Finding 1080001 (2023-003)

Finding No. 2023-003: Twenty-First Century Community Learning Centers Grant Claim Support (Federal Assistance # 84.287) Type of Finding: Significant Deficiency in Internal Control over Major Programs Criteria: Uniform Guidance indicates that that standards for documentation of personnel expenses are such that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: The Boys and Girls Club of Livingston County (the Organization) remits a variety of expense reimbursements to various agencies. We tested 26 bi-weekly timesheets and paystubs from 22 employees for the 12-month award period. We noted that for 5 employees the hourly rate during the 12-month period was incorrect. The Organization used the overtime rate instead of the base rate when calculating total wages. This caused a net discrepancy of $17,563 of total wages during the 12-month award period. We also noted that for one salaried employee the total wages for the 12-month period differed by $6,308. Cause: The Organization functions with a small number of office personnel therefore, the Organization is unable to have a review of the requested reimbursement performed. Effect: A lack of segregation of duties increases the risk that errors or fraud may occur and not be prevented or detected on a timely basis. Questioned Costs: None Repeat Finding: No Recommendation: We recommend the Organization implement a policy to have an employee review the requested reimbursements and corresponding receipts to ensure they agree. Management Response: As a small organization, with limited staffing, it was noted that the numbers were transposed when entered and the hourly rates were taken from the Payroll Report versus the paystub. Going forward with the CFO in place, all wages will be reported on-a-monthly basis utilized by the paystubs noting the wage rate changed. Noting that each grant has its own reporting requirements, the organization will provide a three-step verification that will include providing the CPA with the final verification of the monthly reports.