Finding 26357 (2022-004)

Significant Deficiency
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2023-03-14

AI Summary

  • Core Issue: Incorrect allocation of compensation payments to a funding source that does not permit such costs, leading to potential inaccuracies in federal grant reporting.
  • Impacted Requirements: Compliance with CFR 200.430, which mandates accurate records for salary and wage charges to federal awards.
  • Recommended Follow-Up: Implement weekly timesheets with CEO approval, detailing time spent on each grant to ensure accurate cost allocation.

Finding Text

#2022-004 ? Significant Deficiency ? Allowable Costs Community Service Block Grant, CFDA # 93.569 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?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.? Condition During the course of the audit, it was determined certain compensation payments were incorrectly allocated to a funding source which did not allow for that type of compensation. This administrative error was corrected. Cause The cause is the result of human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of compensation payments allocated to the federal grant. Questioned Costs Questioned costs amount to $27,727. Perspective Information This finding was consistent for the fiscal year. Identification as a repeat finding There was no single audit requirement in the prior year and therefore, this finding is not reported as a repeated finding. Recommendation We recommend maintaining weekly timesheets with CEO approval, itemized by time allocated per grant. The financial statement records should be supported by direct time allocated to the grant as indicated on the approved timesheets. View of Responsible Official CAAP will do its due diligence in appropriately allocating costs should similar costs be incurred.

Corrective Action Plan

CORRECTIVE ACTION PLAN February 16, 2023 Community Action Association of Pennsylvania respectfully submits the following corrective action plan for the year ended June 30, 2022. Cognizant or Oversight Agency for Audit: Community Service Block Grant Program Name and address of independent public accounting firm: Hamilton & Musser, PC 176 Cumberland Parkway Mechanicsburg, PA 17055 Audit Period: July 1, 2021 ? June 30, 2022 The findings from the June 30, 2022 schedule of findings and questioned costs are discussed below. The findings are numbered consistently with the number assigned in the schedule. Findings ? Financial Statement Audit Significant Deficiencies #2022-001 ? Significant Deficiency ? Segregation of Duties Recommendation We recommend someone other than the Finance Director, preferably the CEO or another office staff, open the mail and record/scan the checks received into a check log. View of responsible officials and planned corrective action The Executive Administrative Assistant is now tasked with and responsible for opening the mail and recording the checks into a check log. The Executive Administrative Assistant will forward checks to the financial services team for additional action steps. #2022-002 ? Significant Deficiency ? Authorization and Approval Recommendation We recommend that all credit card charges are matched to a receipt and reviewed and approved by both the Board President and Board Treasurer, as is the policy with other payables/disbursements. This eliminates the risk associated with having the CEO issue approval over his own credit card charges. View of responsible officials and planned corrective action All credit card receipts will be submitted by the CEO or appropriate staff member to the financial services team. Credit card reconciliation documentation and appropriate receipts will be provided to the Board Treasurer for regular review. -28- Findings ? Financial Statement Audit (Continued) #2022-003 ? Significant Deficiency ? Authorization and Approval Recommendation Non-cash journal entries make it easy for organizations to overstate their revenue or understate their expenses with unsubstantiated accruals/deferrals. We recommend that all journal entries be authorized and approved by the CEO prior to entry. View of responsible officials and planned corrective action As noted, this is no longer an issue with internal controls having been corrected as of December 31, 2021. All non-recurring journal entries will be approved by the CEO. Findings ? Federal Award Programs Audit Community Service Block Grant, CFDA #93.569 #2022-004 ? Significant Deficiency ? Allowable Costs Recommendation We recommend maintaining weekly timesheets with CEO approval, itemized by time allocated per grant. The financial statement records should be supported by direct time allocated to the grant as indicated on the approved timesheets. View of responsible officials and planned corrective action CAAP will do its due diligence in appropriately allocating costs should similar costs be incurred. If the Community Service Block Grant Program has questions regarding this plan, please call Community Action Association of Pennsylvania Chief Executive Officer Beck Moore at 717-233-1075 extension 12.

Categories

Questioned Costs Allowable Costs / Cost Principles Reporting Significant Deficiency

Other Findings in this Audit

  • 26354 2022-001
    Significant Deficiency
  • 26355 2022-002
    Significant Deficiency
  • 26356 2022-003
    Significant Deficiency
  • 26358 2022-001
    Significant Deficiency
  • 26359 2022-002
    Significant Deficiency
  • 26360 2022-003
    Significant Deficiency
  • 26361 2022-004
    Significant Deficiency
  • 602796 2022-001
    Significant Deficiency
  • 602797 2022-002
    Significant Deficiency
  • 602798 2022-003
    Significant Deficiency
  • 602799 2022-004
    Significant Deficiency
  • 602800 2022-001
    Significant Deficiency
  • 602801 2022-002
    Significant Deficiency
  • 602802 2022-003
    Significant Deficiency
  • 602803 2022-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.569 Community Services Block Grant $733,946