FAC Explorer

Finding 1157171 (2024-003)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2024
Accepted
2025-09-30
Audit: 369477
Organization: Transition Resource Action Center (TX)
Auditor: Sutton Frost Cary

AI Summary

  • Core Issue: There is a material weakness in internal controls over payroll costs for federal and state grants, leading to inaccuracies in time and effort documentation.
  • Impacted Requirements: Compliance with 2 CFR §200.430 and TxGMS is at risk due to discrepancies between timecards, payroll registers, and grant charges.
  • Recommended Follow-Up: Management should enhance controls to ensure payroll charges align with documented time and effort before seeking grant reimbursements.

Finding Text

Finding 2024‐003: Allowable costs – Material weakness in internal controls over compliance and compliance finding. Continuum of Care Program ALN 14.267 Crime Victims Assistance ALN 16.575 Preparation for Adult Living HHS000705800003/ HHS000705500007 Criteria: Per 2 CFR §200.430 and the TxGMS, payroll costs charged to federal and state awards must be based on records that accurately reflect the work performed and must be supported by time and effort documentation. Charges to grants must be consistent with the actual distribution of time as documented by the employee. Additionally, expenditures charged to the grant must be supported by accurate accounting records, including alignment between timecards, payroll registers, and general ledger postings. Condition: During testing of payroll expenditures charged to both federal and state programs, the auditor noted that in 5 out of 160 transactions tested, the allocation percentages on the employee timecards did not reconcile to the payroll register and to the amount charged to the federal and state grant programs. Questioned Costs: None Cause: The exceptions resulted from delays in updating payroll/timekeeping systems and insufficient documentation to support allocation changes. Effect: Payroll expenditures did not accurately reconcile and align with actual time and effort records. This represents noncompliance with federal and state requirements and may result in disallowed costs. Recommendation: Management should implement controls to ensure amounts charged to the grants agree with timecards and payroll registers before requesting grant reimbursement. Management’s Response: See corrective action plan.

Corrective Action Plan

The exceptions resulted from delays in updating payroll/timekeeping systems and insufficient documentation to support allocation changes. To correct this, TRAC has implemented a Position Control Update process: any change to an employee’s grant allocation must be documented on a Position Control Update form, signed by the Finance Director, and entered into the payroll system within 5 business days of the change. Additionally, the Finance team performs monthly reconciliations between timecards, payroll registers, and the general ledger to ensure that payroll charges are accurate and properly supported before being billed to grants. Completion Date: October 1, 2025. Responsible Parties: Nicole Binkley, Chief Executive Officer Josh Runnels, Director of Finance and Operations

Categories

Allowable Costs / Cost Principles Cash Management Material Weakness

Other Findings in this Audit

  • 1157138 2024-001
    Material Weakness Repeat
  • 1157139 2024-002
    Material Weakness Repeat
  • 1157140 2024-003
    Material Weakness Repeat
  • 1157141 2024-001
    Material Weakness Repeat
  • 1157142 2024-002
    Material Weakness Repeat
  • 1157143 2024-003
    Material Weakness Repeat
  • 1157144 2024-001
    Material Weakness Repeat
  • 1157145 2024-002
    Material Weakness Repeat
  • 1157146 2024-003
    Material Weakness Repeat
  • 1157147 2024-001
    Material Weakness Repeat
  • 1157148 2024-002
    Material Weakness Repeat
  • 1157149 2024-003
    Material Weakness Repeat
  • 1157150 2024-001
    Material Weakness Repeat
  • 1157151 2024-002
    Material Weakness Repeat
  • 1157152 2024-003
    Material Weakness Repeat
  • 1157153 2024-001
    Material Weakness Repeat
  • 1157154 2024-002
    Material Weakness Repeat
  • 1157155 2024-003
    Material Weakness Repeat
  • 1157156 2024-001
    Material Weakness Repeat
  • 1157157 2024-002
    Material Weakness Repeat
  • 1157158 2024-003
    Material Weakness Repeat
  • 1157159 2024-001
    Material Weakness Repeat
  • 1157160 2024-002
    Material Weakness Repeat
  • 1157161 2024-003
    Material Weakness Repeat
  • 1157162 2024-001
    Material Weakness Repeat
  • 1157163 2024-002
    Material Weakness Repeat
  • 1157164 2024-003
    Material Weakness Repeat
  • 1157165 2024-001
    Material Weakness Repeat
  • 1157166 2024-002
    Material Weakness Repeat
  • 1157167 2024-003
    Material Weakness Repeat
  • 1157168 2024-002
    Material Weakness Repeat
  • 1157169 2024-003
    Material Weakness Repeat
  • 1157170 2024-002
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
16.575 Crime Victim Assistance $90,049
93.558 Temporary Assistance for Needy Families $34,528
14.276 Youth Homelessness Demonstration Program $11,325
14.267 Continuum of Care Program $8,674