Finding Text
Type of Finding: Significant Deficiency in Compliance and Internal Control over Compliance Federal Agency: Department of Housing and Urban Development; Department of Veterans Affairs Federal Program Name: Emergency Solutions Grant Program; Veterans Affairs Supportive Services for Veteran Families Program Assistance Listing Number: 14.231; 64.033 Federal Award Identification Number and Year: 14.231: HCS-24-31-2401-007, HCS-23-32-2301-007, HCS-24-32-2401-007, SC-111170, CW2254906, CW2259491, SC-111171 64.033: 20-WA-146 - 10/1/23-9/30/26, 2020-WA-146-LT - 8/19/22-9/30/26 Pass-Through Agency: 14.231: Snohomish County Office of Housing, Homelessness & County Development, City of Tacoma, Pierce County Human Services 64.033: N/A – Direct Pass-Through Number(s): 14.231: HCS-24-31-2401-007, HCS-23-32-2301-007, HCS-24-32-2401-007, SC-111170, SC-111171, CW2259491, CW2254906 64.033: N/A – Direct Award Period: 14.231: July 1, 2024 – June 30, 2025; October 1, 2023 – September 30, 2024; October 1, 2024 – September 30, 2025; November 1, 2022 – December 31, 2024; July 1, 2024 – June 30, 2026 64.033: October 1, 2023 – September 30, 2026; August 19, 2022 – September 30, 2026 Criteria or specific requirement: 2 CFR 200.430(g)(1) - "Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (i) be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated." Condition: 14.231: 2 of 40 payroll expenditures tested was not subject to the timely use of internal control process that reasonably assures that the payroll charges were accurate, allowable, and properly allocated. For 64.033, there was 2 of 40 payroll expenditures tested that lacked appropriate and timely review. In total, there were 4/80 payroll transactions that lacked adequate documentation of the key control. Questioned costs: None Context: 14.231: During testing of payroll disbursements CLA noted that one employee's timecard was not approved by a manager for one pay period in September 2024. The internal control was eventually performed in November 2024, 44 days after CLA would expect to see management review & approval of the employees’ timecard. A second employee's timecard showed timecard review but not approval. 64.033: During testing of payroll disbursements CLA noted that 2 samples had timecards that were not subject to timely review & approval (lack of internal control). Cause: The lack of timely approval appears to have occurred due to an oversight by the person responsible for performing the internal control. Additionally, there was no internal process for ensuring that the internal control was performed by a different employee if the original employee responsible for performing the control separated from the entity. Upon separation of a manager who is responsible for performing this control, a temporary manager with sufficient knowledge of the employee's work, programs worked, and program requirements should be assigned to perform the control to ensure compliance with allowable costs and accurate billing of payroll expenses. Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging the federal grant, which may result in penalties or repayment obligations. Repeat Finding: 2024-002 Recommendation: CLA recommends implementing a process that ensures the control is performed timely by an alternative employee with sufficient understanding of the program requirements to accurately review and approve cost allocations that meet documented time and effort spent on each program. This will include ensuring an appropriate timesheet reviewer is assigned, and that an appropriate back-up reviewer is available. Views of responsible officials: There is no disagreement with the audit finding.