Finding Text
Information on the federal program: Research and Development Cluster, Multiple Federal Grantors, Multiple Award Periods Criteria or specific requirement: Allowable Costs/Cost Principles Federal regulations state that “charges to federal awards for salaries and wages, must be based on records that accurately reflect the work performed.” The regulations also state that “the records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and property allocated” and “budget estimates alone do not qualify as support for charges to federal awards” (2 CFR 200.430(i)). Condition: During our test work over the Research and Development cluster, we noted the Institute did not have time and activity records with sufficient detail per federal regulations to support its salary and fringe benefit expenses. Cause: Lack of understanding of the requirements of the time and activity reports. Effect of Potential Effect: Based on testing completed, the Institute did not have sufficient procedures to record and verify employees time and activity throughout fiscal year 2025. Questioned Costs: Total questioned costs are $556,632. This includes all salaries and benefits charged to the cluster which lacked documentation to support the charge and allocation to the grant. Assistance Listing Number & Questioned Costs 10.001 - $10,000 10.216 - $5,333 10.303 - $45,801 10.307 - $7,167 10.310 - $457,524 10.326 - $30,807 Context: We selected a sample of 25 salary and benefit charges to the Research and Development cluster. Within our sample we noted that that none of the selections had proper documentation to support the charge and allocation to the grant (e.g. , daily time and activity records, effort verification reports, etc.). These 25 selections had a value of $24,352. Per discussions with management and further review, the amounts charged to the grant were based on the approved budget for the position and the internal allocation performed each payroll period. Salaries and benefits charged to the grant in the audit period totaled $556,632 and represented 59% of the total grant expenditures for the period. The sample was not intended to be, and was not, a statistically valid sample. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend management utilize a time and activity tracking method that will meet the requirements of federal regulations. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the stated finding and has implemented a corrective action plan.