Finding Text
Criteria 2 CFR Section 200.403 and Section 200.430 requires all costs charged to federal awards by nonfederal entities to be allowable, allocable, and adequately documented. Specifically, payroll costs must reflect actual time worked and be supported by appropriate review and approval processes. Condition The Organization was unable to provide documentary evidence that costs were charged to federal awards in compliance with the requirements of the Uniform Guidance. We identified multiple instances in which expenditures were charged to federal award programs for costs that were not allowable or documentation provided by the Organization lacked documentary evidence of review by appropriate individuals. Cause The supporting documentation for charging costs to federal awards provided by the Organization was not consistently reviewed on a timely basis by supervisory personnel. Effect Key controls over the Organization’s compliance with allowable cost requirements for federal award programs were not functioning as designed. Questioned Costs $12,814 Context There were six instances in which the Organization’s payroll hours charged to federal awards exceeded the 80-hour limit per individual per pay period and were not detected by employees. In addition, there were four instances in which the Organization was unable to provide any documentary evidence of review by supervisory personnel. The extrapolation of unallowable costs identified during sample testing to the related population resulted in projected likely questioned costs of $256,199 from a total population of approximately $10.1 million of related costs. Recommendation The Organization should adhere to its policies and procedures regarding supervisory review of documentation to support the allowability of costs charged to federal awards. Furthermore, we recommend that the personnel reviewing support for allowable costs initial or sign off on such support to provide evidence of their actions. In addition, the Organization should review, and possibly revise, its policies and procedures for preventing or detecting and correcting unallowable costs charged to federal awards to ensure consistent application of those policies and procedures to all costs charged to federal awards. Views of Responsible Officials See the accompanying Corrective Action Plan.