Finding 2238 (2022-006)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-11-20
Audit: 3817
Organization: Enlace Chicago (IL)

AI Summary

  • Core Issue: Lack of documentation for payroll allocation and absence of timesheet approvals, leading to a material weakness in internal controls over compliance.
  • Impacted Requirements: Failure to meet federal guidelines for allowable costs and internal controls as outlined in 2 CFR 200.
  • Recommended Follow-Up: Ensure adherence to policies for employee cost allocation, maintain all supporting documentation, and implement sign-off procedures for timesheets.

Finding Text

Finding 2022-006 – Payroll Allocation Federal Agency: U.S. Department of Treasury Federal Program Name: Immigrant And Refugee Housing Assistance Project Assistance Listing Number: 21.023 Pass-Through Agency: Illinois Department of Human Services Pass-Through Number: FCSAK05923 Award Period: July 1, 2021 through June 30, 2022 Federal Agency: U.S. Department of Education Federal Program Name: 21st Century Community Learning Centers Assistance Listing Number: 84.287 Pass-Through Agency: Illinois State Board of Education Pass-Through Number: 21-4421-25-65-108-9335-51, and 22-4421-25-65-108-9335-51 Award Period: July 1, 2021 through June 30, 2022 Type of Finding: Material Weakness in Internal Control over Compliance Criteria or Specific Requirement: Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR 200 states that changes to awards for salaries and wages are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. The Organization is required to maintain documentation supporting the time and effort spent by employees toward the efforts of the Federal program. Condition: Through audit procedures performed, we noted that there was no supporting documentation for the payroll allocation process to different funding sources and no evidence of timesheet approval as per the client's key control. Questioned Costs: None Context: We noted that there was no supporting documents for the payroll allocation process to different funding sources and no evidence of timesheet approval as per the client's key control. Cause: The Organization changed payroll providers between the fiscal years under audit and the time that fieldwork was performed, and was unable to go back and pull the relevant time sheets. Additionally, back-up was not maintained for the allocation process. Effect: Not maintaining the documentation for internal controls may result in inaccurate vouchers submitted for federal funds. Inaccurate payroll costs may be charged to federal programs. Repeat Finding: The finding is a repeat finding in the immediately prior year. Prior year finding number was 2021-005. Recommendation: We recommend that management follow established policies and procedures for the allocation of employee costs across the Organization's grants and programs. All supporting documentation of time sheets and allocation procedures should be maintained. Additionally, preparer and reviewer sign-offs should be documented with sign-offs and dates. Views of Responsible Officials and Planned Corrective Actions: There is no disagreement with this finding. Enlace Chicago was unable to provide timesheets to our auditors for FY21 as we transitioned payroll providers in December of 2021. Despite assurances from the prior provider, at the time of request, they were unable to produce prior period timesheets. Despite our inability to generate the timesheets requested, Enlace Chicago requires all staff to complete timesheets in order to process payroll. Providing timesheets for future periods will not be an issue moving forward. Name of the contact person responsible for corrective action: Laura Velazquez, Director of Budget and Planning Planned completion date for corrective action plan: June 30, 2023.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 2232 2022-006
    Material Weakness Repeat
  • 2233 2022-006
    Material Weakness Repeat
  • 2234 2022-006
    Material Weakness Repeat
  • 2235 2022-007
    Significant Deficiency Repeat
  • 2236 2022-008
    Significant Deficiency
  • 2237 2022-008
    Significant Deficiency
  • 2239 2022-008
    Significant Deficiency
  • 578674 2022-006
    Material Weakness Repeat
  • 578675 2022-006
    Material Weakness Repeat
  • 578676 2022-006
    Material Weakness Repeat
  • 578677 2022-007
    Significant Deficiency Repeat
  • 578678 2022-008
    Significant Deficiency
  • 578679 2022-008
    Significant Deficiency
  • 578680 2022-006
    Material Weakness Repeat
  • 578681 2022-008
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $449,658
93.268 Immunization Cooperative Agreements $122,622
93.319 Outreach Programs to Reduce the Prevalence of Obesity in High Risk Rural Areas $122,588
84.287 Twenty-First Century Community Learning Centers $72,023
14.218 Community Development Block Grants/entitlement Grants $37,743
21.027 Coronavirus State and Local Fiscal Recovery Funds $28,310