Finding 1217528 (2024-002)

45 CFR § 75.430(i)(1)(i) states charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, 45 CFR § 75.303 requires a non-Federal entity receiving federal awards to 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. Due to control deficiencies, the following errors were noted for AL # 93.659 - Adoption Assistance for the fiscal year ended December 31, 2024: • The testing of payroll expenses noted the County utilized employee-completed time-sheets for allocating payroll expenses to the federal program. However, the County’s established internal control procedures did not occur for four out of 40 (10%) timesheets submitted. The timesheets did not contain appropriate evidence that the timesheet was reviewed and approved by a supervisor with direct knowledge of the employee’s activities to support proper allocation to the program. We were able to substantiate the related expenses through additional means to support allocation to the federal program. Additionally, three out of 40 timesheets (7.5%) reviewed, indicated the Director approved their own timesheet instead of another supervisor. • Time accrued was miscalculated which resulted in an employee banking 15 minutes extra of comp time. • Time charged to sick and regular pay was miscalculated which resulted in an employee being charged 8 hours of sick pay instead of 7 hours. • Time accrued was miscalculated which resulted in an employee being paid for 80 hours when the employee only worked 79 hours. Failure to ensure all time sheets are appropriately approved and reviewed by a knowledgeable supervisor could result in errors and unallowable costs being allocated to a federal program and could ultimately result in a questioned cost. We recommend the County review established policies and procedures and ensure all timesheets are appropriately reviewed prior to allocation to a federal program.