Finding 390786 (2023-004)

2023-004 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Numbers: 84.425U Passed-through Identification: #20221080 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee did not sign their semi-annual certification covering July 1st to December 31st. In speaking with the District, it was explained that the employee left the grant funded position in November 2022 before the 6 month period was completed. While the semi-annual certification was completed after the fact and signed by a supervisory official, the employee continued to be employed by the district as a substitute which allowed ample time for the employee to sign their semi-annual certification. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the time spent on activities by the employee. Questioned Costs: $5,990.73 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that semi-annual certifications be completed after the fact and signed by the employee and supervisory official having firsthand knowledge of the work performed by the employee. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.