Finding Text
Finding 2021-006 Payroll Documentation - Activities Allowed and Unallowed, Allowable
Costs/Cost Principles – Noncompliance and Material Weakness in Internal
Control over Compliance
Agency Department of the Treasury
ALN 21.019
Program COVID-19 - Coronavirus Relief Fund
Award Year FY 2021
Pass-Through Agency State of Alaska Department of Commerce, Community, and Economic
Development
Pass-Through Entity
Identifying Number
20-CRF-024
Criteria 2 CFR 200.303 requires that non-federal entities receiving federal awards
establish and maintain internal control designed to reasonably ensure
compliance with federal statutes, regulations, and terms and conditions of
the federal award. 2 CFR 200.430 requires that charges to Federal awards for salaries and wages
must be based on records that accurately reflect the work performed. Per 2
CFR 200.430, these records must be supported by a system of internal control
which provides reasonable assurance that the charges are accurate,
allowable, and properly allocated and be incorporated into the official
records of the non-Federal entity.
Condition During our testing of payroll disbursements, we noted the following
exceptions:
- 20 out of the 60 expenditures sampled did not have properly maintained
personnel action forms signed by the employee.
- one out of the 60 expenditures sampled had an employee whose pay rate
had decreased; however, no adjustment was made in the payroll system to
reflect this decrease.
Cause Internal controls were not in place throughout the entire fiscal year to ensure
that all personnel action forms were reviewed and signed by the designated
individuals and the payroll system is updated to reflect changes in pay rates.
Effect or potential
effect
Federal funds could be expended for unallowed activities and unallowed
costs.
Questioned costs Below the reporting threshold.
Context We tested a sample of 60 payroll transactions totaling to $148,729 from a
population of 454 payroll transactions. The total amount of payroll
expenditures charged to the program in fiscal year 2021 were $1,220,281. We
noted 21 exceptions as noted in the condition. This is a condition identified
per review of City's compliance with the specified requirements not using a
statistically valid sample.
Identification as a
repeat finding
This is a repeat finding from prior year. This was reported as finding 2020-
005 in the 2020 report.
Recommendation Management should ensure the most current personnel action forms are
reviewed and signed by the designated personnel.
Views of
responsible officials
Management concurs with the finding. Management will review current
employee pay rates within the payroll module and ensure the rates agree to
the most current pay rate as specified in the employee’s current personnel
action form.