Finding No.: 2022-015 Federal Agency: U.S. Department of Education AL Program: 84.047A TRIO Upward Bound Federal Award No.: P047A171556-21 Area: Allowable Costs/Cost Principles Questioned Costs: $8,842 Criteria: Federal program expenditures should be necessary and reasonable for the performance of the Federal award in accordance with allowable costs/cost principles requirements and be adequately documented. Furthermore, 2 CFR 200.303(a) states that the subrecipient must establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the COSO. Conditions: 1. For four (or 21%) of nineteen items, aggregating $1,599 of $82,998 in total non-payroll expenditures, deficiencies were noted, as follows: Item # Check/ Invoice # Description Expense Amount Questioned Cost 1 22-5005 Student Housing Expenses $ 268 $ 26 2 22-5206 Student Housing Expenses 268 26 3 22-6090 Student Housing Expenses 268 26 4 22-6028 Student Housing Expenses 268 26 $1,072 $104 For item #s 1 through 4, these pertain to cost of meals provided to 61 students for Summer 2022 semester for which no supporting listing of students was on file. Based on our examination, it appears that there are only 55 students for Summer 2022. Only $104 is included in the total questioned costs, which relates to the equivalent cost of 5 excess meals. 2. For twenty-three (or 56%) of forty-one items, aggregating $24,427 of $186,116 in total payroll expenditures, deficiencies were noted, as follows: Item # Check# Description Expense Amount Questioned Cost 1 51241 Salaries and wages $ 375 $ 375 2 54717 Salaries and wages and benefits 418 418 3 54807 Salaries and wages and benefits 418 418 4 54909 Salaries and wages and benefits 418 418 5 54912 Salaries and wages and benefits 418 418 6 51955 Salaries and wages and benefits 682 682 7 51957 Salaries and wages and benefits 1,991 996 8 57284 Salaries and wages and benefits 1,010 14 9 50165 Salaries and wages and benefits 223 56 10 51956 Salaries and wages and benefits 1,411 83 11 52567 Salaries and wages and benefits 1,411 83 12 53885 Salaries and wages and benefits 1,411 83 13 55824 Salaries and wages and benefits 184 74 14 55825 Salaries and wages and benefits 181 1 15 56108 Salaries and wages and benefits 1,037 118 16 56181 Salaries and wages and benefits 413 112 17 56191 Salaries and wages and benefits 407 123 18 53553 Salaries and wages and benefits 648 341 19 56107 Salaries and wages and benefits 523 163 20 52228 Salaries and wages and benefits 1,021 1,021 21 56789 Salaries and wages and benefits 1,429 1,429 22 56791 Salaries and wages and benefits 1,037 1,037 23 54234 Salaries and wages and benefits 640 275 $17,706 $8,738 For item #s 1 through 5, there was no approved employment contract to substantiate the amount paid to employees. For item # 6, there were no hours worked per approved timesheet. For item #s 7 through 8, approval of the amount paid to employees relating to incentive or bonus was not on file. Only $1,010 is included in the total questioned costs, which relates to the amount paid to the employee for incentive or bonus, and related fringe benefits (employer contributions for social security and health insurance). For item #s 9 through 19 and 23, we noted discrepancies in either a) the hours paid compared to the hours recorded on the approved timesheet or b) the rate paid compared to the rate per contract. Only $1,512 is included in the total questioned costs, which relates to the variance between the amount paid to the employee against the recalculated amount based on provided supporting documentation. For item #s 18 through 23, approval of the amount paid to employees relating to leave was not on file. For item # 23, the copy of the check payment to support the amount paid to employee was not on file. Cause: The College lacks adequate internal controls over compliance with the applicable federal regulations relating to allowable costs/cost principles, specifically, obtaining and retaining sufficient documentation to support all transactions. Effect: The College is not in compliance with the applicable allowable costs/cost principles requirements. Accordingly, questioned costs of $8,842 result because the projected questioned costs exceed the $25,000 threshold. Identified as a Repeat Finding: 2021-011 Recommendation: College management should improve internal control policies and strengthen controls requiring obtaining and retaining sufficient documentation to support all transactions.