FAC Explorer

Finding 1218770 (2025-004)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-06-25
Audit: 404883
Organization: City of Lowell (MA)
Auditor: CBIZ CPAS PC

AI Summary

  • Core Issue: Insufficient documentation for payroll costs charged to federal awards, specifically for four employees in the Child Nutrition Cluster.
  • Impacted Requirements: Compliance with federal regulations requiring accurate records of work performed and adherence to approved pay rates.
  • Recommended Follow-Up: Establish formal procedures to ensure all pay rates are documented and implement controls for proper time and effort reporting.

Finding Text

2025-004 Maintain Approved Rate Support for Employee Pay Rates and Time and Effort Support Federal Program(s) Information Federal Agency: U.S. Department of Education Pass-Through Entity: Massachusetts Department of Elementary and Secondary Education Award Name: Child Nutrition Cluster Assistance Listing Number: 10.553/10.555/10.559 Award Year: 2025 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Per 2 CFR 200.430, compensation for personal services must be supported by records that accurately reflect the work performed and be based on approved pay rates consistent with established payroll and personnel policies. Documentation supporting payroll costs charged to Federal awards must be properly authorized and maintained. Condition and Context As part of the testing of twenty-five employees charged to the Child Nutrition Cluster, adequate time and effort documentation supporting the allocation of payroll costs charged to the program for four employees was not provided. Cause Weakness in the design and implementation of internal controls in that payroll costs lacked sufficient supporting documentation to demonstrate costs charged to the program were based on actual work performed. Effect or Potential Effect Due to the weakness in internal controls noted above, there is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. Questioned Costs - Not determinable. Identification as a Repeat Finding - This is not a repeat finding. Recommendation The City should implement formal procedures to ensure all employee pay rates are supported by approved and retained documentation and implement controls to ensure time and effort reporting is prepared, reviewed, and maintained. View of Responsible Officials Management’s corrective action plan is included at the end of this report after the Summary Schedule of Prior Year Findings.

Corrective Action Plan

Audit Finding Reference: 2025-004 Maintain Approved Rate Support for Employee Pay Rates and Time and Effort Support Planned Corrective Action: The District will strengthen internal controls over payroll costs charged to federal programs by implementing the following corrective measures: 1. Identify all employees whose salaries and wages are charged, in whole or in part, to the Child Nutrition Cluster and other federal awards. 2. Implement a formal process requiring completion of appropriate time and effort certifications in accordance with Uniform Guidance requirements and District policy. 3. Establish procedures to ensure certifications are completed in a timely manner, signed by employees and/or supervisors as required, and maintained in a centralized location. 4. Develop a compliance tracking system to monitor the collection and retention of required documentation throughout the year. 5. Conduct periodic reviews of payroll allocations to verify that payroll charges are supported by appropriate documentation and accurately reflect the work performed. 6. Provide annual training to Child Nutrition, Payroll, Human Resources, and Business Office personnel regarding federal time and effort documentation requirements and record retention responsibilities. Planned Implementation Date of Corrective Action: The District has implemented procedures to identify all federally funded employees and will require completion and retention of all applicable time and effort documentation beginning immediately and for all future reporting periods. Person Responsible for Corrective Action: HR Generalist for Cafeteria Derek Pinto, Assistant Superintendent of Finance

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 1218767 2025-004
    Material Weakness Repeat
  • 1218768 2025-004
    Material Weakness Repeat
  • 1218769 2025-004
    Material Weakness Repeat
  • 1218771 2025-002
    Material Weakness Repeat
  • 1218772 2025-002
    Material Weakness Repeat
  • 1218773 2025-002
    Material Weakness Repeat
  • 1218774 2025-002
    Material Weakness Repeat
  • 1218775 2025-002
    Material Weakness Repeat
  • 1218776 2025-002
    Material Weakness Repeat
  • 1218777 2025-001
    Material Weakness Repeat
  • 1218778 2025-001
    Material Weakness Repeat
  • 1218779 2025-001
    Material Weakness Repeat
  • 1218780 2025-001
    Material Weakness Repeat
  • 1218781 2025-001
    Material Weakness Repeat
  • 1218782 2025-001
    Material Weakness Repeat
  • 1218783 2025-001
    Material Weakness Repeat
  • 1218784 2025-001
    Material Weakness Repeat
  • 1218785 2025-001
    Material Weakness Repeat
  • 1218786 2025-001
    Material Weakness Repeat
  • 1218787 2025-001
    Material Weakness Repeat
  • 1218788 2025-001
    Material Weakness Repeat
  • 1218789 2025-001
    Material Weakness Repeat
  • 1218790 2025-001
    Material Weakness Repeat
  • 1218791 2025-003
    Material Weakness Repeat
  • 1218792 2025-003
    Material Weakness Repeat
  • 1218793 2025-003
    Material Weakness Repeat
  • 1218794 2025-003
    Material Weakness Repeat
  • 1218795 2025-003
    Material Weakness Repeat
  • 1218796 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.239 HOME INVESTMENT PARTNERSHIPS PROGRAM $9.19M
10.555 NATIONAL SCHOOL LUNCH PROGRAM $8.15M
66.458 CLEAN WATER STATE REVOLVING FUND $7.25M
14.218 COMMUNITY DEVELOPMENT BLOCK GRANTS/ENTITLEMENT GRANTS $4.32M
10.553 SCHOOL BREAKFAST PROGRAM $3.55M
21.027 COVID-19 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $721,580
16.838 COMPREHENSIVE OPIOID, STIMULANT, AND SUBSTANCE USE PROGRAM $363,176
10.559 SUMMER FOOD SERVICE PROGRAM FOR CHILDREN $313,682
16.922 EQUITABLE SHARING PROGRAM $307,087
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $272,189
10.558 CHILD AND ADULT CARE FOOD PROGRAM $271,407
84.425 COVID-19 EDUCATION STABILIZATION FUND $270,210
14.900 LEAD HAZARD REDUCTION GRANT PROGRAM $251,900
17.207 EMPLOYMENT SERVICE/WAGNER-PEYSER FUNDED ACTIVITIES $177,329
84.215 INNOVATIVE APPROACHES TO LITERACY; PROMISE NEIGHBORHOODS; FULL-SERVICE COMMUNITY SCHOOLS; AND CONGRESSIONALLY DIRECTED SPENDING FOR ELEMENTARY AND SECONDARY EDUCATION COMMUNITY PROJECTS $174,534
16.738 EDWARD BYRNE MEMORIAL JUSTICE ASSISTANCE GRANT PROGRAM $165,598
93.566 REFUGEE AND ENTRANT ASSISTANCE STATE/REPLACEMENT DESIGNEE ADMINISTERED PROGRAMS $164,241
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $160,131
84.365 ENGLISH LANGUAGE ACQUISITION STATE GRANTS $158,335
14.231 EMERGENCY SOLUTIONS GRANT PROGRAM $144,257
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $132,525
16.745 CRIMINAL AND JUVENILE JUSTICE AND MENTAL HEALTH COLLABORATION PROGRAM $126,879
66.468 DRINKING WATER STATE REVOLVING FUND $123,267
14.881 MOVING TO WORK DEMONSTRATION PROGRAM $115,480
84.027 SPECIAL EDUCATION GRANTS TO STATES $112,707
84.371 COMPREHENSIVE LITERACY DEVELOPMENT $91,830
16.590 GRANTS TO ENCOURAGE ARREST POLICIES AND ENFORCEMENT OF PROTECTION ORDERS PROGRAM $84,317
14.231 COVID-19 EMERGENCY SOLUTIONS GRANT PROGRAM $79,043
97.042 EMERGENCY MANAGEMENT PERFORMANCE GRANTS $72,494
93.576 REFUGEE AND ENTRANT ASSISTANCE DISCRETIONARY GRANTS $65,688
84.010 TITLE I GRANTS TO LOCAL EDUCATIONAL AGENCIES $61,508
93.788 OPIOID STR $53,881
17.258 WIOA ADULT PROGRAM $53,203
84.424 STUDENT SUPPORT AND ACADEMIC ENRICHMENT PROGRAM $41,229
16.609 PROJECT SAFE NEIGHBORHOODS $34,692
20.600 STATE AND COMMUNITY HIGHWAY SAFETY $34,014
84.367 SUPPORTING EFFECTIVE INSTRUCTION STATE GRANTS (FORMERLY IMPROVING TEACHER QUALITY STATE GRANTS) $23,939
10.582 FRESH FRUIT AND VEGETABLE PROGRAM $22,363
16.710 PUBLIC SAFETY PARTNERSHIP AND COMMUNITY POLICING GRANTS $19,560
17.278 WIOA DISLOCATED WORKER FORMULA GRANTS $14,374
17.801 JOBS FOR VETERANS STATE GRANTS $14,249
16.203 PROMOTING EVIDENCE INTEGRATION IN SEX OFFENDER MANAGEMENT DISCRETIONARY GRANT PROGRAM $12,229
17.225 UNEMPLOYMENT INSURANCE $9,665
66.818 BROWNFIELDS MULTIPURPOSE, ASSESSMENT, REVOLVING LOAN FUND, AND CLEANUP COOPERATIVE AGREEMENTS $8,478
84.173 SPECIAL EDUCATION PRESCHOOL GRANTS $8,097
20.616 NATIONAL PRIORITY SAFETY PROGRAMS $5,784
10.579 CHILD NUTRITION DISCRETIONARY GRANTS LIMITED AVAILABILITY $5,464
17.285 REGISTERED APPRENTICESHIP $4,340
84.196 EDUCATION FOR HOMELESS CHILDREN AND YOUTH $3,517
84.287 TWENTY-FIRST CENTURY COMMUNITY LEARNING CENTERS $2,128
84.048 CAREER AND TECHNICAL EDUCATION -- BASIC GRANTS TO STATES $1,314
17.259 WIOA YOUTH ACTIVITIES $390