Finding 28456 (2022-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-06-26

AI Summary

  • Core Issue: Payroll process controls need improvement to ensure accurate reporting of personnel expenses.
  • Impacted Requirements: Compliance with 2CFR 200.430, which mandates accurate records for federal program charges.
  • Recommended Follow-up: Review and adjust the payroll control process to identify discrepancies between charged amounts and personal activity reports.

Finding Text

2022-001: Controls over the payroll process should be enhanced. Type: Significant deficiency in internal control over compliance Assistance Listing Number, Federal Agency, Program Name, Program Title, Pass-through Grantor, and Pass-through Name and Grant Number: Assistance Listing #93.044, U.S. Department of Health and Human Services, Passed Through Area Agency on Aging, Special Programs for the Aging-Grants for Supportive Services and Senior Centers, Title III, Part B - Chore, 20-9046-C Criteria: Per 2CFR 200.430, personnel expenses that are charged to a federal program must, among other things, be based on records that accurately reflect the work performed. Condition: During our testing of payroll charged to the program, we noted differences between the personal activity reports and the amount charged to the program. Cause: The Council?s calculation of the allocation of wages to the program did not include essential pay or opt-out compensation as part of the hours worked. Context: Four (4) out of seven (7) personal activity reports tested for the Chore program differed from the amount charged to the program. Effect: No financial effect since the Council charges less than 100% of the eligible salaries, wages, and payroll taxes to the Chore program. Recommendation: The control process should be reviewed and modified appropriately so that control would be established to note any differences between the amounts being charged and personal activity reports.

Corrective Action Plan

View of responsible officials and planned corrective action: Due to inaccuracies in the preparation of the monthly payroll journal entry, the Agency is establishing new internal controls. The Agency Accountant has developed a spreadsheet that accurately logs the hours staff works in certain programs. This will result in percentage that will be used by the Accounting Assistant to accurately charge the correct program on the payroll journal entry spreadsheet. Once this is completed each month, the Agency Accountant will review the payroll journal entry for accuracy and that it matches the percent breakdowns given.

Categories

Allowable Costs / Cost Principles Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 604898 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
20.509 Formula Grants for Rural Areas and Tribal Transit Program $263,516
93.045 Special Programs for the Aging_title Iii, Part C_nutrition Services $240,851
93.053 Nutrition Services Incentive Program $220,376
93.052 National Family Caregiver Support, Title Iii, Part E $28,346
94.011 Foster Grandparent Program $23,989
93.044 Special Programs for the Aging_title Iii, Part B_grants for Supportive Services and Senior Centers $4,250