Federal Agencies: U.S. Department of Agriculture Federal Program Names: Child and Adult Care Food Program Assistance Listing Numbers: 10.558 Pass-Through Agency: Commonwealth of Pennsylvania, Department of Education Pass-Through Number: 359-46-477-8 Award Period: July 1, 2024 through June 30, 2025 Type of Finding: • Material Weakness in Internal Control over Compliance and Other Matters Criteria: Under the Uniform Guidance, costs charged to a federal award must be necessary, reasonable, allocable, consistent with the entity’s established policies, incurred during the award period, and adequately documented. In accordance with 2 CFR 200.403 and 2 CFR 200.430, payroll costs are allowable only when they are properly authorized and supported by records that accurately reflect the work performed. Accordingly, employee hours, including personal time off and overtime, should be recorded and compensated in the appropriate period based on the related time and effort performed. Condition: As part of our audit procedures, we selected a sample of 60 payroll transactions for review. Our testing included examining employee human resource files, including signed W-4 and I-9 forms, approved pay rates, timesheets with supervisory approval, and related payroll reports. We recalculated hours and compensation based on approved pay rates and compared the results to the payroll reports. During our review, we noted that management did not record and compensate all employee hours in the appropriate period based on the time and effort performed. Specifically, two employees were not properly compensated for one day of personal time off and 1.12 hours of overtime related to the administration of the CBS Food Program. These amounts were subsequently adjusted and paid in a later period. Questioned Costs: None Cause: Management did not consistently maintain and enforce internal controls over payroll documentation, review, and follow-up to ensure that payroll amounts, including personal time off and overtime, were accurately calculated, approved, and paid in the correct period. Although payroll support was maintained and available for audit, the review process did not identify the compensation differences before payroll was finalized, and the errors were not corrected until a subsequent period. Effect: Without proper documentation, approval, and timely review of payroll calculations, the Organization may charge unallowable, inaccurate, or inadequately supported compensation to the federal program. Payroll changes and compensation amounts, including personal time off and overtime, could be processed without appropriate authorization or correction in the proper period, increasing the risk of errors, unauthorized transactions, noncompliance with Uniform Guidance compensation requirements, and potential questioned costs. Repeat Finding: No Recommendation: We recommend that management strengthen its payroll review controls to ensure that employee compensation, including personal time off and overtime, is accurately calculated, reviewed, approved, and paid in the appropriate period. The review should include comparing approved timesheets, pay rates, payroll reports, and any leave or overtime documentation before payroll is finalized. Management should also document its review and establish a follow-up process to identify and correct payroll discrepancies timely. Views of Responsible Officers and Corrective Action Plan: Please refer to Community Benefit Solutions dba CBS Food Program’s Corrective Action Plan.