Finding Text
Finding Reference: 2025-001 – Allowable Costs/Cost Principles Federal Agency: U.S. Department of the Treasury Federal Program: 21.027 – COVID-19 Coronavirus State and Local Recovery Funds Compliance Requirement: Allowable Costs/Cost Principles Type of Finding: Material Weakness in Internal Control Over Compliance – Allowable Costs/Cost Principles Criteria: The District is required to charge federal awards for salaries and wages based on records that accurately reflect the work performed and are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The District should maintain procedures for documenting, reviewing, and approving employee time charged to federal programs. Statement of Condition: York County Conservation District’s procedures for tracking employee time charged to the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program were not adequately designed or implemented. Employees self-reported hours worked on grant-funded activities in a shared spreadsheet, and management did not perform a documented review or verification of the reported hours. Statement of Cause: York County Conservation District did not design and implement effective controls to ensure employee time charged to the federal award was independently reviewed and approved. Possible Asserted Effect: The lack of supervisory review and verification of employee time charged to the federal award increased the risk that material noncompliance with federal requirements could occur and not be detected in a timely manner. Questioned Costs: None noted. Context: During our review of internal controls over compliance related to payroll costs charged to the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program, we noted that all employees whose salaries were charged to the grant reported hours worked using a shared spreadsheet. The reported hours were used to allocate payroll costs to the federal award without documented supervisory review or verification. Repeat Finding: This is not a repeat finding. Recommendation: We recommend management strengthen internal controls over payroll costs charged to federal awards by implementing documented supervisory review and approval procedures for employee time records and maintaining sufficient approval for hours charged to grant-funded activities. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. The District will implement procedures requiring supervisory review and approval of all employee time charged to the SLFRF program. Employees will maintain supporting documentation for grant-related activities, and management will perform and document periodic reviews to verify that reported hours are accurate, adequately supported, and allocable to the grant. These procedures will help ensure payroll costs charged to the SLFRF program comply with federal requirements.