Finding Text
2023-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities and Matching (Material Weakness)
Federal Program Information:
Funding Agency: U.S. Department of Agriculture
FALN: 10.561
Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards.
Pass Through Entity: State of Georgia Department of Human Services
Award Year: 2021-2022, 2022-2023
Federal Program Information:
Funding Agency: U.S. Department of Housing and Urban Development
FALN: 14.231
Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards.
Pass Through Entity: Gwinnett County, Dekalb County, Cobb County, Fulton County
Award Year: 2021-2022, 2022-2023
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award.
Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner.
Condition: There are no compensation records to support the distribution of employees’ compensation who work on multiple Federal awards.
Effect: The lack of documentation and controls around how employees’ compensation is distributed between multiple Federal awards could result in the Association charging the same compensation to multiple awards.
Cause: The Association was not aware of the requirements to maintain this documentation.
Known Questioned Costs: $7,660 for FALN 10.561, $5,179 for FALN 14.231
Likely Questioned Costs: $63,347 for FALN 10.561, $26,971 for FALN 14.231
Perspective: This finding represents a systemic problem as it affects both the allowable activities and costs requirement as well as the matching requirement.
Repeat Finding: Yes, this is a repeat of 2022-002.
Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards.