Finding Text
Federal Agencies: U.S. Department of Health and Human Services and U.S. Department of Labor
Federal Program Names: Block Grants for Community Mental Health Services and WIOA Adult Program
Assistance Listing Numbers: 93.958 and 17.258
Pass-Through Agencies: Illinois Department of Human Services and Chicago Cook Workforce Partnership
Pass-Through Numbers: 45CBB00060; 2021-2135 and 2022-2135
Award Period: July 1, 2023 through June 30, 2024; October 1, 2022 through September 30, 2023; October 1, 2023 through September 30, 2024
Type of Finding:
Other Matters
Material Weakness in Internal Control over Compliance
Criteria or Specific Requirement: Uniform Guidance section 200.430(h)(8)(i) indicates that the standards for documentation of personnel expenses are such that (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:(i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;(ii) Be incorporated into the official records of the non-Federal entity and (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities. Furthermore, subsection (viii) indicates: Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that:(A) The system for establishing the estimates produces reasonable approximations of the activity actually performed;(B) Significant changes in the corresponding work activity are identified and entered into the records in a timely manner and (C) The non-Federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal awards based on budget estimates.
Condition: The Agency is allocating payroll costs to grants based upon budgeted amounts/percentages submitted to the funding agency and does not currently have a system for ensuring that the estimates used produce reasonable approximations of the activity actually performed.
Questioned Costs: None
Context: This condition occurred in all 47 transactions selected for testing and represented 14 different employees.
Cause: Procedures for the allocation of employee time in full compliance with the Uniform Guidance have not yet been fully implemented.
Effect: Inaccurate payroll costs may be charged to federal programs if the Agency does not have procedures in place to monitor and record employee time devoted to federal programs.
Repeat Finding: This finding is a repeat of finding 2023-003.
Recommendation: Management should develop a process whereby payroll costs allocated to federal grants; are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee’s wages among specific activities or cost objectives if the employee woks on more than one federally funded program.
Views of Responsible Officials: There is no disagreement with this finding.