Finding Text
Criteria:
As per §200.430 Compensation - personal services, (i) Standards for Documentation of Personnel Expenses, (1), Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must:
1. (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;
2. (ii) Be incorporated into the official records of the non-Federal entity;
3. (iii) Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity,
not exceeding 100% of compensated activities;
4. (iv) Encompass federally-assisted and all other activities compensated by the non-Federal entity on an
integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity's written policy.
CH7 Payments and Cash Management, Appendix 7-A: Policy and Procedures Specific Terms and Acronyms establishes that “an allocation of time spent on supporting federal award work would be available to confirm calculation of a portion of salary allocable to federal award. Certified Labor Summary should be signed (electronically or manually) by an authorized representative. Such time records should coincide with one or multiple pay periods.”
Condition:
On examined documents for payment of payroll, from a sample of fifteen (15) employees, twelve (12) of them did not comply with the requirement to prepare the Weekly State Management Cost Report (SMC).
Cause:
The Program did not implement effective internal control procedures to keep a segregated tracking of actual time used in each federal program.
Effects:
Not having a proper internal control in place to keep a segregated tracking of actual time used in each federal program may lead to noncompliance with the allowable costs/cost principles and time and effort requirements.
Questioned Costs:
$42,102.08
Identification as a repeat finding:
Finding is a repeat of a finding in the immediately prior year and was identified as finding number 2019-04.
Recommendation:
We recommend management to implement a procedure to keep a segregated tracking of actual time used in each federal program and for obtain and validate all required supporting documentation for salaries charged to the federal award.