Finding 1166949 (2023-002)

2023-002 Allocation of Program Effort by Employees – Activities Allowed or Unallowed and Allowable Costs/Cost Principles Federal Program: Research and Development Cluster (ALN 47.049-Mathematical and Physical Sciences, Award 2043575, Award Period 3/15/21 – 2/28/23) Federal Agency: National Science Foundation Criteria: The financial management requirements include processes and controls over the allocation of personnel time and effort to program activities as required by 2 CFR 200.430. Condition: Our testing of payroll expenses charged to the program noted that the Organization allocates senior personnel time and effort in one journal entry as a program expense. Cause: The Organization did not adhere to documented policies for allocating senior personnel effort and time costs to program accounting records. Effect: The Organization does not maintain a compliant effort system and is not in compliance with 2 CFR 200.430 which could lead to inaccurate allocation of personnel costs to the federal program. Identification as a repeat finding, if applicable: The finding is a repeat of Finding 2022-004 in the prior year. Recommendation: We recommend the Organization communicate and enforce policies for allocating senior personnel effort and time costs to grant and accounting personnel and implement formal processes to monitor compliance with federal awards. View of Responsible Officials: The Organization has since improved its procedures for allocating senior personnel time and effort in its accounting and financial record keeping processes. Time and effort are now allocated via approved time and expense personnel reports and the charges are reconciled to the accounting records and there is a formal process to monitor compliance with this requirement. Questioned Costs: None