted above involved timesheet activity recorded to general category codes (i.e., EH Management & Leadership), which lack sufficient detail (i.e., underlying activity performed in support of related category code) to support specific Federal program allocation. This resulted in certain payroll costs being overallocated to the ELC program (questioned costs $1,126) and to the DWSRF program (questioned costs $704). Cause: Current policies and procedures were ineffective to ensure amounts claimed and reimbursed by Federal programs for personnel costs were reflective of the actual work performed on the various programs/projects listed. The State’s lack of sufficient timesheet details for general category codes prevented direct verification of recorded timesheet activities to the underlying charges for the related federal programs. Effect: Personnel costs reimbursed from Federal awards could be unallowable due to insufficient support and documentation. Questioned Costs: $1,126 (ELC – 93.323), $704 (DWSRF – 66.468) Valid Statistical Sampling: Yes RECOMMENDATION 2024-046 Enhance reporting of time and effort for general timesheet category activities to improve documentation and support for personnel costs charged to Federal programs.
Federal Agency: U.S. Department of Transportation Federal Program Name: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: 2024; FAIN not available. Pass-Through Agency: State of Vermont Agency of Transportation and Tribal Transit Program Pass-Through Number(s): EA#COVIDFTA-934 EA#FT202201-704 EA#FT24FLEX-454 EA#CRRSAA22-934 EA#FT23FLEX-064 EA#FT24FLEX-554 EA#FT201806-454 EA#FT23FLEX-454 EA#FT24FLEX-854 EA#FT201806-554 EA#FT23FLEX-554 EA#FT24FLEX-954 EA#FT201806-954 EA#FT23FLEX-954 EA#FT24FORM-454 EA#FT201903-704 EA#FT23FORM-064 EA#FT24FORM-924 EA#FT202104-704 EA#FT23FORM-934 EA#FT24FORM-934 EA#FT202104-954 EA#FT24FLEX-064 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: Significant deficiency in internal control over compliance and other matter Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on a federal award and a non-federal award. Additionally, 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted that for a sample of payroll disbursements, the distribution of the employees’ salaries among activities and cost objectives was not supported by the underling records used to calculate said distribution. Questioned costs: None above the reportable threshold. Context: Seven (7) of forty payroll transactions were selected for testing in our statistically valid sample. Federal Agency: U.S. Department of Transportation Federal Program Name: Formula Grants for Rural Areas and Tribal Transit Program Assistance Listing Number: 20.509 Federal Award Identification Number and Year: 2024; FAIN not available. Pass-Through Agency: State of Vermont Agency of Transportation and Tribal Transit Program Pass-Through Number(s): EA#COVIDFTA-934 EA#FT202201-704 EA#FT24FLEX-454 EA#CRRSAA22-934 EA#FT23FLEX-064 EA#FT24FLEX-554 EA#FT201806-454 EA#FT23FLEX-454 EA#FT24FLEX-854 EA#FT201806-554 EA#FT23FLEX-554 EA#FT24FLEX-954 EA#FT201806-954 EA#FT23FLEX-954 EA#FT24FORM-454 EA#FT201903-704 EA#FT23FORM-064 EA#FT24FORM-924 EA#FT202104-704 EA#FT23FORM-934 EA#FT24FORM-934 EA#FT202104-954 EA#FT24FLEX-064 Award Period: July 1, 2023 through June 30, 2024 Compliance Requirement: Allowable Costs / Cost Principles Type of Finding: Significant deficiency in internal control over compliance and other matter Criteria or specific requirement: The United States Code of Federal Regulations (CFR) Title 2 Part 200.430 indicates charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Such records should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on a federal award and a non-federal award. Additionally, 2 CFR 200.303 indicates that non-Federal entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: We noted that for a sample of payroll disbursements, the distribution of the employees’ salaries among activities and cost objectives was not supported by the underling records used to calculate said distribution. Questioned costs: None above the reportable threshold. Context: Seven (7) of forty payroll transactions were selected for testing in our statistically valid sample. Cause: The procedures implemented to calculate and allocate the distribution of payroll charges to cost objectives did not prevent certain distributions which did not agree to the underlying records. Effect: Unallowable costs were charged to the program. Repeat Finding: No. Recommendation: We recommend management enhance procedures and controls to ensure that the distribution of payroll costs charged to the grant are verified against the underlying records supporting the distribution allocation. Views of responsible officials: Management agrees with the finding.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: For one (1) of sixty-eight (68) expenditures tested, we noted one timecard where the employee’s timecard was not approved by a supervisor. Cause: The County’s procedures did not consistently ensure that the review of timecards was documented. Effect: Lack of review for personnel hours could lead to unallowable activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty-eight (68) out of one thousand seven hundred eight (1,708) expenditures were tested, totaling $537,604 out of $4,554,560 of the federal program expenditures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County modify and/or strengthen its current policies and procedures to ensure that all timecards consistently document evidence of supervisor approval. The procedures should also address the compensating controls for circumstances where obtaining the supervisor’s approval is not possible. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: For one (1) of sixty-eight (68) expenditures tested, we noted one timecard where the employee’s timecard was not approved by a supervisor. Cause: The County’s procedures did not consistently ensure that the review of timecards was documented. Effect: Lack of review for personnel hours could lead to unallowable activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty-eight (68) out of one thousand seven hundred eight (1,708) expenditures were tested, totaling $537,604 out of $4,554,560 of the federal program expenditures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County modify and/or strengthen its current policies and procedures to ensure that all timecards consistently document evidence of supervisor approval. The procedures should also address the compensating controls for circumstances where obtaining the supervisor’s approval is not possible. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Assistance Listing No.: 10.557 Federal Grantor: U.S. Department of Agriculture Passed-through: California Department of Public Health Award No.: 22-10307 Award Year: 2024 Compliance Requirement: Activities Allowable or Unallowed and Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: For one (1) of sixty-eight (68) expenditures tested, we noted one timecard where the employee’s timecard was not approved by a supervisor. Cause: The County’s procedures did not consistently ensure that the review of timecards was documented. Effect: Lack of review for personnel hours could lead to unallowable activities and costs to be charged to the Federal program. Questioned Costs: No questioned costs were identified as a result of our procedures. Context/Sampling: A nonstatistical sample of sixty-eight (68) out of one thousand seven hundred eight (1,708) expenditures were tested, totaling $537,604 out of $4,554,560 of the federal program expenditures. Repeat Finding from Prior Years: No. Recommendation: We recommend that the County modify and/or strengthen its current policies and procedures to ensure that all timecards consistently document evidence of supervisor approval. The procedures should also address the compensating controls for circumstances where obtaining the supervisor’s approval is not possible. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
Program: Disaster Grants – Public Assistance (Presidentially Declared Disasters) Assistance Listing No.: 97.036 Federal Grantor: U.S. Department of Homeland Security Passed-through: County of El Dorado, California Award No.: FEMA 5302-FM-CA, LEMA Award Year: 2024 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: 2 CFR Section 200.303(a), Internal Controls, states that the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. 2 CFR Section 200.430, Compensation – Personal Services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: During our testing of the County’s compliance with activities allowed or unallowed and allowable costs/cost principles requirements, we noted that seven (7) out of fifty (50) expenditure transactions were calculated incorrectly, resulting in total known disallowed costs of $474,776. Cause: The County did not have internal controls in place to ensure that the salaries claimed for reimbursement were being calculated correctly. Effect: The County submitted salaries and benefits for reimbursement for the California Caldor Fire incident. The amount of salaries and benefits claimed for reimbursement was overstated by $474,776. Questioned Costs: Our testing resulted in questioned costs in the amount of $9,344. However, management determined the total known questioned costs for the total population was $474,776. Context/Sampling: A nonstatistical sample of fifty (50) expenditure transactions were selected for testing out of a population of 1,063. Repeat Finding from Prior Years: No. Recommendation: We recommend the County implement internal controls to ensure all costs charged to the programs are calculated correctly in accordance with the program requirement, and that there is proper review and approval. Views of Responsible Officials: Management agrees. See separately issued Corrective Action Plan.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
2 CFR § 400.1 gives regulatory effect to the Department of Agriculture for 2 CFR § 200.430 which provides, in part, that costs of compensation are allowable to the extent that charges to federal awards for salaries and wages are based on records that accurately reflect the work performed. Furthermore, the District’s Time and Effort Reporting Policy (#6116) provides that the total compensation for individual employees: A. Is reasonable for the services rendered, conforms to the District’s established written policy, and is consistently applied to both Federal and non-Federal activities; and B. Follows an appointment made in accordance with the District’s written policies and meets the requirements of Federal statute, where applicable. Time and Effort reports: A. Are supported by a system of internal controls which provide reasonable assurance that the charges are accurate, allowable, and properly allocated; B. Are incorporated into the official records of the District; C. Reasonably reflect the total activity for which the employee is compensated by the District, not exceeding 100% of the compensated activities; D. Encompass both Federally assisted and other activities compensated by the District on an integrated basis; E. Comply with the District’s established accounting policies and practices; F. Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one (1) Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two (2) or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. Due to a lack of proper implementation of the District policy noted above, errors were noted during the testing of salary expenditures for the Child Nutrition Cluster. The semi-annual certificates representing salaries and benefits paid of $7,309 out of $30,433 or 24% for the lunchroom employees were not signed as approved by the Supervisor nor were there detailed time sheets to support that employees worked solely on a single Federal program or cost objective. This could result in further questions regarding salaries and the allowability of costs related to grants. In addition, could result in the misuse of public funds and ultimately questioned costs. The District should review the federal guidance associated with maintaining time and effort documentation in comparison to their policy and should fully implement said policy. This will help ensure all monies spent for the School District's Federal programs are properly support in accordance with Uniform Guidance requirements. In addition, salary notices should be specific as to position of employee and be signed by the Treasurer, Board President and employee.
Repeat Finding: No Questioned Costs: None Funding Agency: Department of Education AL Number: 84.351A Award Year: 10/1/2023 – 9/30/2024 Condition: The payroll distribution records did not reasonably reflect the total activity of employees. Criteria: The Organization should follow the Uniform Guidance requirement 2 CFR 200.430(i), which requires the Organization to charge the federal awards for salaries and wages must be based on records that accurately reflect the work performed, budget estimates alone do not qualify as support for charges to Federal awards. Cause: The Organization utilized budget estimates alone to calculate the salaries and wages for charges to Federal awards. This is the first year the Organization has a federal program. Effect: The Organization was not in compliance with Uniform Guidance requirements, resulting in a significant deficiency in internal control over compliance. Recommendations: We recommend that the Organization update the estimates procedures to align with what is required by the Uniform Guidance. View of Responsible Officials: Management agrees with the finding and has committed to implementing a corrective action plan.
Finding 2024-006: Timekeeping and Payroll Allocations (Significant Deficiency) Information on the Federal Program: 93.368 Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: i. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; ii. Be incorporated into the official records of the non-Federal entity; iii. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; v. Comply with the established accounting policies and practices of the non-Federal entity; 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: We noted that while the Foundation does keep timesheets, we noted several instances in which the timesheets lacked evidence of supervisory approval. In addition, we noted several instances in which the timesheet was not dated when approved. Cause: The Foundation does not document their review and approval process consistently over timesheets. Effect or Potential Effect: Without the proper, documented, approval processes in place over timesheets, there exists the potential for allocation errors. Questioned Costs: Undetermined, as the allocations are based on employee timesheets, but it is undeterminable if those timesheets were truly accurate due to the lack of consistent, documented approval over the timesheets by a supervisor. Context: Our audit procedures consisted of testwork performed over a sample of timesheets submitted during the year under audit. We consider our sample to be representative of the population. The issue appears to be systematic in nature. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Foundation ensure that all approvals over timesheets are clearly documented and dated.
Federal Program: ALN 14.218 - Community Development Block Grants/Entitlement Grants Category: Compliance/Internal control Compliance Requirement: Allowable Costs/Cost Principles Criteria: As part of the standards for documentation of personnel expenses (2 CFR §200.430 (i)), it is required that charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed and be supported by a system of internal control that ensures accuracy, allowability, and proper allocation. According to the record retention requirements (2 CFR §200.334), recipients and subrecipients are required to retain all records for three years from the date of submission of their final financial report, or from the date of submission of the respective reports if the award is renewed quarterly or annually. The federal regulations require employers to verify the identity and employment authorization of individuals hired for employment in the United States using the Employment Eligibility Verification form (I-9). The EEOC's Enforcement Guidance on Harassment in the Workplace recommends that employers periodically update their sexual harassment policies and conduct regular training to ensure compliance with federal antidiscrimination laws. 2 CFR §200.112 requires that Federal agencies establish conflict of interest policies for Federal awards. Recipients or subrecipients must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity in accordance with the established Federal agency policies. Regular updates to conflict-of-interest certifications are recommended to ensure ongoing compliance. As part of the BGCPR recruitment, selection, and hiring process, it is required that the employee file includes a copy of form I-9 and a signed copy of the job description. The protocol for disclosure of conflicts of interest establishes that as part of the recruitment procedures and on an annual basis, all candidates for the board of directors, management teams, employees, and, in certain cases, investors and donors are required to complete a conflict-of-interest disclosure form. Condition: There were significant gaps in the documentation of employee files, which pose potential noncompliance risks. Cause: Lack of monitoring procedures to ascertain compliance with federal, local and internal requirements.Effect or potential effect: Failure to maintain proper documentation can result in non-compliance with federal regulations and organizational policies, potentially leading to legal penalties and ethical breaches. Questioned costs: Not determined Context: The allowable activities/cost test revealed the following: • One (1) of fifty (50) employees’ files tested did not have a copy of the Employment eligibility verification form (I- 9) • Nineteen (19) of fifty (50) employees’ files tested did not have a copy of the signed job description. • Forty-nine (49) of fifty (50) employees’ files tested did not have evidence of certification regarding compliance with conflicts of interest protocol. • Twenty-nine (29) of fifty (50) employees’ files tested did not have evidence of annual training of sexual harassment. Recommendation: We recommended that BGCPR implement comprehensive record retention policies and ensure strict adherence to established procedures. Additionally, BGCPR should establish monitoring procedures to ascertain the completeness of employee files in compliance with regulatory requirements. Views of responsible officials: BGCPR acknowledges that document retention policy does not comply with the requirements set forth in Title 2 of the Code of Federal Regulations (2 CFR §200.334). This regulation requires that all financial records, supporting documents, statistical data, and other files related to federal grants be retained for a minimum period of three years from the date of submission of the final financial report. In the absence of this policy, BGCPR exposes itself to risks of non-compliance and possible sanctions during federal audits or reviews. Therefore, it is considered a priority to develop and implement a document retention policy that ensures compliance with this regulation and strengthens institutional transparency and accountability. As a corrective measure, BGCPR will take the following actions and will anticipate completing on June 30, 2025: a. Establish clear guidelines for the creation, storage, access, updating, and disposal of records. b. Define retention periods in accordance with legal requirements. c. Develop periodic monitoring procedures to verify record completeness and compliance. d. Implement scheduled internal reviews and standardized checklists. e. Assign specific responsibilities to Human Resources personnel for policy enforcement.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
FA 2024-001 Improve Controls over Employee Compensation Compliance Requirement: Allowable Costs/Cost Principles Internal Control Impact: Significant Deficiency Compliance Impact: Nonmaterial Noncompliance Federal Awarding Agency: U.S. Department of Agriculture Pass-Through Entity: Georgia Department of Education AL Numbers and Title: 10.553 – School Breakfast Program 10.555 – National School Lunch Program COVID-19 – 10.555 – National School Lunch Program Federal Award Number: 245GA324N1199 (Year: 2024) 225GA324N1099 (Year: 2024) Questioned Costs: $102,234 Repeat of Prior Year Finding: 2023-004 Description: The policies and procedures of the School District were insufficient to provide adequate internal controls over the employee compensation process as it relates to the Child Nutrition Cluster. Background Information: The Child Nutrition Cluster (CNC) is comprised of various programs that are intended to assist states in administering and overseeing food service program operators that provide healthful, nutritious meals to eligible children in public and non-profit private schools, residential childcare institutions, and summer programs. This Cluster of programs also fosters healthy eating habits in children by providing fresh fruits and fresh vegetables to children attending elementary and secondary schools and encourages the domestic consumption of nutritious agricultural commodities. CNC funding was granted to the Georgia Department of Education (GaDOE) by the U.S. Department of Agriculture. GaDOE is responsible for distributing funds to local educational agencies (LEAs) and overseeing the various CNC programs. CNC funds totaling $58,647,091.23 were expended and reported on the DeKalb County Board of Education’s Schedule of Expenditures of Federal Awards (SEFA) for fiscal year 2024. Criteria: As a recipient of federal awards, the School District is required to establish and maintain effective internal control over federal awards that provides reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards pursuant to Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.303 – Internal Controls. Provisions included in the Uniform Guidance, Section 200.403 – Factors Affecting Allowability of Costs state that “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, (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity… (g) Be adequately documented…” Furthermore, provisions included in the Uniform Guidance, Section 200.430 – Compensation-Personal Services prescribe standards for documentation of personnel expenses and state, in part, that “(a) … Costs for compensation are allowable to the extent that they satisfy… specific requirements…, and that the total compensation for individual employees: (1) is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity’s laws and/or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i)…, [as follows:] (i) 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…” Condition: A sample of 60 employees was randomly selected for testing using a non-statistical sampling approach. These employees were reviewed to determine if internal controls were properly functioning, and applicable compliance requirements were met. The following deficiencies were noted: • One employee who no longer worked for the School District received salary payments totaling $8,715. • Two employees did not have any of the required certifications, or comparable documentation, to support their salary payments totaling $48,837. • One employee was missing required certifications, or comparable documentation, to support a portion of their salary payments totaling $8,128. • One employee’s salary in the amount of $2,671 was incorrectly charged to the federal program for one pay period. • Documentation of additional pay totaling $33,883 could not be located for 14 employees. Questioned Costs: Upon testing a sample of $1,399,390 in personnel services expenditures, known questioned costs of $102,234 were identified for payroll charges not supported by adequate documentation. Using the total personnel services expenditure population of $18,999,516 (excluding benefits payments), we project the likely questioned costs to be approximately $1,388,035. The following Assistance Listing Numbers were affected by known and likely questioned costs: 10.553 and 10.555. Cause: A lack of oversight by personnel in the Office of Federal Grants and Program Compliance led to noncompliance with the requirements of the Uniform Guidance in relation to charging of personnel costs to a federal program. Effect: The School District is not in compliance with the Uniform Guidance and GaDOE guidance. Failure to pay employees with CNC funds the appropriate amount and/or maintain documentation supporting those payments could result in the expenditure of funds for unallowable purposes. This may also expose the School District to unnecessary financial strains and shortages within the CNC funds as ED or GaDOE may require the School District to return funds associated with improperly documented expenditures. Recommendation: The School District should evaluate their internal control process related to the approval and retention of documentation to support employee compensation payments. Where vulnerable, the School District should develop and/or modify its policies and procedures to ensure that CNC employees are paid appropriately. Furthermore, management should develop and implement a monitoring process to ensure that these procedures are functioning properly. Views of Responsible Officials: We concur with this finding.
2024-002 INSUFFICIENT WIOA ELIGIBILITY DOCUMENTATION Federal Agency: U.S. Department of Labor Federal Program and Assistance Listing Number: 17.265 Type of Finding: Significant Deficiency, Non-compliance Compliance Area: Eligibility Award Period: National Employment and Training (07/01/2022-06/30/2025) National Employment and Training (06/01/2023-06/30/2026) Questioned Costs: None Condition: 1 out of 40 sampled applications lacked sufficient documentation to support eligibility under WIOA Section 166. Specifically, the file was missing verification of tribal affiliation, proof of residency, and documentation of public assistance status. Criteria: Per 2 CFR §200.303 and §200.430, recipients of federal funds must establish and maintain effective internal controls to ensure compliance with federal statutes, regulations, and the terms and conditions of the award. The NIYC-WIOA Policy Manual requires that eligibility determinations be supported by verifiable documentation, including tribal enrollment records, residency verification, and evidence of low-income or public assistance status. Effect: Failure to maintain complete eligibility documentation may result in noncompliance with federal program requirements, potential disallowed costs, and increased risk of audit findings or funding claw backs. Cause: The missing documentation was attributed to a participant file being misplaced during a staff transition, indicating a lack of centralized and secure file management protocols.
2024-003 INSUFFICIENT PAYROLL AUTHORIZATION AND TIMESHEET CONTROLS Federal Agency: U.S. Department of Labor Federal Program and Assistance Listing Number: 17.265 Type of Finding: Significant Deficiency, Non-compliance Compliance Area: Allowable Costs (Payroll) Award Period: National Employment and Training (07/01/2022-06/30/2025) National Employment and Training (06/01/2023-06/30/2026) Questioned Costs: None Condition: Our testing of payroll disbursements identified the following exceptions: -One (1) out of 45 payroll transactions lacked supporting documentation for an approved pay rate change. -One (1) out of 45 payroll transactions resulted in an overpayment for 52 hours instead of the authorized 20 hours. Criteria: Per 2 CFR §200.430 and NIYC's Fiscal Manual, all payroll transactions must be supported by appropriate documentation, including approved personnel action forms for rate changes and verified timesheets. Payroll must be reviewed and approved by designated personnel prior to processing. Effect: These deficiencies increase the risk of financial loss, inaccurate payroll reporting, and noncompliance with federal cost principles. They also undermine the reliability of internal controls over payroll processing. Cause: The overpayment was due to a clerical error in the Work Experience (WEX) timesheet process. The missing pay rate documentation was not retained during a period of organizational restructuring.
Statement of condition: Time certifications that support salaries and wages charged to the Education Stabilization program were not maintained. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause of condition: Policies and procedures are in place which require time certifications to be maintained for all employees paid from federal funds. However, due to turnover of key personnel, these policies and procedures were not followed in the current year. Effect of condition: Without proper documentation, it cannot be verified that salaries and wages charged to the Education Stabilization program were based on actual time spent on allowable program-related activities. Context: Time certifications were not maintained for any employees paid from Education Stabilization Funds. This resulted in questioned costs of $2,548,644. Recommendation: To ensure that salaries and wages charged to federal award programs are accurate, time certifications should be maintained for all employees paid from federal funds. All time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel, as evidenced by the School personnel’s signature. We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administering. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place for the review and approval of time certifications.
Statement of condition: Time certifications that support salaries and wages charged to Title I, Part A were not maintained for all employees. Of the time certifications that were maintained, not all showed evidence of review and approval performed. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause of condition: Policies and procedures are in place which require time certifications to be maintained for all employees paid from federal funds. However, due to turnover of key personnel, these policies and procedures were not followed in the current year. Effect of condition: Without proper documentation, it cannot be verified that salaries and wages charged to Title I, Part A were based on actual time spent on allowable program-related activities. Context: A sample of 40 employees paid with Title I, Part A funds were selected for testing. The audit testing found that time certifications were not maintained for 22 of the 40 employees. This resulted in questioned costs of $40,403. Additionally, the audit testing found that one employee’s time certification had no evidence of review and approval from appropriate School personnel. Recommendation: To ensure that salaries and wages charged to federal award programs are accurate, time certifications should be maintained for all employees paid from federal funds. All time certifications should be signed by the employee and reviewed and approved by the appropriate School personnel, as evidenced by the School personnel’s signature. We also recommend that the Federal Program Director position is filled by an individual that has training and knowledge of the federal program they are administrating. Views of responsible officials and planned corrective actions: Management agrees with this finding and will put procedures in place for the maintenance, review, and approval of time certifications. See 2024-005 for management's detailed action plan surrounding the time certification findings.
Statement of condition: The allocation of salaries and wages charged to the Title I, Part A program for employees tested was not accurate per supporting documentation of time certifications. Criteria: Title 2 U.S. Code of Federal Regulations (CFR) 200.430(g)(1)(i) requires that salaries and wages charged to federal awards must be supported by a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The School’s time certifications meet this regulation but these time certifications do not support the allocation of pay for these employees. Cause of condition: Procedures are in place for personnel to review the accuracy of the time certification and to ensure accuracy in the recording of how salaries and wages are allocated in accordance with the time certifications. However, there was a breakdown in this control. Effect of condition: During testing, it was noted that time certifications for employees who were paid with Title I, Part A funds were not supported by time certifications which state actual time worked by program for each employee. Context: A sample of 40 employees paid with Title I, Part A funds were selected for testing. The audit testing found that 8 of the employees’ time certifications indicated that they worked less hours in the program than what was actually charged to the program. This resulted in questioned costs of $3,225. Recommendation: To ensure that salaries and wages charged to federal award programs are supported by time certifications, a review of completed time certifications should be compared to salaries and wages recorded to the program. Views of responsible officials and planned corrective actions: Management agrees with this finding and will review time certifications in comparison to salaries and wages recorded to federal programs. See 2024-005 for management's detailed action plan surrounding the time certification findings.
Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.430 requires charges to federal awards for compensation must be based on records that accurately reflect the work performed. Condition: 2 out of a total of 11 employees’ compensation and benefits charged to the federal award for the fiscal year were not supported by time and effort documentation. 13 out of the total 43 quarterly compensation and benefits charged were greater than the amount supported by the time and effort documentation. A total of $278,803 of personnel and fringe were charged to the federal award. Cause: Budgeted amounts were used, but no system of review and adjustments to actual were performed. A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Questioned Costs: $21,249 for the compensation costs and related employee benefits charged for the 2 employees that were not supported by time and effort documentation. $20,472 for the 13 quarterly compensation and related benefits that were greater than the time and effort documentation supported. Context: For the audit all employees whose compensation and benefits were charged to the federal award retroactively provided signed quarterly time and effort documentation. These documentations were reviewed and approved by their supervisors. Auditor viewed all 11 employees quarterly time and effort documentation. While there were 13 quarterly compensation and benefits charges that were greater than the amount supported, there were 14 quarterly compensation and benefits that were undercharged by $35,871. Repeat Finding: No Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.
Assistance Listing Number(s): 84.425V Name of Federal Program or Cluster: COVID-19 Education Stabilization Fund (ESF), American Rescue Plan – Emergency Assistance to Non-Public Schools (ARP EANS) Name of Federal Agency: Department of Education Federal Award Identification Number: S425V210042 Federal Award Date: February 26, 2021 and September 24, 2021 Name of Pass-through Entity: State of North Carolina Pass-through Entity Identifying Number: 60-04 and 60-05 Award Period: July 1, 2022 through September 30, 2023 and July 1, 2022 through September 30, 2024 Criteria: Uniform Guidance 2 CFR 200.430 requires charges to federal awards for compensation must be based on records that accurately reflect the work performed. Condition: 2 out of a total of 11 employees’ compensation and benefits charged to the federal award for the fiscal year were not supported by time and effort documentation. 13 out of the total 43 quarterly compensation and benefits charged were greater than the amount supported by the time and effort documentation. A total of $278,803 of personnel and fringe were charged to the federal award. Cause: Budgeted amounts were used, but no system of review and adjustments to actual were performed. A written policy and procedures over documenting time and effort was not designed and implemented. Effect or Potential Effect: Unsupported compensation and benefits charged to the program may be disallowed. Questioned Costs: $21,249 for the compensation costs and related employee benefits charged for the 2 employees that were not supported by time and effort documentation. $20,472 for the 13 quarterly compensation and related benefits that were greater than the time and effort documentation supported. Context: For the audit all employees whose compensation and benefits were charged to the federal award retroactively provided signed quarterly time and effort documentation. These documentations were reviewed and approved by their supervisors. Auditor viewed all 11 employees quarterly time and effort documentation. While there were 13 quarterly compensation and benefits charges that were greater than the amount supported, there were 14 quarterly compensation and benefits that were undercharged by $35,871. Repeat Finding: No Recommendation: Time and effort documentation be documented per Uniform Guidance requirements and used to review and adjust budgeted compensation and benefit costs charged to the award to be accurate, allowable, and properly allocated. Written policies and procedures should be designed and implemented for documentation of time and effort. Views of Responsible Officials: The organization agrees with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
Reference Number: 2024-013 Prior Year Finding: 2023-010 Federal Agency: U.S. Department of Labor State Agency: Executive Office of Labor and Workforce Development Federal Program: WIOA Cluster Assistance Listing Number: 17.258, 17.259, 17.278 Award Number and Year: 24A55AY000057 (4/1/2024 – 6/30/2027), 23A55AY000020 (4/1/2023 – 6/30/2026), 23A55AT000036 (7/1/2023 – 6/30/2026), 23A55AW000048 (7/1/2023 – 6/30/2026), AA-38535-22-55-A-25 (7/1/2022 – 6/30/2025), AA-36325-21-55-A-25 (4/1/2021 – 6/30/2024) Compliance Requirement: Allowable Costs/Cost Principles – Time and Effort Reporting Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the non-Federal entity consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is determined and supported as provided in paragraph (i) of this section, Standards for Documentation of Personnel Expenses, when applicable. Per 2 CFR § 200.430 (i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, • Be incorporated into the official records of the non-Federal entity, • Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, • Encompass both federally assisted, and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy, • Comply with the established accounting policies and practices of the non-Federal entity, • Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: The Executive Office of Labor and Workforce Development (the Department) charged budgeted personnel costs to the program instead of actual costs due to errors coding employee timesheets. Context: Combination codes are used by employees to allocate and certify hours worked to Federal grants and employees’ supervisors are required to perform a line-item review of hours spent on each grant before approving timesheets. If a timesheet is approved without the use of combination codes, the system defaults to budgeted grant allocations entered into the Labor Cost Management (LCM) module of the Massachusetts Management Accounting and Reporting System (MMARS). Three of sixty employee timesheets selected for testing did not use combination codes and the employee’s time was defaulted to a budgeted grant allocation. This resulted in the amount charged to the program being based on budgeted allocation and not based on the employee’s actual time and effort on the program. Cause: The Department’s controls were not operating effectively to ensure that time and effort reporting was performed in accordance with federal requirements. Effect: Noncompliance occurred as payroll charges allocated to the grants were not reflective of actual activity for which the employees were compensated. Questioned costs: Undetermined amount related to budgeted combination codes. Recommendation: The Department should update its procedures and controls and perform additional training over time and effort reporting to ensure that payroll costs charged to the program are based on actual time and effort and a combination code that is allowable under the program. The Department should not seek federal reimbursement unless it can substantiate that the time and effort was dedicated to the federal program. Views of Responsible Officials: There is no disagreement with the finding.
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles U.S. Department of Education Passed through NYS Department of Education Program Name: Education Stabilization Fund AL#: 84.425U Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year. Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; b) Be incorporated into the official records of the non-Federal entity; c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; d) Encompass both federally assisted and all other activities compensated by the non-Federal entity; e) Support the distribution of the employee’s salary or wages amount 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. Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024. Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed. Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs. Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent. View of Responsible Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .