Finding Text
2021-006- Incorrect Payrates {SD, NC)
Federal Program Title:
Federal Catalog Number:
Federal Agency:
Pass-Through Entity:
Federal Award Number and Year:
Category of Finding:
Coronavirus Relief Fund
21.019
U.S. Department of the Treasury
CA Department of Finance
N/A-2021
Allowable Costs/Cost 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.
Condition: The City used incorrect payrates when calculating payroll costs charged to the program.
Cause: When the City calculated the Fire Department payroll and payroll costs related to Covid Leave,
they used a report that reflected payrates that were higher than what the payroll register reported.
Effect or Potential Effect: The City overstated the payroll costs charged to the program.
Questioned Cost: $32,314
Context: The exception was found in 10 out of 28 employees selected. The questioned cost is the
amount projected to the entire population.
Statistical Sampling Validity: Samples are haphazardly selected.
Repeat of a Prior-Year Finding: No
Recommendation: We recommend the City enhance procedures to double check the payrates used
when calculating charges to federal awards.
Management Response and Corrective Action Plan
City's Response: The City concurs with the recommendation.
Corrective Action Plan: The City has other eligible costs that were not claimed for this grant that
can be used to offset the questioned cost. Procedures are already in place to enhance payrate
calculations in the future.
Planned Implementation Date: Implemented as of April 2024
Responsible Person(s): City Controller