Finding Text
Finding Reference: 2025-001 – A. Activities Allowed or Unallowed; B. Allowable Costs/Cost Principles Federal Program Information Federal Agencies: Department of Justice Awards: Assistance Listing 16.753 – Congressionally Recommended Awards Award Periods: July 1, 2024 – September 30, 2026 Description: Review and Approval of Payroll Expenditures Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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 The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of certain payroll expenditures that were included in the Department of Justice (DOJ) submissions. Cause The Corporation did not obtain sufficient evidence of the review and approval of certain timecards and cost allocation schedules reported to the DOJ in the required submissions. Effect or potential effect The related payroll expenditures included in the DOJ submissions could be unallowed costs. Questioned costs None. Identification of a repeat finding No. This is not a repeat finding. Context In order to evidence review and approval of individual payroll expenditures, management reviews and approves these expenditures as part of the payroll process, specifically the review and approval of timecards and cost allocation schedules. In conjunction with our testing related to allowability, we selected a sample of payroll expenditures to test management’s review and approval of expenditures as part of the payroll process. In accordance with the Corporation’s payroll process, timecards and cost allocation schedules must be reviewed and approved for determining allowability of these payroll expenditures prior to submitting reports to the DOJ. There were six payroll expenditures totaling $5,828, or approximately 9% of our population; that did not have a timecard approval or approval of their cost allocation schedule. Based on review of the timecards and cost allocation schedules for the sample selected, no expenditures were identified as unallowable based on the terms and conditions of the grant agreement and federal program. Recommendation Management should retain documentation that evidences the review and approval of expenditures submitted to the DOJ. View of responsible officials There is no disagreement with the audit finding.