Finding Text
Significant Deficiencies
2024-001. Payroll (Allowable Costs/Cost Principles)
United States Department of Education, Passed-through New York State Department of Education:
Special Education Cluster:
Special Education Grants to States ALN: 84.027
Criteria: Salaries and wages charged to Federal awards must be supported by documentation prescribed by the Uniform Guidance at Subpart I, 2 CFR §200.430.
Condition: Subpart I, 2 CFR §200.430 of the Uniform Guidance requires that charges to “Federal awards for salaries and wages must be based on records that accurately reflect the performed. The documentation should support the distribution of the employee’s compensation among specific activities if the employees work on more than one Federal award, or a Federal award and non-Federal award. The preparation of personnel activation reports (PAR) or periodic certifications or the equivalent is the most effective way to comply with this requirement. During the current year, it was noted that in some instances, the District’s payroll verification forms were either not reviewed or signed by either the employer and employee, and they did not accurately reflect the actual allocation that was charged to the grant in order to comply with Subpart I, 2 CFR §200.430.
Cause: Employee PAR forms should accurately reflect time and effort, as described in Subpart I, 2 CFR §200.430, to support salaries, and other forms of compensation charged to a federal program. During our audit testing, we noted that some of the District’s payroll verification forms did not indicate the correct amount or percentage allocation for the employee that was charged to the grant, and there were some instances where the District’s payroll verification forms were not signed off by either the employer or employee. See Context below for more specifics.
Effect: Noncompliance could result in the incorrect amount for services rendered being charged to the Federal awards.
Questioned Costs: None reported.
Context: For the Special Education Cluster, based on a sample of seven (7) employees, we noted that all seven (7) employee payroll verification forms did not accurately reflect the amount charged to the grant, and in two (2) instances we noted the employee payroll verification forms were not signed by either the employer or employee.
Recommendation: The District should prepare and maintain the appropriate documentation to support salaries and wages charged to Federal awards in accordance with the requirements of the Uniform Guidance at Subpart I, 2 CFR §200.430. In addition, the District must ensure that all payroll verification forms are properly signed by both the employer and the employee.
Views of Responsible Officials of Auditee: The District acknowledges the finding and will thoroughly review and maintain the federal personnel activity reports to ensure each employee’s salary, or other forms of compensation, are properly approved and signed off by both the employer and employee. Additionally, the District will ensure that the amount charged to the grant corresponds to the federal program to which the employees’ earnings were allocated, based on time and effort, in compliance with Subpart I, 2 CFR §200.430.