Finding Text
Federal Program: Head Start Cluster (CFDA #93.600) Federal Agency: U.S. Department of Health and Human Services Federal Award Number(s): 08CH012021-02-01 Compliance Requirement: Allowable Costs/Costs Principles Questioned Costs: $281 Condition – During testing of payroll expenditures charged to the Head Start program multiple deficiencies in payroll processing and documentation were identified including hours did not agree to approved timecards, incorrect pay rates, supporting documentation was missing or incomplete, retirement and/or FICA contributions were calculated incorrectly, and allocation percentages did not agree with approved allocations. Criteria – Under 2 CFR 200.430(i) charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed supported by documentation that is accurate, reflects actual hours worked, supported by the entity’s internal controls, and consistent with the entity’s established policies. Cause - Internal controls over payroll processing and documentation were not consistently followed or adequately monitored. There was insufficient review of payroll inputs, allocation percentages, and benefit calculations prior to posting payroll costs to the Head Start program. Additionally, staff responsible for payroll processing did not consistently retain or verify supporting documentation. Effect – Payroll costs charged to the Head Start program may be inaccurate or unallowable. Recommendation - We recommend that the government strengthen its internal controls related to payroll processing and documentation for federal program expenditures and ensure staff is knowledgeable regarding Uniform Guidance documentation requirements. Client Response – Management acknowledges this finding. With the changes in staffing at the time, there was not proper training for each employee. We no longer service this program. In the future if we take a grant of this size on, training will be held for any employees involved with the grant. Status of Finding – This is not a repeat finding from the prior year.