Finding Text
Federal Program Titles – Substance Abuse and Mental Health Services Projects of Regional and National
Significance
Assistance Listing No. – 93.243
Federal Agencies – U.S. Department of Health and Human Services
Federal Award Numbers – S23-SM84816-027
Grant Award Periods – April 1, 2023 – September 29, 2023
Compliance Requirements – Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Criteria:
Costs of compensation are allowable to the extent that they satisfy the specific requirements of 2
CFR 200.430, and that the total compensation for individual employees:
(1) Is reasonable for the services rendered and conforms to the established written policy of the
non-federal entity consistently applied to both federal and non-federal activities;
(2) Follows an appointment made in accordance with entity’s laws and/or rules or written policies and
meets the requirements of federal statute, where applicable; and
(3) Is determined and supported (documented) as provided in 2 CFR 200.430 (i), when applicable.
Charges to federal awards for salaries and wages must be based on records that accurately reflect the
work performed. Among other things, these records must:
• Reasonably reflect the total activity for which the employee is compensated by the non-federal entity,
not exceeding 100% of compensated activities. – 2 CFR 200.430(i)(1)(iii)
• Comply with the established accounting policies and practices of the non-federal entity. – 2
CFR 200.430(i)(1)(v)
• Support the distribution of the employee’s salary or wages among specific activities or cost objectives if
the employee works on more than one federal award; a federal award and non-federal award; an
indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using
different allocation bases; or an unallowable activity and a direct or indirect cost activity. – 2
CFR 200.430(i)(1)(vii)Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that:
– The system for establishing the estimates produces reasonable approximations of the activity
actually performed;
– Significant changes in the corresponding work activity (as defined by the non-Federal entity’s
written policies) are identified and entered into the records in a timely manner. Short term (such as
one or two months) fluctuation between workload categories need not be considered as long as the
distribution of salaries and wages is reasonable over the longer term; and
– The non-Federal entity’s system of internal controls includes processes to review after-the-fact
interim charges made to a Federal award based on budget estimates. All necessary adjustment
must be made such that the final amount charged to the Federal award is accurate, allowable, and
properly allocated.
Conditions Found:
Compensation charges were charged to ALN 93.243, and included $828,602 of salaries and fringes that
were allocated to the grant based on budget estimates to time spent by the employees. Boys Town has
policies that require a certification process to affirm after-the-fact the allocation based on budget estimates
were appropriate or require adjustment in the accounting records. Boys Town policies require effort reports
for monthly, quarterly, and annual time periods. Completion and certification must occur no later than
60 days from the end of the time period that is being certified.
On January 1, 2023, Boys Town implemented a new enterprise resource planning system, Workday, which
included human resources and payroll processing. Workday has an effort reporting business process built
into its functionality. However, since the implementation of Workday, no certifications have been performed.
As part of monthly invoicing to grantor under ALN 93.243, details of employees and their percentage of
time allocated is included in the invoicing package. This monthly invoice is reviewed by program manager.
Questioned Cost:
Question costs is not determinable.
Cause and Effect:
In discussing these conditions with Boys Town management, there were issues with the system
implementation that required re-allocation of payroll that were not finalized until March 2024. This led to
delays in initiating the effort certification process in Workday to ensure accurate information could be
certified.
Repeat Finding:
A similar finding was not reported in prior year audit.
Statistical Sampling:
The sample was not intended to be, and was not, a statistically valid sample.
Recommendations:
We recommend Boys Town to enhance its internal control process to ensure Boys Town has effective
internal controls in place to ensure Boys Town is complying with internal policies and obtaining
after-the-fact affirmations for compensation allocated to federal awards.
View of Responsible Official:
We agree with the conclusions in the finding. Management has already taken corrective action to
retroactively obtain certifications for time and effort for the year ended December 31, 2023 and through
September 30, 2024. In addition, a process has been implemented to allow certifications to occur in
accordance with our policies for the remainder of the fiscal year.