Finding 1200780 (2025-102)

Allowable Cost Approval - Federal Agency: Department of Education. Award Name: Adult Education and Family Literacy Act. Program Year: 2025. Assistance Listing Number: 84.002A. Criteria: The recipient must: establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition: Payroll is an allowable cost per the grant agreement once approved by DESE in the program budget. Employee changes throughout the year require reapproval of the budget. The Center did not maintain documentation to support reapprovals and budget changes during the year, nor was there any documented review of the budget change submitted. Context: For twenty-five payroll selections, there was no documentation maintained to support a direct correlation to the approved payroll budget. Cause: Due to the size of the entity, the Executive Director is the only one that processes and reviews grant expenditures. Effect: No documentation was maintained to support review of the payroll expenditures when changes were made to the grant. Questioned Costs: None. Repeat Finding: No. Recommendation: Implement review procedures over allowable cost to ensure all employees charged to the grant have received DESE approval. Views of Responsible Parties: We concur with the finding. The absence of payroll controls resulted primarily from the size of the staff. We have implemented a policy for a program manager to review all allowable costs.