2025-002 – Allowable Costs/Cost Principles – Payroll Charges Auditor Description of Condition and Effect. During our testing of personnel timecards, we noted one instance where the amounts charged to the grant were understated. The wage rate per the employee's personnel file did not agree to the rate used to pay the employee, which resulted in an underpayment to the employee which was subsequently corrected. In another instance, we noted that the District charged payroll expenditures to the food service fund that were related to a different grant. This resulted in an overstatement of costs charged to the child nutrition program. As a result of this condition, the District did not fully comply with the Uniform Guidance applicable to the above noted grants. Auditor Recommendation. We recommend that the District review the process for accumulating and summarizing time to minimize the likelihood of errors in the process. Responsible Person: Kimberly Worden, Business Manager Corrective Action. While the identified payroll errors were very small, to address these issues, the District will implement updated review procedures to ensure accuracy of wage rates and proper grant allocation. Specifically, payroll staff will verify that employee wage rates used for grant charges agree to the rates documented in personnel files prior to processing payments. Additionally, the District will establish a secondary review process to confirm that payroll expenditures are charged to the correct grant or program before posting. Training will be provided to all payroll and grant management personnel on proper coding and documentation requirements. Anticipated Completion Date: June 30, 2026