Finding Text
2024-001 Significant Deficiency in Internal Control and Compliance over Major Programs
Funding Agency: Department of Treasury
ALN: 21.027
Funding Agency: Department of Agriculture
ALNs: 10.565, 10.568 & 10.569
Criteria
Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated."
Condition
Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program and the Food Cluster Program.
Questioned costs
Total questioned cost of $2,822 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027). Total questioned cost of $3,475 based on three payroll transactions tested that were not approved at the appropriate level but were charged to the Food Cluster Program (ALNs 10.565, 10.568, & 10.569).
Context
During our payroll testing, of the six executive director timesheets tested, none of them indicated a review or approval from the board president.
Cause
The error was caused by not applying an adequate number of controls necessary for the executive director's timesheet.
Effect
The Coronavirus State and Local Recovery Funds program and Food Cluster program and other federal programs could be incorrectly charged with unreasonable wages.Repeat Finding
No.
Auditor's Recommendation
We recommend that the board president or other board member designee review the executive director's timesheet prior to submitting the wages for reimbursement from federal grants.