Finding Text
2023-003: Significant Deficiency in Internal Control Over Compliance – Program director cost allocation Department of the Interior Youth Engagement, Education, and Employment – Assistance Listing 15.676, Grant Period – year ended December 31, 2023 Condition: During our audit of the USFW program, we noted that Program Directors’ cost allocations were charged to the federal program, however the entity did not maintain documentation—such as time distribution records, personnel activity reports, or certifications—to support the allocation of the Program Directors’ time to the federal program. Criteria or specific requirement: Per 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Cause: The entity does not have a formal process in place to document or certify the time spent by Program Directors whose salaries are allocated to federal programs Effect: Without adequate documentation, there is a risk that unallowable personnel costs may be charged to the federal program. This could result in questioned costs or noncompliance with federal requirements. Questioned costs: Unknown. Although the allocation appeared reasonable, due to lack of documentation, the actual amount could not be verified. Recommendation: We recommend that the entity implement procedures to ensure that all Program Directors whose time is charged to federal programs maintain appropriate documentation. This may include periodic certifications for those working on a single federal program or time distribution records for those working on multiple activities. View of responsible officials and planned corrective action: NorthWoods management will train Program Directors to add a USFW code to their current time sheet tracking for all USFWS activities in September 2025. This will be reviewed regularly in current time sheet review procedures for accuracy. Semi-annually, program director match contributions will be reconciled from time sheet reports with the general ledger for USFW agreements by the Business Manager, and reviewed by the Program Directors. Northwoods management will obtain a review of matching contributions documentation procedures from a qualified non-profit accountant.