Finding Text
AL 93.671: Allowable Costs - Allocation of Fringe Benefits– Material Weakness Criteria A key control surrounding payroll payments is the allocation of fringe benefits based on hours worked on each project or grant. Condition During the year, it was noted there was an error in allocation of fringe benefits. Cause Supporting payroll allocation spreadsheet contained errors in allocation formulas. Effect Fringe benefits were not properly allocated based on time and effort of employee. Questioned Costs N/A Context Outsourced accountants create spreadsheets to track allocations of payroll expenses and fringe benefits based on time and effort reports. This spreadsheet is used to post journal entries for payroll and allocated payroll expenses and fringe benefits to different grants. The total amount paid for payroll disbursements chosen for sampling was $88,215. Out of this amount, we were able to substantiate $88,204 of payroll disbursements. Recommendation We recommend spreadsheet formulas be reviewed prior to posting entries and allocating payroll and fringe benefits to grant programs. View of Responsible Officials and Planned Corrective Actions The Abused Adult Resource Center’s payroll allocations for grants will be documented and reviewed by outsourced CPA firm. Indication of Repeat Finding This is a new finding.