Finding Text
2024-002
Federal Agency - Department of Agriculture
Federal Program Title - Partnerships for Climate-Smart Commodities
Assistance Listing Number - 10.937
Federal Award Identification Number - NR233A750004G023
Award Period - 10/1/23 - 9/30/24
Type of Finding - Significant Deficiency in Internal Control over Compliance; Compliance, Other Matters
Condition - NSPA does not have adequate procedures in place regarding timesheets and allocation of payroll costs to ensure USDA federal funds were not spent on disallowed costs.
Criteria - Uniform Guidance requires nonfederal entities receiving federal awards to establish and maintain internal controls designed to ensure compliance with federal laws, regulations, and program compliance requirements. Expenditures of federal awards should be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles.
Questioned Costs - N/A
Context - During testing, we were unable to locate timesheets to determine appropriate allocation of time spent towards the federal award. Additionally, payroll allocations could not be verified back to the budget submitted for the federal award.
Cause - NSPA does not have an effective controls in place to ensure payroll transactions are properly coded between federal and nonfederal funds.
Effect - Failure to properly record federal and nonfederal funds may result in inaccurate reporting of disallowed costs on the Schedule of Expenditures of Federal Awards.
Recommendation - We recommend that NSPA implement policies and procedures to ensure controls are in place to properly allocate payroll costs to federal awards.
Views of Responsible Officials - Management agrees with the finding and has developed a plan to correct the finding.