Finding 1056726 (2023-003)

Federal Agency: U.S. Department of Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP1643 - 2021 Award Period: March 3, 2021 through December 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: 2 CRF §200.430 (i) 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 which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: It was noted that the sheriff office accountant and officer in-charge of pulling the overtime reports and tracking this used average wages for all jail employees multiplied by specific overtime time codes to calculate the amount to be charged to the grant instead of trying to calculate the actual hours for the specific over-time codes times the actual rates for each individual employee. Also, originally, they just used this average base rate, but later realized the actual wages at time and a half for overtime were paid to the employees, so the average rate should have been 150% the average rate using their chosen method. Therefore, the County undercharged and under reported their jail overtime costs that were incurred due to COVID-19, but this was partially offset by some sheriff timekeeping software reporting issues that were doubling up the time for a few employees that used multiple overtime system codes on their timesheets. The issues with the hours and rates originally used were caught by the County after the fact in February of 2023, but, as the grant was undercharged, the County took no further action. The undercharging and under reporting from the above issue was also partially offset for differences reported because the pay of one individual was used to charge the time of another individual to the program for all of Quarter 3 of 2023. As controls did not originally catch the over statement of hours used and understatement of rates and there being a risk that the grant could have been overcharges. But there were no questioned costs, as the County actually could have charged more to the grant for these payroll costs. Questioned Costs: None Context: 3 of the 40 payroll disbursements selected for testing has the noted exceptions. Cause: The hours used were overstated due to a software issue. The pay rate used was too low due this being for overtime charged at 150% of the staff's base hourly rate, but the County accidentally just used the base hourly rate. The pay of one individual was used to charge the time of another individual to the program for all of Quarter 3, at a rate of 50%. Effect: Lack of proper procedures and controls related to payroll charged to the grant could result in inappropriate or inaccurate payroll expenditures being charged to the grant. Repeat Finding: Yes – 2022-003 Recommendation: We recommend that County management reviews the controls around payroll journal entries that are reclassifying payroll to federal grants to ensure the payroll that is being reclassified is supported and accurate and that such review continues to be formally documented. Views of Responsible Officials: There is no disagreement with the audit finding.