Finding Text
Agency: U.S. Department of Education and U.S. Department of the Treasury Federal Assistance Listing Number: 84.215N Innovative Approaches to Literacy; Promise Neighborhoods; Full-Service Community Schools; and Congressionally Directed Spending for Elementary and Secondary Education Community Projects; 21.027 COVID-19 Coronavirus State and Local Fiscal Recovery Funds Award Year: 2025 Pass-Through Entity: State of Connecticut Judicial Branch Office, City of Hartford, State of Connecticut Department of Public Health, State of Connecticut Department of Social Services, State of Connecticut Department of Mental Health and Addiction Services, State of Connecticut Department of Children and Families, State of Connecticut Department of Housing Repeat finding and prior year finding number: 2024-002 Criteria: In accordance with 2 CFR §200.430(i) of the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), compensation for personal services charged to federal awards must be based on records that accurately reflect the work performed. When budget estimates are used for interim accounting purposes, they must: produce reasonable approximations of the activity actually performed, be reconciled to actual effort on a regular basis, and be adjusted in a timely manner to reflect significant changes in work activity. Documentation may include timesheets, effort certifications, payroll distribution reports, and other personnel activity records, and must be reviewed and approved by authorized personnel. Condition and Context: During our testing of payroll costs charged to the major federal programs, we selected 51 payroll transactions and noted that a documented hindsight review comparing actual employee effort to budgeted payroll allocations was not completed for any of the 51 selections tested. While the required hindsight review was not completed for the selections tested, there was evidence that the employees performed work on the applicable federal awards, and the amounts allocated were generally consistent with budgeted allocations. The sample was statistically valid. Questioned Costs: We were unable to quantify an amount of questioned costs. While a time and effort reporting was lacking for the items included in our sample, there was evidence of work performed on the grants and the amounts allocated aligned closely to the budget. Therefore, we were unable to quantify the amount of questioned costs. Cause: The Medical Center changed its procedures for documenting employee time allocations; however, formal processes were not established to document and regularly reconcile actual hours worked to budgeted allocations. As a result, hindsight reviews were not formally maintained to verify that payroll allocations were supported by employees' actual work performed. Effect: The lack of documentation of hindsight review increases the risk of inaccurate payroll cost allocations and potential noncompliance with federal grant requirements. Recommendation: The Medical Center should update its policies and procedures to require and document a formal hindsight review of employee working hours. This review should verify that actual hours worked align with budgeted hours, particularly in cases where payroll costs are allocated across multiple grants. The updated procedures should include clear guidelines for conducting and retaining evidence of such reviews to support accurate cost allocations and ensure compliance with federal grant requirements.