Finding 370319 (2023-001)

Material Weakness
Requirement
AB
Questioned Costs
$1
Year
2023
Accepted
2024-02-23

AI Summary

  • Core Issue: CAP lacks a consistent internal control system for tracking and approving salaries and costs charged to the COVID-19 grant, leading to unverified and questioned costs of $17,393.
  • Impacted Requirements: Missing documentation and approvals violate federal guidelines for allowable costs and personnel expense tracking, as outlined in Uniform Guidance 2 CFR part 200.430.
  • Recommended Follow-up: CAP should enhance its policies and procedures for payroll and grant transactions, leveraging new software and training to ensure compliance and proper documentation.

Finding Text

2023-001 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Program: COVID-19 Emergency Rental Assistance Program Federal Assistance Listing No: 21.023 County Recipient: Community Action Partnership of Natrona County (CAP) Federal Agency: U.S. Department of the Treasury Grant year: 2023 Federal Award Identification: Unknown Applicable Pass-through Entity: Wyoming Department of Family Services Criteria Accounting practices of the non-Federal entity must provide for adequate documentation to support costs charged to the Federal award. Additionally, standards for documentation of personnel expenses in Uniform Guidance 2 CFR part 200.430 Compensation – personal services state that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Among various other requirements, these records must: • Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. • Support the distribution of the employee’s salary or wages among specific activities or costs 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. • In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees, in addition to the supporting documentation described in this section, must also be supported by records indicating the total number of hours worked each day. Condition CAP was missing a consistent system of internal control for tracking and approving the salaries and wages and other costs charged to the federal program. There were several timecards and transactions that were not approved by the supervisor or another individual knowledgeable of the grant. Additionally, journal entries were posted to classify salaries and wages to the grant without a supporting allocation and approval. For the transactions that were lacking support it was not possible to verify the costs were allowable. Therefore the amounts associated with these transactions are reported as questioned costs. Cause Due to turnover in grant management, processes that had previously existed were overlooked, which resulted in a lack of consistent approval of costs and an inconsistent system for the allocation of salaries and wages charged to the grant. Additionally, records that reflect the work performed were unavailable. Effect or potential effect CAP was unable to provide supporting documentation that the costs allocated to the grant were allowable. Questioned Cost $17,393 Context The internal control and compliance testing performed included testing 60 transactions out of 270 total grant transactions. Of the items tested, 32% of the transactions were missing approvals or adequate supporting documentation of the time and expense allocated to the grant. Identification as a repeat finding This is not a repeat finding. Recommendation We recommend CAP review its policies and procedures related to the internal controls over payroll and other transactions related to grants. Views of Responsible Officials CAPNC moved from an archaic, unsupported software system to Sage Intaact. This software provides the ability to modernize and deploy the levels of internal controls missing from previous fiscal personnel oversight and technical capability. Current staff have trained under Sage Intaact and Wipfli consultants to properly track A/P, A/R, payroll and grant management to ensure the integrity of data entry and compliance is observed. Board membership have access to accounting software through Board portal for further oversight. Payroll services were outsourced to ADP payroll services in order to provide real time features and accountability for time. This allows recording of time more accurate, reliable and allocable. Payroll records are reviewed and time studies are being performed for all staff to ensure allocation methodology, once selected is appropriate, consistent and in alignment with staff performance. Wipfli Consulting is providing technical assistance over a 10 month period to develop/deploy updated policies and procedures for fiscal area, in accordance with Uniform Guidance. Curriculum includes: All administrative leadership staff received, and will continue to receive annually, fiscal oversight training including but not limited to, Uniform Guidance training, grants management and compliance training. Allocations are reviewed regularly by leadership team to ensure that we have appropriate methodology and that we are consistent with grant expectations and regulations. See Corrective Action Plan

Corrective Action Plan

2023-001 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Program Emergency Rental Assistance Program Name of Contact Person Kelly Wessels, Executive Director Corrective Action Plan • CAPNC moved from an archaic, unsupported software system to Sage Intaact. This software provides the ability to modernize and deploy the levels of internal controls missing from previous fiscal personnel oversight and technical capability. Current staff have trained under Sage Intaact and Wipfli consultants to properly track A/P, A/R, payroll and grant management to ensure the integrity of data entry and compliance is observed. Board membership have access to accounting software through Board portal for further oversight. • Payroll services were outsourced to ADP payroll services in order to provide real time features and accountability for time. This allows recording of time more accurate, reliable and allocable. Payroll records are reviewed and time studies are being performed for all staff to ensure allocation methodology, once selected is appropriate, consistent and in alignment with staff performance. o Time entry occurs electronically in real time; hourly employees are assigned a schedule, and salaried staff are monitored o Time cards are electronically submitted and approved electronically to ensure time is recorded as it occurs. o Time off records are also submitted for approval electronically and leave is approved based on County personnel guidance. • Wipfli Consulting is providing technical assistance over a 10 month period to develop/deploy updated policies and procedures for fiscal area, in accordance with Uniform Guidance. Curriculum includes: o Internal controls o Allowable compensation and employee benefits o Cost allocation methods o Governing body financial responsibilities o Budgeting o Financial reporting o Financial management systems o Documentation and record retention o Financial policies and procedures o Allowable costs • All administrative leadership staff received, and will continue to receive annually, fiscal oversight training including but not limited to, Uniform Guidance training, grants management and compliance training. Allocations are reviewed regularly by leadership team to ensure that we have appropriate methodology and that we are consistent with grant expectations and regulations. Proposed Completion Date June 30, 2024

Categories

Questioned Costs Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 370320 2023-002
    Material Weakness
  • 370321 2023-003
    Significant Deficiency
  • 370322 2023-002
    Material Weakness
  • 946761 2023-001
    Material Weakness
  • 946762 2023-002
    Material Weakness
  • 946763 2023-003
    Significant Deficiency
  • 946764 2023-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
21.023 Emergency Rental Assistance Program $331,083
93.069 Public Health Emergency Preparedness $287,600
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $220,462
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $200,815
93.977 Sexually Trnasmitted Diseases (std) Prevention and Control Grants $150,124
93.959 Block Grants for Prevention and Treatment of Substance Abuse $119,450
93.268 Immunization Cooperative Agreements $102,879
93.145 Hiv-Related Training and Technical Assistance $99,753
93.569 Community Services Block Grant $85,906
93.558 Temporary Assistance for Needy Families $82,236
14.231 Emergency Solutions Grant Program $68,301
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $63,589
14.267 Continuum of Care Program $60,290
95.001 High Intensity Drug Trafficking Areas Program $48,814
93.387 National and State Tobacco Control Program (b) $39,144
93.426 The National Cardiovascular Health Program $37,115
93.197 Childhood Lead Poisoning Prevention Projects_state and Local Childhood Lead Poisoning Prevention and Surveillance of Blood Lead Levels in Children $8,590
21.027 Coronavirus State and Local Fiscal Recovery Funds $5,901
16.582 Crime Victim Assistance/discretionary Grants $5,000
93.958 Block Grants for Community Mental Health Services $4,681
16.607 Bulletproof Vest Partnership Program $4,650
97.067 Homeland Security Grant Program $3,502
20.616 National Priority Safety Programs $3,316
93.150 Projects for Assistance in Transition From Homelessness (path) $3,087
93.008 Medical Reserve Corps Small Grant Program $2,244
97.012 Boating Safety Financial Assistance $217