Finding 1100832 (2024-002)

Finding 2024-002: Improper Controls over Personnel Expenses Federal Agency: U.S. Department of Treasury Program Name: COVID-19: Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: 21.027 Award Year: June 1, 2023 – May 31, 2024 Program Expenditures: $1,119,206 Questioned Costs: None Criteria: Uniform Grant Guidance (2 CFR 200.430(g)(1)(i)) states 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Uniform Grant Guidance (2 CFR 200.303) requires nonfederal entities receiving Federal awards establish and maintain internal controls designed to reasonably ensure compliance with Federal laws, regulations, and program compliance requirements. Effective internal controls should include procedures to ensure personnel activity reports are approved. Condition: A KHSU supervisor did not properly document approval for one employee’s personnel activity reports. Cause: KHSU officials stated that this issue was an isolated incident resulting from an unintentional oversight at multiple levels of approval. While established procedures generally ensure proper documentation of personnel activity reports, in this case, the required documentation was inadvertently missed during the review and approval process. Effect: If employee’s personnel activity reports are not properly reviewed and approved, KHSU could submit unallowable costs for the program. Questioned Costs: None Context: Of the 8 employee personnel activity reports sampled, one report did not contain the proper approval by a KHSU supervisor. Repeat Finding: No. Recommendation: We recommend KHSU strengthen internal controls around the approval of personnel activity reports to confirm that a reasonable person can confirm the control occurred. Views of Responsible Officials: Management agrees with the finding. Please see corrective action plan attached.