Finding Text
Finding No. 2025-001: Activities Allowed or Unallowed and Allowable Costs/Cost Principles – Significant Deficiency over Major Program and Compliance. Federal Program Name: Juvenile Mentoring Program Pass-through Entity: None Federal Assistance Listing Number: 16.726 Criteria Title 2 U.S. Code of Federal Regulations Part 200 includes the requirement that charges to federal awards for salaries and wages be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives. Condition The Partnership allocates employees’ payroll costs to grants based on an estimate. Although the payroll allocation is periodically reviewed and revised, differences from actual time and effort can result due to an estimate being used. Cause Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Documentation of personnel expenses should support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Effect The employee time and payroll costs that are charged to the grant could differ from the actual time and payroll costs expended in support of the grant activities. Questioned Costs Unknown. Context The recipient's system of internal controls should include processes to perform periodic after-the-fact reviews of interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Recommendation We recommend that the Partnership develop, implement and maintain a system of internal controls to support the proper tracking and allocation of wages to federal awards. Management’s Response/View of Responsible Officials Management agrees with this finding, see the Corrective Action Plan.