Finding Text
Federal Agency: U.S. Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds (Eviction Rental Assistance Program 2.0) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP0002 2022 Pass-Through Agency: Washington State Department of Commerce Pass-Through Number(s): 21-4619C-104 Award Period: 10/1/2021 - 6/30/2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: Uniform Guidance 2 CFR §200.430(i) requires that charges to Federal awards for salaries and wages be based on records that accurately reflect the work performed and be supported by a system of internal controls which provides reasonable assurance that charges are accurate, allowable, and properly allocated. Further, 2 CFR §200.303(a) requires the auditee to establish and maintain effective internal control over Federal awards to ensure compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: The auditee did not maintain adequate internal controls to ensure that employee pay rates charged to Federal awards were appropriately approved and documented. Specifically, documentation supporting management approval of pay rates was not consistently maintained. In addition, for one payroll disbursement tested, the auditee did not maintain a required timesheet supporting the allocation of payroll costs charged to the Federal award, resulting in a lack of adequate time‑and‑effort documentation. Context: All 27 samples lacked payrate approvals and 1 sample of 27 lacked proper timesheet documentation. Cause: Although the auditee has established procedures related to the approval and documentation of disbursements, these procedures were not consistently performed or documented. Management did not consistently ensure that required approvals and supporting documentation were obtained and retained prior to charging costs to federal awards. Effect: The auditee lacked sufficient internal control over payroll costs charged to Federal awards, and payroll costs charged to the Federal award were not fully supported by required time‑and‑effort documentation in one instance. Repeat Finding: Yes. Recommendation: We recommend that the auditee implement procedures to ensure that all employee pay rates charged to Federal awards are appropriately approved and documented, and complete and accurate timesheets or equivalent time‑and‑effort records are maintained for all payroll costs charged to Federal awards. Views of responsible officials: Management agrees with the finding and has prepared a Corrective Action Plan.