Finding 1096677 (2024-011)

2024 - 011 Allowable Activities and Costs/Cost Principles - Payroll Federal Agency: U.S. Department of Justice Federal Program Name: Public Safety Partnership and Community Policing Grants Assistance Listing Number: 16. 710 Federal Award Identification Number and Year: 2020ULWX0001 - 2020 Award Period: 7/1/2020 - 6/30/2024 Type of Finding • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: According to §200.303 Internal controls of 2 CFR Part 200, the recipient and subrecipient must establish, document, and maintain effective internal control over the federal award that provides reasonable assurance that the recipient or subrecipient is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. According to §200.403 Factors affecting allowability of costs of 2 CFR Part 200, costs must conform to any limitations or exclusions set forth in these principles or in the federal award as to types or amount of cost items. The FY 2020 COPS Hiring Program (CHP) award provides funding to law enforcement agencies to hire and/or rehire career law enforcement officers. Specific to the City, CHP funding is for forty new hires. According to the award, the City may only be reimbursed for the approved cost categories that are documented within the Financial Clearance Memorandum (FC:M). Condition: During our testing, we noted the City paid incentive pay with CHP funding. Also, we noted the City paid salaries and fringe benefits for four officers not listed in the Date of Hire - COPS Officer List with CHP funding. Questioned costs: $16,882.17 Context: During our testing, it was noted that the City paid incentive pay of $3,000.00 for the pay period end 12/01/2023. The FCM does not have a cost category for incentive pay. Also, it was noted that the City paid salaries and fringe benefits of $13,882.17 for four officers not listed in the Date of Hire - COPS Officer List provided to the federal agency. Cause: The City charged the incentive pay to the grant by mistake. The City transferred the four officers to the grant during its initial years. The City moved the original forty officers to the grant and transferred any officers off the grant back to their positions funded by the general fund. These officers should have been moved out. Effect: The auditor noted instances of noncompliance. Noncompliance results in potential pay back of federal funds. Recommendation: We recommend the City review costs charged to the grant to ensure the FCM has a cost category for the costs. We recommend the City review the officers charged to the grant to ensure they are listed in the he Date of Hire - COPS Officer List provided to the federal agency. For any questioned costs, we recommend the City work with the federal agency for resolution. Management Response: The City concurs with the finding. Albuquerque Police Department (APD) Grant Administrator will meet with the City Grant Administrator to review and prepare the necessary payroll corrections, ensuring that all payroll charges allocated to the grant are accurate. The APD Grant Administrator will be responsible for submitting correcting payroll reclassifications to the City's Grants Management Section for review, entry and approval no later than January 31, 2025. APD will work directly with the City's Grants Management Section to establish new reconciliation, reclassification and validation processes to ensure that only eligible officers and pay types are charged to the grant. Timeline and Responsible Position: January 2025 - APD Grant Administrator