Finding Text
U.S. Department of Housing and Urban Development Pass-through Entity: City of Charlotte, North Carolina Program Name: Home Investment Partnerships Program Federal Assistance Listing Number: 14.239 Significant Deficiency – Allowable Costs and Activities Finding 2025-004 Criteria: Per Section 200.303 of the Uniform Grant Guidance, a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: There were four (4) out of forty (40) samples tested where the reasoning for the allocation of payroll related to the administrative function could be substantiated; however, sufficient documentation of the review and approval of the reason for the allocation for the applicable employees was not sufficiently documented. Questioned Costs: None noted. Effect: By not maintaining a clearly documented methodology or effort certification to support payroll allocations, the Organization increases the risk that unallowable costs or activities may go undetected prior to submission of reimbursement requests to the grantor. Cause: The Organization did not have formal policies or procedures in place to formally document, review, and retain support for payroll allocations for employees working across multiple programs prior to submitting reimbursement requests to the grantor. Recommendation: The Organization should further evaluate and formalize its process for documenting and approving the allocation of employee time for individuals who do not work 100% of their time on a single program to ensure allocations are properly reviewed in determining allowable costs and activities. Views of Management: Management agrees with the finding and is implementing procedures to correct this which are further discussed in the Corrective Action Plan. See Corrective Action Plan for more information.