Finding 2023-003: Inadequate Documentation of Employee Time and Effort Allocation for Federal Program
Identification of the Federal Program: Assistance Listing Number 17.259 - WIOA Youth Activities Program - U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles.
Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee's actual hours spent on different programs. Time and effort are allocated based on budgeted amounts.
Cause: Allocation to funding sources was entered into the payroll system based on budgeted estimates rather than actual time records.
Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants.
Questioned Costs: $65,379
Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379.
Plan:
1. Mandatory Time and Program Effort Records: OBT has implemented allocations by program in our payroll software. Hourly employees allocated to multiple programs will clock in and out for each program and all timecards are approved by management. Reports are reviewed every payroll for accuracy.
2. Training: OBT has provided training to all employees on the importance of accurate time and effort reporting for federal programs, ensuring that employees understand the requirements and their responsibilities in maintaining these records.
3. Internal Controls: OBT has implemented internal controls to review and verify the accuracy of time and effort records, ensuring that charges to federal awards comply with regulations.
4. Monitoring and Auditing: OBT conducts regular monitoring and internal audits to validate the accuracy and completeness of time and effort records.
Name of Contact Person: Carla Licavoli, Chief Operating & Compliance Officer
Target Date: OBT implemented all four steps within this plan by December 31, 2023, with ongoing monitoring and improvement.