Finding Text
Finding 2024-011 – B. Allowable Costs/Cost Principles
Information on Federal Program(s) – Research and Development Cluster (ALN 43.009, ALN 93.859)
Criteria or Specific Requirement - 2 CFR §200.430(i)(1)(i) indicates that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, 2 CFR §200 requires that costs charged to programs are adequately documented.
Condition – The summary level hourly documentation retained for payroll expenditures charged to the program was not formally supported with an adequate system of internal controls. Additionally, for certain non-payroll expenditures selected for testing, the University was unable to provide documentation adequately supporting the amount charged to the federal award.
Cause - Administrative oversight and insufficient internal controls.
Effect or Potential Effect – Noncompliance with documentation of personnel expense standards.
Questioned Costs – Below reportable threshold.
Context – Context is as follows:
Expenditures: For 7 of 8 employees tested, the summary level hourly documentation retained was not formally supported with an adequate system of internal controls.
Indication of Repeat Finding - This is a repeat of prior year Finding 2023-013.
Recommendation – We recommend that the University enhance its internal controls over compliance to ensure that time and effort records are appropriately maintained.
Views of Responsible Officials – The University acknowledges that the records to substantiate the payroll costs were insufficient and lacking internal controls. Going forward the University plans to implement a strategic process to document time and effort associated with research and development cluster and it’s federal grants. All employees that work with the Challenger Learning Center will continue to have their hours worked documented in the Paycom payroll software. Payroll is processed on a biweekly basis, and therefore on biweekly basis the payroll costs from the Challenger Learning Center will be reimbursed to the University from the various Challenger Learning Center bank accounts. This will be done as a percentage of time worked for the NIH Grant, the NASA Grant, and the general Challenger Learning Center functions.