Finding Text
Federal Program: ALN 93.575 Child Care and Development Block Grant (CCDBG) Category: Compliance Compliance requirements: Allowable Costs / Cost Principles Record retention Condition: BGCPR did not maintain sufficient documentation to demonstrate compliance with minimum personnel qualification requirements. Criteria: Pursuant to 2 CFR §200.430(a)(2), costs of compensation are allowed only to the extent that the total compensation for individual employees follows an appointment made in accordance with the recipient's or subrecipient's laws, rules, or written policies Additionally, 2 CFR §200.303(a) requires recipients and subrecipients to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance of compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, 2 CFR §200.403(g) requires costs charged to Federal awards to be adequately documented. Moreover, pursuant to 2 CFR §200.334, recipients and subrecipients must retain all Federal award records, including financial records, supporting documentation, and statistical records, for a minimum of three years from the date of submission of the final financial report. If litigation, claims, or audit findings are initiated before the expiration of the retention period, the records must be retained until all such matters are resolved and final action has been taken. Context: During testing of four payroll-related transactions selected for Allowable Activities and Allowable Costs compliance testing, we noted that one sampled employee did not meet the minimum educational and experience qualifications established for the position. Cause: For one payroll-related item, the personnel file did not contain documentation demonstrating that the employee met the minimum educational and experience qualifications established for the position. The employee did not possess the required bachelor's degree at the time of promotion. Although management subsequently provided an undated narrative explaining the basis for the hiring decision, no supporting documentation evidencing an approved exception at the time of promotion was maintained in the personnel file. Questioned cost: Amount is below the threshold to be considered a questioned cost. Effect or potential effect: As a result, BGCPR could not demonstrate that the employee's appointment was made in accordance with its established hiring requirements. Consequently, compensation costs charged to the Federal award may not be fully supported as allowable. Recommendation: Ensure personnel files contain documentation demonstrating that employees meet the minimum qualifications for their positions and retain evidence of any approved exceptions or waivers supporting hiring or promotion decisions. Views of officials responsible: BGCPR will provide additional training and guidance to Human Resources personnel to ensure consistent adherence to the internal procedures established. Anticipated completion date: September 30, 2026