Finding 1054750 (2021-004)

-
Requirement
B
Questioned Costs
-
Year
2021
Accepted
2024-07-11
Audit: 314981
Organization: City of Compton (CA)

AI Summary

  • Core Issue: An employee's timecard lacked documentation for hours worked on the Section 8 program, leading to potential inaccuracies in payroll cost distribution.
  • Impacted Requirements: Compliance with federal guidelines on compensation documentation and allocation of employee costs across multiple programs.
  • Recommended Follow-Up: The City should enhance procedures to retain all timecards and ensure they are accessible for audits, with an updated payroll policy to include supervisor signatures for any allocation changes.

Finding Text

2021-004- Distribution of Hours Worked (NC} Federal Program Title: Federal Catalog Number: Federal Agency: Pass-Through Entity: Federal Award Number and Year: Category of Finding: Section 8 Housing Choice Vouchers 14.871 U.S. Department of Housing and Urban Development Not applicable CA-071 - 2021 Allowable CosUCost Principles Criteria: Title 2, Subtitle A, Chapter II, Part 200, General Provisions for Selected Items of Cost, Section 200.430, Compensation - Personal Services requires that costs of compensation are allowable to the extent that they satisfy specific requirements which in include that the total compensation of individual employees is determined and supported as provided in the Standards for Documentation of Personnel Expenses. The said standards require charges to Federal awards for salaries and wages must be based on records that must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Federal award recipients should support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition: If an employee works on more than one program or fund, the employee's salary or wages and benefits are distributed by the City to the respective programs or funds based on the number of hours worked. The basis for the distribution is the employee's timecard. During our audit, we noted one employee's timecard did not indicate the number of hours worked for Section 8 or another program/fund, however only 10% of his/her payroll cost was charged to Section 8. Cause: The City was unable to provide the timecard that showed the hours worked by the employee by program/fund. Effect or Potential Effect: Over or understatement of payroll cost charged to the program. Questioned Cost: None. Context: One exception out of 20 sample items. Statistical Sampling Validity: Samples are haphazardly selected. Repeat of a Prior-Year Finding: No Recommendation: We recommend that the City improve procedures to ensure that they retain all timecards that reflect the distribution of costs to programs/funds and make them available for the auditors. Management Response and Corrective Action Plan City's Response: The City concurs with the recommendation. Corrective Action Plan: The payroll policy will be updated to require that timecards be updated with supervisor signature if changes are made to change allocation to another fund. Planned Implementation Date: June 30, 2024 Responsible Person(s): City Controller

Categories

Allowable Costs / Cost Principles HUD Housing Programs

Other Findings in this Audit

  • 478306 2021-002
    Material Weakness Repeat
  • 478307 2021-003
    Significant Deficiency
  • 478308 2021-004
    -
  • 478309 2021-005
    -
  • 478310 2021-007
    Significant Deficiency Repeat
  • 478311 2021-008
    Significant Deficiency
  • 478312 2021-006
    Significant Deficiency
  • 1054748 2021-002
    Material Weakness Repeat
  • 1054749 2021-003
    Significant Deficiency
  • 1054751 2021-005
    -
  • 1054752 2021-007
    Significant Deficiency Repeat
  • 1054753 2021-008
    Significant Deficiency
  • 1054754 2021-006
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
14.871 Section 8 Housing Choice Vouchers $8.70M
14.218 Community Development Block Grants/entitlement Grants $1.38M
21.019 Coronavirus Relief Fund (crf) $1.21M
14.248 Section 108 Loans Receivable - Balance at Beginning of Year $522,691
14.248 Section 108 Note Payable - Current Expenditures $506,125
14.871 Cares Act - Supplemental Housing Assistance Payment (hap) $300,953
16.034 Coronavirus Emergency Supplemental Funding Program $149,719
14.239 Home Investment Partnership Program $148,848
14.871 Cares Act -Supplemental Administative Fee Funding $67,493
14.218 Community Development Block Grants/disaster Recovery Grants (drgr) $4,420
14.218 Covid-19-Cdbg - Cv, Cares Act $4,068