Finding Text
Significant Deficiency and Noncompliance over Allowable Costs/Costs Principles
Repeat Finding: No
Condition:
Management did not review and approve the time and effort allocation of employees working
under Federal grants.
Criteria:
In accordance with 2 CFR §200.430, the non-Federal entity may compensate for personal
services including all remuneration, paid currently or accrued, for services of employees
rendered during the period of performance under the Federal award, including but not necessarily
limited to wages and salaries. The costs of compensation are allowable to the extent that they
satisfy the specific requirements of this part.
Additionally, as defined in 2 CFR Ch. II (1-1-18 Edition) §200.430(g), for compensation to
members of nonprofit organizations, trustees, directors, associates, officers, or the immediate
families thereof, determination must be made that such compensation is reasonable for the actual
personal services rendered rather than a distribution of earnings in excess of costs. This may
include director’s and executive committee member’s fees, incentive awards, allowances for offsite
pay, incentive pay, location allowances, hardship pay, and cost-of-living differentials.
Cause:
Management did not review and approve the time and effort allocation of employees working
under federal grants.
Effect:
If the time and allocation efforts of employees working under federal grants were not reviewed
and approved in compliance with Uniform Guidance, the Foundation would not identify the
compensation allocation and billing to the federal grants for a reasonable amount.
Questioned Costs:
Unknown.
Recommendation:
We recommend that the Foundation review and approve the time and effort allocation of
employees working under federal grants to ensure proper tracking and billing for compensation
amount allowed per the federal award.
Auditee Response and Corrective Action Plan:
Refer to management’s corrective action plans.
Auditor’s Conclusion:
Finding remains as stated.