Finding Text
Finding 2022-002 – Allowable Costs/Cost Principles
U.S. Department of Health and Human Services – Passed through DHS – Title IV-E Foster Care (ALN 93.658)
Condition: During our audit, it was noted that there was no process in place to ensure that payroll costs allocated to the Title IV-E Foster Care program was in accordance with the Uniform Guidance. During our testing, we noted that payroll was allocated based on a semi-annual time study. The time study was used to allocate the payroll costs for the year, without determining if the semi-annual periods were representative of the time worked by employees for the remainder of the year.
Criteria: The Code of Federal Regulations (2 CFR 200.430) requires that payroll costs be allocated in an equitable manner.
Cause: The County Children’s Services department does not have adequate procedures in place to verify that payroll costs are allocated in an equitable manner in accordance with the Uniform Guidance.
Effect: The County Children’s Services department may not be allocating payroll costs equitably.
Questioned Costs: The amount of reimbursable questioned costs, if any, is not able to be determined.
Recommendation: We recommend that the County Children’s Services department establish procedures that provide a system and related documentation to support an equitable allocation of payroll costs.
Views of Responsible Official: Management agrees with the finding. See Corrective Action Plan.