Finding Text
Documentation of Allocations for Salaries and Wage Costs (Repeat Finding 2023-05) - Federal Agency: U.S. Department of Agriculture Pass-Through Agency: MN DEED Assistance Listing Number(s):17.258, 17.278 and 17.259 (WIOA Cluster) Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: MN DEED and various counties Assistance Listing Number: 93.558 (TANF) Compliance Requirement: Allowable Costs Criteria: In accordance with the Uniform Guidance, charges to federal awards for salaries and wages must be supported by records that accurately reflect the work performed. These records must be maintained within a system of internal controls that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: For the fiscal year ending June 30, 2024, the Organization did not maintain sufficient documentation to support how an individual’s time was allocated across various federally funded grants. For the WIOA Cluster all 60 payroll disbursements (totaling $49,028) tested could not be traced back to support showing what the allocation percentages by grant should have been or how the allocation percentages were determined. For TANF all 60 payroll disbursements tested (totaling $60,483) could not be traced back to support showing what the allocation percentages by grant should have been or how the allocation percentages were determined. Cause: The Organization does not have a formalized process for retaining and organizing documentation related to employee time allocation. This may be attributed to a lack of training for staff responsible for timekeeping and financial documentation, or to weaknesses in internal controls over record retention. Effect: The absence of adequate documentation increases the risk that personnel costs may be inaccurately allocated, potentially resulting in noncompliance with federal requirements. This could lead to questioned costs, disallowed expenditures, and the potential need to return funds to the federal government. Questioned costs: For WIOA Cluster - $49,028 For TANF - $60,483 Recommendation: The Organization should establish and implement a comprehensive documentation retention policy that includes clear procedures for maintaining records supporting the allocation of employee time. This policy should ensure that all relevant documentation—such as timesheets and work allocation records—is retained for the required period and readily accessible for audit purposes. Additionally, staff involved in timekeeping and financial reporting should receive training on documentation requirements under the Uniform Guidance. Responsible Officials Response: CMJTS has since worked with DEED to updated our cost allocation policy, and DEED approved our new policy. In this policy, the CMJTS fiscal team will work with CMJTS program managers to update allocations for the upcoming month. Changes to allocations will be documents and saved for record retention.