Finding Text
Criteria: Under the Uniform Guidance requirements, to be allowable under Federal
awards, costs must meet the following criteria: 1) Necessary and reasonable, 2)
Consistent with policies and procedures, 3) Accorded consistent treatment and 4)
Adequately documented. Under the grant requirements, time and attendance records
must be maintained for salaries charged to the award and must specify the project and
be of sufficient detail to substantiate the claimed percentage of work performed in
support of the project.
Condition: During our testing of payroll expenditures, we noted Family Voices has
appropriate procedures in place to record an accurate estimate of allocated time
charged to the major program and to compare actual hours incurred working on the
program to the initial estimate recorded. However, management did not retain proper
documentation to substantiate the initial estimate recorded in comparison to the actual
hours incurred, including management’s determination that the estimate is reasonable.
Questioned Costs: None
Context: Fourteen of fourteen payroll transactions reviewed did not have proper
documentation.
Cause and Effect: Payroll expenditures are allocated to the program based on
estimates derived from program employees in advance. The accounting department
and the program directors meet to review the estimated time recorded at month end and
adjust expenditures charged to the program based on actual work performed on the
project. Supporting documentation was available, however, it did not support the
estimate to actual comparison.Auditors’ Recommendation: Establish payroll procedures to ensure transactions are
allocated based on actual hours worked on the program and all expenditures charged to
the program have adequate supporting documentation.
Management Response: The Organization in the years prior to Fiscal Year End 2023
were employing a time and attendance system that was in accordance with allowable
cost grant requirements, however, the process was unduly burdensome on the
organizations employees and the former finance director elected to change the process
from attestation of hours worked to the noted allocation of available funding. In realizing
that this method was not supporting the compliance of allowable cost grant
requirements, efforts were begun to revisit the salary allocation methods.