Finding Text
Finding No. UG-2024-001 – Lack of Timesheets for Employees Federal Agencies, Programs, and Assistance Listing Numbers: • U.S. Department of Agriculture: Agricultural Marketing Service: • Regional Food Business Centers (Assistance Listing No. 10.186) Criteria – Per Title 2 CFR 200.430(i), charges to federal awards for labor costs must be based on records that accurately reflect the work performed. These records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Be incorporated into the official records of the non-Federal entity. • Reasonably reflect the total activity for which the employee is compensated. • Support the distribution of employees’ labor costs among specific activities or cost objectives. • Include budget estimates only as interim accounting devices, provided that actual work performed is subsequently verified. Condition – The Organization does not maintain timesheets or other records to document hours worked or labor cost allocations. Labor charges are recorded monthly based on budgeted amounts. Cause – The Organization has not implemented a timekeeping system or alternative time documentation for its employees. Payroll costs are charged based on budgeted amounts, which are not subsequently adjusted to reflect actual activities performed. Effect – The Organization cannot substantiate labor costs or demonstrate accurate allocation of labor costs charged to the program. Questioned Costs – Unknown. Recommendation – We recommend that the Organization implement a system for tracking time and effort that meets the requirements of Title 2 CFR 200.430. This system should include: • Detailed timesheets or activity reports for employees whose labor costs are charged to federal awards. • Supervisory review and approval of time records. • Procedures for reconciling budgeted labor charges to actual time worked. Views of Responsible Official(s) and Planned Corrective Action – See Corrective Action Plan on page 36.