Finding Text
CRITERIA Under the Uniform Guidance, non-federal entities are required to maintain records that accurately reflect the work performed, and payroll costs must be supported by timesheets or other approved documentation that records the actual time worked on federal awards. CONDITION AND CONTEXT UHU did not maintain adequate time records to support amounts charged to the general ledger for payroll costs. For ALN 93.914, payroll allocations to federal awards were based on the original award budget, rather than actual time worked, and UHU did not track personnel time using timesheets or other acceptable records to re-allocate effort each month. While timesheets were maintained for clocking in and out, they did not identify the specific grants, projects, or activities employees worked on. Our audit included internal control testing over a random sample of expenditures and found insufficient support for payroll costs charged to federal programs. Additionally, for certain grants within the Research and Development cluster, we were unable to obtain any time records or time certifications attached to support payroll charges. CAUSE UHU’s current policies do not require employees to complete timesheets with details specifying which grants or funding sources they worked on during each pay period. As a result, payroll is allocated based on budget estimates rather than actual time worked on specific grants. EFFECT OR POTENTIAL EFFECT Failure to maintain adequate time and effort documentation increases the risk of unallowable costs being charged to federal programs, potential questioned costs, and noncompliance with federal regulations. RECOMMENDATION We recommend that UHU implement policies and procedures requiring all employees whose salaries are charged to federal awards to complete timesheets or other acceptable records that specify the actual time worked on each grant or funding source during each pay period. This will ensure that payroll allocations are based on actual effort expended, provide adequate support for amounts charged to federal programs, and help maintain compliance with federal regulations.