Finding Text
Department of Treasury
Federal Financial Assistance Listing 21.033, Award 22ERP060843
Community Development Financial Institutions Equitable Recovery Program (CDFI ERP)
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria: Meda’s internal control structure should be designed to properly follow the allocation
methodology for employees’ pay to each grant, in accordance with the policy established by the
Organization.
Condition: Meda has an internal control system designed to detect or prevent improper
allocation of employees pay to grants in a timely manner in accordance with their established
policy, but the controls did not operate as designed in certain instances. Sixteen of the forty-six
payroll lines tested did not have the correct payroll amounts allocated to the program.
Cause: Meda has a process for allocating employee wages based on hours worked, however
controls in place did not operate prevent errors in the allocation of employees’ pay to the
grants.
Effect: Employees had some of their pay allocated improperly and not in accordance with the
policy established.
Questioned Costs: None reported.
Context: A nonstatistical sample of forty-six payroll lines out of two hundred and five was
selected for testing, which accounted for $126,707 of $796,502 of federal program
expenditures.
Repeat Finding from Prior Years: No
Recommendation: We acknowledge the challenges Meda faced with allocating their payroll with
the current payroll provider and recommend that management work with a new payroll
provider to ensure payroll is accurately allocated to the grants.
Views of Responsible Officials: Management is not in agreement with the finding.