Finding 2965 (2022-004)

Federal Agency: Department of Treasury Federal Program Name: Coronavirus State and Local Recovery Funds Federal Award Identification Number and Year: 03-22-001-0001-0001 - 2022 Pass-Through Agency: Thurston County Pass-Through Number: None Award Period: March 1, 2021 to December 31, 2025 Type of Finding: Significant Deficiency in Internal Control and Compliance over Major Programs Criteria or Specific Requirement: Internal controls and other compliance knowledge should prevent the incorrect coding of employee hours worked. Per 2 CFR § 200.430(i)(1), "charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition: Internal controls and adherence to compliance were not followed with regards to an appropriate level of approval of management that is charged to the Coronavirus State and Local Recovery Funds program. Questioned costs: Total questioned cost of $2,983 based on two payroll transactions tested that were not approved at the appropriate level but were charged to the Coronavirus State and Local Recovery Fund grant (ALN 21.027), contract number 03-22-001-0001-0001. Context: During our payroll testing, of the two Executive Director timesheets tested, both didn't show a secondary control offsetting the program manager and for one item, there was no proof of approval at all. Cause: The error was caused by not applying an adequate amount of controls necessary for an executive director's time. For the lack of evidence of review, this likely was caused by an oversight (timesheet shows evidence of review, just no initials). Effect: The Coronavirus State and Local Recovery Funds program and other Federal programs could be incorrectly charged. Recommendation: CLA recommends that the program manager and a member of the finance committee knowledgeable about 2 CFR § 200.430(i)(1) review the executive director costs charged to the Coronavirus State and Local Recovery Funds program. View of Responsible Official: There is no disagreement with the audit finding. Management’s response and corrective action plan is attached to our report.