Finding 369633 (2023-001)

2023‐001: Internal Controls Over Time and Effort Reporting Criteria: Federal and state award guidelines state that an employee who works, in whole or part, on a federal program or state project or cost objective must document their time and effort spent working on each federal program, state project, or cost objective. Condition: The Organization’s written policies for time and effort reporting should ensure that the actual percentages of employees’ time is recorded and documented by each funding source. Cause: The Organization’s system/process for the approval of timesheet records did not contain documentation of employees’ actual time per funding source. Effect: The Organization is not following federal and state compliance requirements of time and effort reporting for employees. Recommendation: We recommend that the Organization enhance its process to review and approve employees’ time and effort worked on federal programs and state projects. Employees who work solely on a single cost objective should furnish a semi‐annual certification that he/she has been engaged solely in activities that support the single cost objective. The certification should be reviewed and approved by the employees’ department head. Employees who work on multiple activities or cost objectives must complete a personnel activity report which demonstrates the amount of actual time spent working on the federal or state grant objectives, on at least a monthly basis. The personnel activity report should be approved by the department head. Management Response: The Organization will continue to strengthen our internal controls by having the employees complete the required Time and Effort certifications monthly or semiannually with further review and approval by the respective Department Heads. The employees will certify their monthly personnel activity reports indicating actual time spent working on multiple activities or cost objectives, while employees who worked on a single cost objective will submit semi‐annual Time and Effort certifications reviewed and approved by their Department Heads.