Finding Text
Criteria: In accordance with 2 CFR Part 200.430(i), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that charges are accurate, allowable, and properly allocated. Furthermore, budget estimates alone do not quality as support for charges to Federal awards. Condition: The Organization allocated personnel costs to Federal awards based on a percentage allocation and an after-the-fact review of the personnel costs allocated to the Federal awards was not performed on a periodic and consistent basis throughout the year. Cause: Management was not fully familiar with the standards for documentation of personnel expenses requirements required by the Uniform Guidance. In addition, management noted that the majority of employees whose time is allocated to the Federal awards solely spends their time on activities related to the Federal awards, thus management believes the percentage allocation utilized results in an accurate allocation of personnel costs. Possible effect: Payroll costs charged to Federal awards may not accurately represent the actual time incurred on the award. Questioned cost: None Recommendation: We recommend that the Organization implement a policy and methodology that more accurately allocates payroll costs to the Federal awards. The methodology utilized should include a consistent and routine after-the-fact review to ensure that payroll costs are accurately allocated. Views of responsible officials: Management agrees with the finding and will form and implement a revised methodology for allocating payroll costs to the Federal awards.