Finding 1143816 (2024-002)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-06-26

AI Summary

  • Core Issue: Payroll costs were charged based on budget estimates rather than actual employee time, violating federal guidelines.
  • Impacted Requirements: Compliance with Uniform Guidance (2 CFR 200.430) regarding accurate payroll records and necessary reconciliations.
  • Recommended Follow-up: Revise timekeeping processes to ensure payroll accurately reflects work performed and reconcile estimates with actual time regularly.

Finding Text

Finding 2024-002 – Allowable costs – payroll Assistance Listing #: 93.243 Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated. The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time. Condition: During fiscal year 2024, the Organization charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs. Cause: Management was made aware that using budget estimates was not allowed without further reconciliation against actual time or effort activities during the fiscal year 2022 audit which was completed in April 2024. Management has not yet implemented changes to its internal processes to address the identified issue. Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort. Questioned Costs: N/A Repeat Finding: Yes Recommendation: We recommend the Organization make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis. Response: The Organization is acting upon different guidance it has received. As of the date this audit is released, the contract this finding addresses is currently scheduled to end on 08/30/2025. NFFCMH will continue our current practice through the end of the current contract, and will review any potential change to same with any renewal of this contract.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 567371 2024-001
    Significant Deficiency Repeat
  • 567372 2024-002
    Significant Deficiency Repeat
  • 567373 2024-001
    Significant Deficiency Repeat
  • 567374 2024-002
    Significant Deficiency Repeat
  • 1143813 2024-001
    Significant Deficiency Repeat
  • 1143814 2024-002
    Significant Deficiency Repeat
  • 1143815 2024-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $104,622