Finding Text
Federal Agency: U.S. Department of Agriculture Federal Program Name: Partnerships for Climate-Smart Commodities Assistance Listing Number: 10.937 Federal Award Identification Number and Year: NR233A750004G064 - 2023 Award Period: 7/20/2023-6/30/2028 Type of Finding: Significant Deficiency in Internal Control over Compliance Compliance Requirement: Allowable Costs and Activities Criteria or specific requirement: Standards require that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Of the 40 payroll disbursements selected for testing, noted 31 did not have documentation of an approved pay rate, all did not have a formal review and approval documented over the payroll registers to verify completeness and accuracy, and 37 did not have a formal review and approval documented over the payroll for time and effort documentation. Questioned costs: None Context: Of the 40 payroll disbursements selected for testing, noted 31 did not have documentation of an approved pay rate, all did not have a formal review and approval documented over the payroll registers to verify completeness and accuracy, and 37 did not have a formal review and approval documented over the payroll for time and effort documentation. Per testing, noted no employee charges more than 100% of their time across federal funding or other funding sources. Cause: Due to growth of the Organization, they did not have a formal procedure to retain documentation of the review and approval over effective payrates, payroll registers or time and effort documentation. Effect: Errors or intentional fraud could occur and not be detected timely by other employees in the normal course of their responsibilities. Repeat Finding: No Recommendation: We recommend the Organization implement a compensating control to formally document their review and approval over payrates, payroll registers and time & effort studies. This review would include comparing the payroll processed and allocated to the grant to the approved time and effort documentation by funding source to ensure payroll costs are not being overcharged. Views of responsible officials: There is no disagreement with the audit finding.