Finding Text
Allowable Costs U.S. Department of Health and Human Services Community Service Block Grant – ALN #93.569 Criterion:Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal Award.Costs must be necessary and reasonable for the performance of the Federal Award and allowable thereto under the principles in 2 CFR part 200, subpart E. Condition:Based upon our test work, we noted that the Time and Attendance Reports had no evidence of management approval for 47 out of a sample of 60 payroll expenditures charged to the CSBG program. In addition, 10 out of the 12 staff members whose wages were charged to the CSBG program did not have an annual Performance Appraisal completed.Cause and Effect:Management has processes in place to ensure that effective internal controls related to payroll costs charged to the federal program are properly implemented. The Organization’s documented policies and procedures (“Accounting Policies and Procedures Manual”, and “Human Resources Policies and Procedures Manual”) contains effective internal controls that were not utilized. Therefore, payroll costs charged to the federal program were not properly approved by management in accordance with 2 CFR part 200, subpart D & E.Questioned Cost:None. Recommendation:We recommend that management enforce their documented policies and procedures to ensure that payroll costs are properly approved.View of Responsible Officials:The Organization agrees with this finding and has developed a corrective action plan to address.