Finding Text
Assistance Listing Number and Title: ALN 17.270, Reentry Employment Opportunities Federal Agency: U.S. Department of Labor Federal Award Numbers: YF-39537-23-60-A-4 Grant period: February 1, 2023 through July 31, 2026 Criteria: The Uniform Guidance requires recipients to establish and maintain effective internal controls that provide reasonable assurance costs charged to federal awards are allowable, allocable, and properly documented in accordance with the terms of the award. Condition: The Organization has policies and procedures in place that require a Change of Status (COS) form to be completed and approved when an employee's job changes, the allocation of their time between various projects changes, and other payroll modifications. However, based on our testing, we noted multiple instances where these forms are not completed and provided to the payroll department timely. As a result, the labor distribution reports generated from the payroll system did not have the accurate information. We noted that the grants were not overbilled, and the allocations used for billing were reflective of the time spent on the program due to the biller detecting the error in the labor distribution reports in their review; however, having incorrect or untimely COS forms creates additional risks in the grant billing and financial reporting. Cause: The Organization did not promptly update project allocations when employees began working across multiple projects, resulting in inaccurate payroll data relative to the Change of Status (COS) form requirements. Effect: There was a variance between amounts reported and billed to the grant and the labor distribution report. Context: Out of a sample of 40 payroll disbursements, four were selected from an employee who works across multiple federal grant programs. Of the four selected payroll disbursements for this employee, there was a variance on two payroll transactions between amounts reported and billed to the grant and the labor distribution report. Questioned costs: None Repeat Finding: No Recommendation: We recommend that the Organization review in policies and procedures surrounding COS forms and perform additional training to relevant staff to ensure COS forms are prepared, approved, and entered into the system in advance of the effective date of a payroll change. We also recommend the Organization perform regular time studies for employees who split their time between multiple projects to determine that allocations are accurate. Views of responsible officials of the auditee: The Organization agrees with the findings and has implemented procedures to ensure timely receipt of the change of status form by the payroll department. A tracking log of all requested COS’s is maintained by the payroll department to ensure all changes have been entered into the payroll system in the proper period.