Finding Text
FINDING REFERENCE NUMBER 2024-021 (See Finding Reference Number 2024-002) FEDERAL PROGRAM (ALN – 96.001) SOCIAL SECURITY – DISABILITY INSURANCE U.S. SOCIAL SECURITY ADMINISTRATION AWARD NUMBERS 1804RQD100 (Federal Award Year: 10/1/2017 – 9/30/2018) 1904RQD100 (Federal Award Year: 10/1/2018 – 9/30/2019) 2004RQD100 (Federal Award Year: 10/1/2019 – 9/30/2020) 2104RQD100 (Federal Award Year: 10/1/2020 – 9/30/2021) 2204RQD100 (Federal Award Year: 10/1/2021 – 9/30/2022) 2304RQD100 (Federal Award Year: 10/1/2022 – 9/30/2023) 2404RQD100 (Federal Award Year: 10/1/2023 – 9/30/2024) ADMINISTRATION OFFICE OF THE SECRETARIAT COMPLIANCE REQUIREMENT ACTIVITIES ALLOWED OR UNALLOWED // ALLOWABLE COSTS/COSTS PRINCIPLES TYPE OF FINDING INERNAL CONTROL AND COMPLIANCE – SIGNIFICANT DEFICIENCY AND NONCOMPLIANCE CRITERIA Uniform Guidance at 2 CFR 200 Subpart E §200.403, Factor affecting allowability of costs, establishes that: “Except where otherwise authorized by statute, costs must meet the following criteria to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the recipient or subrecipient. (d) Be accorded consistent treatment. For example, a cost must not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for State and local governments and Indian Tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing requirements of any other federally financed program in either the current or a prior period. See § 200.306(b). (g) Be adequately documented. See §§ 200.300 through 200.309.” STATEMENT OF CONDITION As part of our audit procedures over payroll transactions, we requested 25 employee files. The inspection of personnel files we noted the following deficiencies: 1. Evidence of the current wage was not observed in nine (9) files. 2. Evidence of the job description was not observed in ten (10) files. 3. We were unable to validate the accounting distribution of the salary in ten (10) files. 4. Evidence regarding documentation related to employment applications, certificates of no penal records, social security, and others were not available in the twenty-five (25) files requested. QUESTIONED COSTS None. PERSPECTIVE INFORMATION This deficiency is systemic. The failure to maintain copies of employee files violates state and federal regulations and prevents the validation of wages paid with federal funds. The sample was a statistically valid sample. STATEMENT OF CAUSE According to state and Federal standards, the Secretariat does not keep the proper internal controls over personnel records in order to make the files available for inspection. POSSIBLE ASSERTED EFFECT The absence of required documentation, may result in noncompliance with applicable laws, regulations, and the Agency established requirements. Additionally, it may increase exposure to operational and legal risks and restricts the Agency ability to prove that workers are allowed to work and fulfill minimal qualifications. IDENTIFICATION OF REPEAT FINDING No reported as prior audit finding. RECOMMENDATIONS In order to guarantee that all necessary documentation is correct, comprehensive, and appropriately stored in compliance with established criteria, we recommend that the Agency tighten controls over the upkeep of personnel files. This should entail conducting regular checks of personnel files, using established procedures to confirm completeness, and making sure that any missing paperwork is quickly acquired and filed.