Finding Text
Criteria: 2 CFR 200.430(i) indicates costs must be based on records that accurately reflect the work performed to be considered allowable. 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 and Context: We selected 4 months of payroll expense charged to the grant for testing during the audit and noted that each month had at least one employee who did not have detailed time sheets or time studies to adequately support the hours charged to the grant. Our sample covered 7 employees over these 4 months and 3 of the employees tested did not have adequate support for the time charged. We tested a total of $33,351 of claimed payroll cost and identified known questioned costs of $3,770 which resulted in likely questioned costs of $5,308 using an error rate of 11% over total payroll claimed for 2023 of $46,955. Our sample was not considered to be a statistically valid sample.
This finding is a repeat finding of 2022-002.
Cause and Effect: The lack of adequate documentation to support time charged to the federal award combined with the finding 2023-003 resulted in material noncompliance to the referenced compliance requirements and to the program as a whole.
Recommendation: We recommend the Association implement procedures for all employees who have payroll claimed under federal programs to prepare detailed timecards or time studies to support the distribution of each employee's compensation among specific activities, including the allocation of compensation to federal awards. These records should be reviewed by the employee's supervisor for accuracy.
Views of Responsible Officials and Planned Corrective Actions: The Association agrees with the finding and plans to implement their corrective action during October 2024.