Finding Text
Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Material Weakness in Internal Controls over Compliance and Instance of Noncompliance Department of Education Federal Assistance Listing Number: 84.031 Federal Program Name: Higher Education Institutional Aid Federal Award Number: P031S210057, P031C210038 Award Year: 2023-24, 2022-23, 2021-22 Criteria – Compensation costs are allowable to the extent they satisfy requirements of 2 CFR section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed. Condition/context – A sample of 13 employees out of a population of 24 employees whose compensation was charged to the awards was selected. Of the 13 samples selected we found 5 employees who either had no records to support the actual allocation of time that was charged to each award or the amount allocated to the award did not agree to the time and effort reporting. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. Our sample was not, and was not intended to be, statistically valid. Questioned costs – Undeterminable Cause/effect – The University does not have the proper controls in place to ensure time and effort reporting is completed or completed accurately. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award. Repeat finding – Yes, 2023-002 Recommendation – We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time and agrees to amount allocated to the award. Views of responsible officials and planned corrective actions – Heritage implemented a new system, however Heritage continues to encounter mistakes on correctly completing the time & efforts due to the differences in length of faculty contracts. Even though DOE noted that “this finding resolved and closed.” Heritage continues to work on the process to improve with further training.