Criteria - 2 CFR 200.430(i) requires the auditee to establish and maintain effective internal control over the allocation of personnel expenses whereby charges to Federal awards for personnel-related expenditures are supported by official records of the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: The non-federal entity's system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustments must be made such that the final amount charged to the Federal award is accurate.
Condition – Personnel costs allocated to the award did not agree to time and effort reports maintained for those employees charged to the award.
Cause – PPHS does not have a process whereby time and effort reports are reconciled to payroll allocated to federal awards.
Effect – Time and effort reports documented that 100% of employee time should have been allocated to the award. However, some employees wages were only partially allocated to the award.
Corrective Action Plan – PPHS had significant turnover in finance personnel during the 22-23 school year. For FY23, we contracted with accounting consultants to assist with financial management and reporting and with improving processes and procedures, including reconciling personnel costs with grant claims. We will continue to improve our process for reconciling personnel costs allocated to federal awards with time and effort reports.
Contact Person(s) Responsible for CAP – Todd Burleson, Financial Controller.
Anticipated completion date – Processes were improved in FY23 through assistance from accounting consultants. Policies and procedures updates will be implemented in FY24.