Finding Text
Coronavirus State and Local Recovery Funds - Assistance Listing Number 21.027; Pass-through from State of Geogia Office of the Governor and Dekalb County; Grant Period: Year Ended December 31, 2024 Condition: The auditor's testing of payroll allocations for employees charging time to Coronavirus State and Local Recovery Funds, passed through from the State of Georgia Office of the Governor, identified instances where the hours allocated to the grant award did not precisely match the hours recorded on the employees' approved contemporaneous timesheets. In a sample of 48 transactions, 41 instances showed minor discrepancies. The discepancies included both overallocations (more hours charged to the program than recorded on the timesheets) and underallocations (fewer hours charged than recorded). While the total variance for the sample was determined to be immaterial, the result indicated a systemic control weakness. Criteria: Under 2 CFR 200.430(g)(1), 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 that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and support the distribution of the employee's salary or wages among specific activities or costs objectives if the employee works on more than one federal award or a federal award and non-federal award. Cause: Management did not have sufficient internal controls or review procedures in place to ensure that the hours used for payroll allocation reconciled exactly to the source documentation (timesheets) on a consistent basis. The process relies on manual data entry, which was prone to minor errors, and did not include a robust, documented verification step. Effect: The Agency could potentially over or under allocate salaries and benefits to the program. Questioned Cost: None noted as a result of audit procedures performed. Recommendation: The Agency should implement a formal, documented monthly reconciliation process between the hours recorded on employee timesheets and the hours/percentages used for actual salary allocation to all federal awards. The entity should consider implementing an automated effort certification or time-tracking system to reduce manual errors and ensure consistency. Management Response: We agree with the findings in the audit report and have developed a Corrective Action Plan to address each item promptly. This has been a challenging year for the organization, including turnover in the Chief Financial Officer ("CFO") position and the fact that this was our first Single Audit due to increased federal funding related to COVID-19 programs. These factors contributed to delays in audit readiness, gaps in technical accounting for grants, and weaknesses in internal controls over financial reporting and federal award reporting. We have implemented a comprehensive plan to address these challenges and will be hiring a new CFO in the first quarter of 2026.