Finding Text
2 CFR § 3474.1 gives regulatory effect to the Department of Education for 2 CFR § 200.430 which states, in part, that costs of compensation are allowable to the extent that they satisfy the specific requirements of this part, and that the total compensation for individual employees is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both Federal and non-Federal activities. In addition, 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 which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; be incorporated into the official records of the non-Federal entity; reasonably reflect the total activity for which the employee is compensated by the non-Federal entity; and support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award, a Federal award and non-Federal award, an indirect cost activity and a direct cost activity, two or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity.
Service Center Policy 6116 for Time and Effort Reporting indicates the reports should support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award, a Federal award and non-Federal award, an indirect and direct cost activity, two or more indirect activities which are allocated using different allocation bases, or an unallowable activity and a direct or indirect cost activity. The payroll office is responsible for the distribution, collection, and retention of all employee time and effort reports.
The Service Center did not follow policy 6116 relating to time and effort resulting in the following errors:
• The wages and related benefits for four out of 40 employee payroll checks tested totaling $2,569 were charged to the Special Education Grant Fund without any time and effort documentation. Semi-Annual Certifications, Personnel Activity Reports (PARs), or a Substitute System were not maintained to support the amount of time worked on the grant. Therefore, we consider the wages and related benefits for these employees in the amount of $2,569 to be questioned costs.
Failure to maintain the appropriate time and effort documentation could lead to future questioned costs, reduced future federal funding, and the requirement to repay the Ohio Department of Education and Workforce.
The Service Center should ensure all employees charging wages and benefits to federal grants maintain the appropriate documentation supporting the time spent on the grant, in accordance with the Service Center’s policy. Appropriate supporting documentation could include semi-annual certifications for employees working solely on a single cost objective or personal activity reports or timesheets with sufficient detail when an employee works on multiple activities.