Finding Text
2025-002 Significant Deficiency in Internal Controls Over Noncompliance and Noncompliance over Major Programs Criteria Internal controls and other compliance knowledge should support the wages billed to the federal award. Per 2 CFR 200.430(g)(1), "charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed" and "be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable and properly allocated." Condition Internal control and adherence to compliance were not followed with regards to records that accurately reflect the work performed. Questioned costs Total questioned cost of $1,277 based on the payroll transactions tested for one employee that were not accurately supported with records that reflected the work performed. Context During our payroll testing, of the ten payroll transactions we tested, one employee had two payroll transactions that indicated the wages billed to the federal award were not accurately supported by the employee's timesheet. We expanded our payroll testing and sampled four additional transactions for this employee. Of the six total payroll transactions tested for this employee, none of them were accurately supported by their timesheet for hours worked on the federal award. Cause The error was caused by not applying adequate number of controls necessary for billing wage expenses to the federal award. Effect The Federal award was incorrectly charged with unreasonable wages. Repeat Finding No. Auditor's Recommendations We recommend that Chamber implement stronger internal controls over billing wage expenses to the federal award.