Finding 1175350 (2025-006)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2025
Accepted
2026-02-25
Audit: 389053
Auditor: ARMANINO

AI Summary

  • Core Issue: There are discrepancies between the amounts charged to federal grants and what is recorded in the general ledger, indicating potential misstatements.
  • Impacted Requirements: Compliance with 2 CFR §200.430(i) is at risk due to inadequate time and effort reporting and lack of proper documentation.
  • Recommended Follow-Up: Provide training for employees on time coding and ensure supervisors focus on job codes during reviews; document any adjustments made during billing reviews.

Finding Text

Criteria: According to 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Specifically. employees whose time is split among multiple activities must maintain time and effort reports reflecting actual hours worked in a manner consistent with 2 CFR §200.430(g)(vi)and must be supported by appropriate documentation that complies with the federal cost principles. Condition: There were variances in the amounts charged to the grant between the expenditures billed and the expenditures recorded in the general ledger as supported by timesheets coded to specific programs. Cause: Employees may not be properly trained on time coding and the review of supervisors were likely focused on hours worked, rather than job codes. The differences occurred as a result of adjustments made in the billing review process. The reason for the adjustments was not documented. Possible effect: Amounts charged to grants could be misstated. Questioned cost: N/A

Corrective Action Plan

Recommendation: Management should ensure that employees are aware of the jobs they are working on as they log their time, and supervisors should include this as part of their review process. When adjustments to correct errors are necessary, management should document the reason for the correction as well as review of that correction. The accounting department should record the adjustments in the general ledger through a journal entry. Action Taken: The Finance and Human Resources departments are implementing enhancements to existing payroll allocation processes, including additional training and guidance to employees and supervisors to reinforce proper timekeeping and project coding in accordance with established policy. Management will also implement formal control requiring documented review and approval of payroll allocation adjustments. All approved adjustments will be recorded in the general ledger through journal entries prepared and reviewed in accordance with established accounting procedures. Anticipated completion date: June 30, 2026

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1175347 2025-005
    Material Weakness Repeat
  • 1175348 2025-006
    Material Weakness Repeat
  • 1175349 2025-005
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $421,367
14.889 CHOICE NEIGHBORHOODS IMPLEMENTATION GRANTS $78,518
14.252 SECTION 4 CAPACITY BUILDING FOR COMMUNITY DEVELOPMENT AND AFFORDABLE HOUSING $63,108
14.169 HOUSING COUNSELING ASSISTANCE PROGRAM $38,993