Finding 1105555 (2024-002)

Federal Program Name ACL Independent Living State Grants-ACL Title VII-Chapter 1, Part B CFDA # 93.369 Federal Agency Department of Human Services Criteria The Organization is responsible for ensuring all grant expense allocations are in accordance with the set cost allocation policy. Condition Instance 1: Timesheet was filled out incorrectly by an employee and was also approved by management. Instance 2: Entire asset costs were allocated to grant. Context Instance 1: Payroll is allocated based on employee hours worked on each grant. Some employees do not work on grant specific items so their time is recorded elsewhere. Instance 2: Property and equipment should be allocated to the grant through depreciation expense. Questioned Costs Instance 1: We believe this to be a one-time error. All other payroll allocations sampled were allocated correctly. The questioned costs for this occurrence is $600. Instance 2: Four assets were capitalized and allocated to the grant during the year for a total of $13,943. Cause Instance 1: Employee did not properly know how to record time and the error was overlooked by management. Instance 2: The internal cost allocation policy was not consistent with federal guidelines for property and equipment grant expenditures.Effect Instance 1: Incorrect allocation of payroll expense to grant. Instance 2: Cost allocation policy was not followed by management. Recommendation Instance 1: We recommend that employees are trained to properly fill out timesheets and that management goes through a more detailed approval process when approving timesheets. Instance 2: We recommend that management update the Organization’s cost allocation policy. Management’s Response Management agrees with the finding and will take steps to update the Organization’s cost allocation policy to match federal regulations.