Finding 1073502 (2022-007)

Material Weakness
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2024-09-17
Audit: 319773
Organization: Disability Empowerment Center (WA)

AI Summary

  • Core Issue: There is a material weakness in internal controls over payroll disbursements, leading to unreliable employee time allocations.
  • Impacted Requirements: The agency did not maintain effective internal controls as required by 2 CFR 200.303, risking reimbursement for unallowable costs.
  • Recommended Follow-Up: Implement timely employee time tracking, regular reviews of timesheets, and have a second individual verify payroll allocations for accuracy.

Finding Text

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: ACL Centers for Independent Living Assistance Listing Number: 93.432 Federal Award Identification Number and Year: 2004WAILC3 - 2021 2006WAILC3 - 2021 2104WAILCL - 2022 2106WAILCL - 2022" Pass-Through Agency: N/A Pass-Through Number(s): N/A Award Period: 2004WAILC3 - 4/1/2020-9/30/22 2006WAILC3 - 4/1/20-9/30/22 2104WAILCL - 9/30/21-9/29/23 2106WAILCL - 9/30/21-9/29/23" Type of Finding: Allowable Activities and Allowable Costs - Payroll Disbursements • Material Weakness in Internal Control over Compliance Criteria or specific requirement: Per 2 CFR 200.303, non-Federal entities 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 statues regulations, and the terms and conditions of the Federal award.” Condition: Payroll allocation review is performed annually by ED, which is not timely enough to accurately reflect employee's time worked. Additionally, the allocation performed had logical errors, including one employees time missing from the allocation calculation, and using an inappropriate allocation basis. Questioned costs: None Context: All employees included in selection deemed to work positions that are allowable to the program, however the client allocation process unreliable for all sections tested (25). Cause: Allocations to program based on one employee's memory (ED) for full-year organizational operations. Allocations not reviewed for accuracy by other individual. Effect: Currently, all assigned work activities employees engage in are theoretically allowable under the program, however if an employee were to work projects that are not allowable under the Federal award, reimbursement requests could be made for unallowable costs. Repeat Finding: No Recommendation: 1) Have employees enter time by time period and ensure time codes reflect type of activities worked that tie to Federal program allocations. 2) Have ED review employee timesheets each pay period. 3) Review allocations by program each pay period. 4) Have second individual (contract accountant) review allocations to ensure accuracy and completeness. Views of responsible officials: There is no disagreement with the audit finding.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 497053 2022-004
    Material Weakness
  • 497054 2022-005
    Material Weakness
  • 497055 2022-006
    Significant Deficiency
  • 497056 2022-007
    Material Weakness
  • 497057 2022-004
    Material Weakness
  • 497058 2022-005
    Material Weakness
  • 497059 2022-006
    Significant Deficiency
  • 497060 2022-007
    Material Weakness
  • 497061 2022-004
    Material Weakness
  • 497062 2022-005
    Material Weakness
  • 497063 2022-006
    Significant Deficiency
  • 497064 2022-007
    Material Weakness
  • 497065 2022-004
    Material Weakness
  • 497066 2022-005
    Material Weakness
  • 497067 2022-006
    Significant Deficiency
  • 497068 2022-007
    Material Weakness
  • 1073495 2022-004
    Material Weakness
  • 1073496 2022-005
    Material Weakness
  • 1073497 2022-006
    Significant Deficiency
  • 1073498 2022-007
    Material Weakness
  • 1073499 2022-004
    Material Weakness
  • 1073500 2022-005
    Material Weakness
  • 1073501 2022-006
    Significant Deficiency
  • 1073503 2022-004
    Material Weakness
  • 1073504 2022-005
    Material Weakness
  • 1073505 2022-006
    Significant Deficiency
  • 1073506 2022-007
    Material Weakness
  • 1073507 2022-004
    Material Weakness
  • 1073508 2022-005
    Material Weakness
  • 1073509 2022-006
    Significant Deficiency
  • 1073510 2022-007
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.432 Acl Centers for Independent Living $233,856
93.369 Acl Independent Living State Grants $120,470