Finding Text
Finding 2023-001 - Controls Over Payroll Expenditures (Material Weakness)
Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria:
a)Be necessary and reasonable for the performance of the Federal award and be allocable thereto underthese principles.
b)Conform to any limitations or exclusions set forth in these principles or in the Federal award as to typesor amount of cost items.
c)Be consistent with policies and procedures that apply uniformly to both federally-financed and otheractivities of the non-Federal entity.
d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if anyother cost incurred for the same purpose in like circumstances has been allocated to the Federal award asan indirect cost.
e)Be determined in accordance with generally accepted accounting principles (GAAP), except, for stateand local governments and Indian tribes only, as otherwise provided for in this part.
f)Not be included as a cost or used to meet cost sharing or matching requirements of any other federallyfinanced program in either the current or a prior period.
g)Be adequately documented.
h)Cost must be incurred during the approved budget period.
Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award.
The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed.
Condition and Context: A summary of allowable charges for the grant was prepared for submission. Within a sample of 45, we noted that 25 timecards did not have a documented review.
Effect: Payroll expenditures could be inaccurately charged to the federal grant.
Cause: Management noted that time is tracked in a spreadsheet and is reviewed but formal documentation of review is not maintained. Questioned Costs: None Identification as a repeat finding, if applicable: This is a repeat finding. Appeared as finding 2022-002 in the prior report. Recommendation: We recommend the Corporation maintain documented approval of all timecards. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.