Finding Text
2022-002 - Emergency Solutions Grant - Assistance Listing No. 14.231
Significant Deficiency in Internal Control Over Compliance and Noncompliance – A. Activities Allowed or Unallowed and B. Allowable Costs/Cost Principles
Criteria: 2 CFR 200.403(g) indicates costs must be adequately documented in order to be considered allowable.
Condition and Context: During 2022, FSA maintained payroll records which included detailed timecards or time studies for employees who spent hours worked on the Emergency Solutions Grant (ESG). We selected 8 employees for testing during the audit and noted that 2 employees did not maintain detailed timecards or a time study and 3 employees worked less hours on ESG than what were claimed for reimbursement under the grant. Our sample was not considered to be a statistically valid sample.
Cause and Effect: We noted a lack of internal controls surrounding the tracking of hours worked for ESG during 2022 which resulted in noncompliance. We tested 8 employees for a total of $14,431 of claimed payroll cost and calculated known questioned costs of $2,196 which resulted in likely questioned costs of $8,703 using an error rate of 15% over total payroll claimed for 2022 of $57,188. Total likely questioned costs were 2% of overall ESG expenditures for 2022.
Recommendation: We recommend FSA implement procedures for all employees who have payroll claimed under federal programs to maintain detailed timecards or time studies to support hours worked under each federal program.
Views of Responsible Officials and Planned Corrective Actions: Family Service Association of Howard County, Inc.’s (FSA) accounting department experienced significant turnover during 2022 which included the Director of Accounting leaving mid-year. Since the new Director of Accounting took on her role we have been actively working on ways to enhance our processes. Family Service Association of Howard County, Inc. (FSA) will implement procedures and maintain timecards and time studies for employees who have payroll claimed under the federal programs to be in compliance of federal grants beginning April 2024.