Finding 1160032 (2022-005)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2025-10-06

AI Summary

  • Core Issue: UHU is not maintaining adequate timesheets to support payroll allocations, leading to potential mischarges of salaries and wages.
  • Impacted Requirements: This violates Title 2 U.S. CFR Part 200, which mandates accurate record-keeping for federal award charges.
  • Recommended Follow-Up: Enforce timesheet completion for all employees and establish a reconciliation process between timesheets and the general ledger.

Finding Text

Finding 2022-005: Timesheets Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: Payroll is allocated based on budget. We noted that payroll transactions lacked a timesheet showing programs worked on during the period or other evidence of proper record-keeping to support the program allocations of salaries and related expenses in the general ledger. Context: UHU failed to keep adequate time records to support the amounts charged to the general ledger. Allocation was based on award budget and UHU did not track time using timesheets to reallocate time each month. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. The issue is considered systemic in nature. Cause: UHU’s current policies do not require employees to complete timesheets for each pay period. Payroll is allocated based on budget. Effect or Potential Effect: UHU could inadvertently mischarge salaries and wages to its various programs.Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-005 Recommendation: We recommend that management enforce its current payroll policies, ensure each employee completes a timesheet that pertains to each payroll period and which documents the allocation of time worked on departments, projects and affiliates (per the policy). Furthermore, the finance department should prepare and maintain a reconciliation between the program allocations (as documented in the approved timesheets) and the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.

Corrective Action Plan

Views of Responsible Officials and Corrective Action: Us Helping Us has sought consultation from its contract CPA firm regarding this known time management issue. The organization is currently utilizing a payroll allocation system aligned with a time management system approved by current grantors for reimbursements and reporting. Us Helping Us acknowledges the audit finding regarding the organization’s timekeeping and payroll allocation practices. Specifically, the absence of timesheets for each pay period and reliance on budget estimates for payroll allocation does not fully comply with the standards outlined in 2 CFR § 200.430(i) for compensation for personal services. Us Helping Us is in the process of implementing a timesheet system which will be supported by internal controls allowing for accurate, allowable and properly allocated time charges. To address this issue and ensure future compliance, Us Helping Us has implemented the following measures: The organization is to adopt a formal timekeeping policy requiring all employees whose salaries are charged to Federal awards to submit timesheets for each pay period. These timesheets must Reflect 100% of the employee’s compensated activities, be signed by both the employee and their supervisor, and distinguish between Federal and non-Federal activities. For employees working exclusively on a single Federal award, and for those working across multiple funding sources, detailed timesheets will be required for each pay period. While budget estimates may be used for interim accounting purposes, we now perform reconciliations to compare budgeted payroll allocations with actual time worked. Adjustments are made if discrepancies exceed 10% Staff involved in payroll and grant management will have received training on Federal time and effort reporting standards. We have also implemented internal controls to ensure consistent documentation and review. The system will comply with established accounting practices of Us Helping Us and reflect the total activity for which employees are compensated. The system will support the distribution of the Us Helping Us employee salaries among cost objectives, Federal awards, non-Federal awards, indirect and direct cost activities. The system will also allow for the appropriate maintenance of record keeping activities and supporting documentation. Us Helping Us’ financial policies have been updated to include requirements for time and effort documentation per 2 CFR § 200.430(i), procedures for reconciling payroll allocations with actual time worked and documentation retention standards aligned with 2 CFR § 200.302(b)(3). Us Helping Us is committed to maintaining full compliance with Federal regulations and ensuring that personnel costs charged to Federal awards are accurate, allowable, and properly documented. The Executive Director and the Deputy Executive Director for Finance and Administration will be responsible for this Plan and will be effective immediately.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1160007 2022-001
    Material Weakness Repeat
  • 1160008 2022-002
    Material Weakness Repeat
  • 1160009 2022-003
    Material Weakness Repeat
  • 1160010 2022-004
    Material Weakness Repeat
  • 1160011 2022-005
    Material Weakness Repeat
  • 1160012 2022-006
    Material Weakness Repeat
  • 1160013 2022-007
    Material Weakness Repeat
  • 1160014 2022-001
    Material Weakness Repeat
  • 1160015 2022-002
    Material Weakness Repeat
  • 1160016 2022-003
    Material Weakness Repeat
  • 1160017 2022-004
    Material Weakness Repeat
  • 1160018 2022-005
    Material Weakness Repeat
  • 1160019 2022-006
    Material Weakness Repeat
  • 1160020 2022-007
    Material Weakness Repeat
  • 1160021 2022-001
    Material Weakness Repeat
  • 1160022 2022-002
    Material Weakness Repeat
  • 1160023 2022-003
    Material Weakness Repeat
  • 1160024 2022-004
    Material Weakness Repeat
  • 1160025 2022-005
    Material Weakness Repeat
  • 1160026 2022-006
    Material Weakness Repeat
  • 1160027 2022-007
    Material Weakness Repeat
  • 1160028 2022-001
    Material Weakness Repeat
  • 1160029 2022-002
    Material Weakness Repeat
  • 1160030 2022-003
    Material Weakness Repeat
  • 1160031 2022-004
    Material Weakness Repeat
  • 1160033 2022-006
    Material Weakness Repeat
  • 1160034 2022-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.914 Hiv Emergency Relief Project Grants $805,140
93.136 Injury Prevention and Control Research and State and Community Based Programs $338,862
93.242 Mental Health Research Grants $206,233
19.029 Economic Injury Disaster Loan $150,000
93.917 Hiv Care Formula Grants $98,670
93.939 Hiv Prevention Activities Non-Governmental Organization Based $74,518
93.279 Drug Use and Addiction Research Programs $67,974
93.940 Hiv Prevention Activities Health Department Based $64,381
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $62,499