Finding 31681 (2022-002)

Significant Deficiency Repeat Finding
Requirement
ABH
Questioned Costs
-
Year
2022
Accepted
2023-03-29

AI Summary

  • Core Issue: Met Council failed to implement effective internal controls over federal awards, leading to inadequate documentation for invoice and payroll approvals.
  • Impacted Requirements: Compliance with 2 CFR 200.303(a) and internal control standards as per the Treadway Commission framework.
  • Recommended Follow-Up: Ensure timely and effective operation of controls over payroll and expenditures, and maintain proper documentation to verify compliance.

Finding Text

Federal Agency: U.S. Department of Treasury Assistance listing number: 21.023 ? COVID-19 Emergency Rental Assistance Program Compliance requirements: Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Period of Performance Criteria: In accordance with 2 CFR 200.303(a), Met Council must establish and maintain effective internal controls over Federal awards. The internal controls established should be in compliance with the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and properly documented. Condition and Context: During our procedures, we noted the following instances when internal controls were not implemented in accordance with Met Council's policies: 1. One out of 60 invoices tested did not have documentation of approval by the appropriate individual indicating the purchase was proper. 2. 12 out of 60 invoices tested did not have documentation of review that the cost was allowable under the agreement and Uniform Guidance requirements. 3. Six out of 13 payroll reports tested did not have formal documentation of review and approval. We note that the deficiency was initially identified during the performance of the fiscal year 2021 audit procedures and the notification of this deficiency was first reported to management in May 2022 and therefore, resulted in a repeat finding. Cause: Internal controls over payroll and other than personnel services expenditures were not properly documented. Effect: Costs charged to the program may not be allowable under Uniform Guidance. Identification as a repeat finding: Yes - Finding 2021-002 Questioned costs: $0. Recommendation: We recommend that Met Council ensures the controls designed over payroll and other than personnel services expenditures are operating effectively and in a timely manner, and that Met Council maintains evidential proof the control was performed.

Corrective Action Plan

This is a repeat finding that was only first reported to Met Council at the end of the fiscal year covered by this audit. As such, the finding could not possibly have been corrected until fiscal year 2023. The policies to ensure the accuracy of our payroll and accounts payable processes were immediately adopted after the receipt of the fiscal year 2021 audit recommendation at the end of the 2022 fiscal year. As a result, our recommended course of action, as stated below, remains unchanged from the prior year: Payroll Review Electronic timesheets are completed and submitted by employees through the payroll system. All timesheets must be approved electronically by an employee's supervisor. The Senior Human Resources Manager, Benefits, reviews and signs the preprocessing payroll register prior to submission. Once approved the Payroll/Human Resources Administrator submits the payroll to the payroll administrator for processing. The Payroll/Human Resources Administrator sends the signed preprocessing register by email to the Managing Director of Human Resources, the Controller, and the Senior Budget Director listing all the exceptions for the current payroll. The Fiscal Project Manager then, through the payroll administrator, will generate a salary summary that includes a listing of the prior payroll and the current payroll indicating any differences. The fiscal project manager then sends the last page of the processed payroll register along with the salary summary to the Managing Director of Human Resources and the Controller for their review and signature approval. The payroll journal entry is generated by the Fiscal Project Manager and uploaded into the accounting software for review and approval by the Controller. Accounts Payable ("AP") Review The AP Accountant saves a PDF of each invoice (whether received electronically or on paper) and sends an email together with the invoice to the respective program director for approval. The program directors approve and code the invoices by signature which they then email back to the AP team for processing. When an invoice is coded to be charged to a grant ? the invoice is also placed in a folder by date on the shared drive for the Budget Department to review and approve the grant coding on each invoice. Once the coding is initialed and dated by the Senior Director of Budgets and Grants, it is entered into our accounting software for AP processing.

Categories

Allowable Costs / Cost Principles Procurement, Suspension & Debarment Period of Performance

Other Findings in this Audit

  • 31682 2022-002
    Significant Deficiency Repeat
  • 608123 2022-002
    Significant Deficiency Repeat
  • 608124 2022-002
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
14.218 Community Development Block Grants/entitlement Grants $375,000
10.569 Emergency Food Assistance Program (food Commodities) $258,023
97.024 Emergency Food and Shelter National Board Program $110,178
21.023 Emergency Rental Assistance Program $94,749
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $34,961
14.157 Supportive Housing for the Elderly $5,846
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $370