Finding Text
Finding No. 2022-004
Federal Agency: U.S. Department of Education
Assistance Listing No. and Title: 84.403 Consolidated Grants to the Outlying Areas
Area: Allowable Costs/Cost Principles
Questioned Costs: $28,975
Criteria:
2 CFR 200.403 (g) provides that costs must be adequately documented to be considered allowable under Federal awards.
2 CFR 200.439(b) provides that capital expenditures for general purpose equipment, buildings, and land; special purpose equipment with a unit cost of $5,000 or more; and, improvements to land, buildings, or equipment which materially increase their value or useful life, are unallowable as direct charges, except with the prior written approval of the Federal awarding agency or pass-through entity.
Condition:
1. For 25 (or 63%) of 40 transactions tested, aggregating $39,942 out of $4,631,757 in total payroll expenditures, the Notice of Personnel Action (NOPA) form was not provided for differential payments paid to employees.
See Schedule of Findings and Questioned Costs for chart/table.
Condition, continued:
2. For 2 (or 40%), no evidence of prior approval from the federal agency was provided for equipment acquisitions PS-049031-US and PS-055730-US, which were acquired within fiscal year 2022, totaling $14,299.
Cause:
PSS failed to ensure that costs charged to the grant are adequately supported.
Effect:
PSS is in noncompliance with applicable allowable costs/cost principles requirements. The reportable questioned cost is $28,975.
Recommendation:
PSS should strengthen recordkeeping procedures so that documents are readily available to substantiate costs charged to the grant.
Views of responsible officials:
The PSS Corrective Action Plan provides a detailed rationale for disagreement with Condition 1. Management agrees with Condition 2.
Auditor response:
Condition 1 – Part T60-30.1-448 (Approval of Proposals to Provide Premium Pay or Differentials) of the PSS Personnel Rules and Regulations states that all proposals for pay differentials as defined herein shall be submitted by the Commissioner of Education on a request for personnel action (form CSC P 1) to the Personnel Management Officer for review and approval. The request must be accompanied by a letter of justification addressing each of the criteria required to support the particular differential.
PSS is in noncompliance with its personnel rules and regulations as it failed to provide documentation supporting a request for personnel action, which is determined to be the NOPA for these instances. The NOPA also determines whether the employee is validly employed at date of payment of the differential. The condition remains.