Finding Text
2024-005 Compliance and Significant Deficiency in Internal Control over compliance with Activities Allowed or Unallowed, Allowable Cost/Cost Principles
U.S. Department of Education
Passed through NYS Department of Education
Program Name: Education Stabilization Fund
AL#: 84.425U
Condition: Time and effort documentation requirements in accordance with 2CFR 200.430(i) Compensation – Personal Services, Standards for Documentation were not being followed for the first 9 months of the fiscal year.
Criteria: According to 2 CFR, Part 430(i)(l) of the Office of Management and Budget’s Uniform Grant Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things:
a) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
b) Be incorporated into the official records of the non-Federal entity;
c) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity;
d) Encompass both federally assisted and all other activities compensated by the non-Federal entity;
e) Support the distribution of the employee’s salary or wages amount 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.
Context: We reviewed the files maintained by the district for the fiscal year and found that the certification process had not been done until May 2024.
Cause: The District did not have sufficient internal controls in place to ensure that the payroll certification process was being performed.
Effect: Without adequate internal controls over the employee’s time being charged to the grant and the certification requirement, the School District cannot ensure that federal funds are paid in accordance with allowable costs and the time worked in the grant. Additionally, they cannot easily monitor the amount of funds that can be charged to the grant for salaries and benefits. .The District is not in compliance with the requirements of the Education Stabilization Fund program with respect to Activities Allowed or Unallowed and Allowable Costs.
Questioned Costs: Support for the employees’ whose time was charged to the Federal award programs in question was reviewed and it was determined that for all employees the time being charged to the grant was appropriate, therefore, there were no questioned costs. Recommendation: We recommend that the District’s written procedures addressing internal controls with respect to program requirements be followed to ensure the District is in compliance at all times. We recommend that the District ensures that the employees working in the grants are certifying their actual percent of time and effort that is being spent working in the federal award programs by all employees whose time is charged to the grant and that they are completed timely after the fact. Monthly certifications should be completed if less than 100% of time is being worked in the federal award program or semiannually if 100% of time is being spent.
View of Responsible
Officials: Highland Falls-Fort Montgomery Central School District’s management concurs with this finding. The District is in the process of implementing procedures to ensure that compliance is maintained in the future. Please refer to the corrective action plan .