Finding 1206486 (2025-004)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-04-13
Audit: 398537
Organization: Quincy Asian Resources, Inc. (MA)
Auditor: GRAY GRAY & GRAY

AI Summary

  • Core Issue: Payroll costs were allocated to the grant based on management's estimates rather than actual time sheets.
  • Impacted Requirements: Time sheets were not accurately completed, leading to questioned costs of $57,425.
  • Recommended Follow-Up: Implement policies to ensure only actual hours worked on the grant are charged as direct labor.

Finding Text

Condition and Criteria: Periodically throughout the year a journal entry was recorded that allocated additional payroll to the grant for certain personnel which was based on management’s estimates and not on approved time sheets. Management identified these employees’ time sheets were not being accurately completed and, periodically, estimated the additional time they believed was spent on the grant but not recorded on the approved time sheets. Questioned Cost: $57,425. Cause: The employees improperly completed their time sheets and those responsible for reviewing and approving the time sheets did not detect and correct the improperly recorded time. Effect: It cannot be verified that the employees worked these additional hours that were billed to the grant. Auditor’s Recommendation: The Organization should develop and implement policies and procedures to ensure that only actual hours spent working on the grant are charged to the grant as direct labor.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Action: While QARI concurs with the need to strengthen timekeeping documentation practices, we respectfully note that the matter identified reflects procedural and documentation deficiencies, not misuse or misallocation of grant funds. Through an internal review conducted in response to this finding, management confirmed that the personnel in question were performing allowable and allocable grant-related activities, supported by calendar records and project deliverables. Due to gaps in timekeeping procedures, approved timesheets did not fully capture all grant-related effort. Management recorded journal entries to align payroll charges with actual programmatic work performed, based on supervisory knowledge of staff assignments and workload. These entries were intended to ensure costs were properly aligned with grant activities, not to overcharge the grant. The underlying causes of this issue include: 1) Inconsistent understanding of federal documentation requirements from staff; 2) Insufficient secondary review procedures to identify and/or correct errors at the time of submission; 3) Functional limitations of our time tracking system that did not fully support multi-grant allocations. QARI maintains that the costs charged were reasonable, allowable, and incurred in support of the grant’s objectives. Corrective actions already implemented or in progress include: 1) Organization-wide training on federal timekeeping and effort reporting requirements; 2)Enhanced supervisory review and approval protocols to ensure accuracy and completeness prior to payroll processing; 3) Strengthened internal controls and updated procedures to ensure that only hours supported by compliant timesheets are charged directly to grants. QARI is committed to full compliance with federal documentation standards and has taken proactive steps to ensure that all payroll charges are fully supported, verifiable, and consistent with best practices.

Categories

No categories assigned yet.

Other Findings in this Audit

  • 1206487 2025-005
    Material Weakness Repeat
  • 1206488 2025-006
    Material Weakness Repeat
  • 1206489 2025-007
    Material Weakness Repeat
  • 1206490 2025-008
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.988 COOPERATIVE AGREEMENTS FOR DIABETES CONTROL PROGRAMS $1.00M
10.225 COMMUNITY FOOD PROJECTS $106,613
97.010 Citizenship Education and Training $80,000