Finding 391650 (2023-001)

Finding Number 2023-001: Represents a significant deficiency in internal control over compliance with Community Action Opportunities’ major federal program. Repeat Finding: No Type of Finding: Significant Deficiency Description: Internal Control over Payroll Expenditures Major Programs: AL#93.600 – Head Start Cluster (Direct) Questioned Costs: None How the questioned costs were computed: N/A Compliance Requirements: Activities Allowed or Unallowed and Allowable Costs, Cost Principles Awards effected: Head Start 04-CH011686-03, Head Start 04-CH011686-04, 04HE000626-01 Condition: Out of a sample of 40 payroll transactions there were 2 employees that received duplicate pay for hours related to education. Criteria: 2 CFR 200.430(i) states that “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated;”. Cause: An error in setting up the education time code which resulted in education hours being added to standard time in addition to hours already recorded for education. Effect: Without ensuring the proper number of hours is entered in the payroll system, it is possible that employees could be compensated the incorrect amounts, and if paid more than the authorized rate or salary, grants could be overcharged, resulting in unallowable costs. Recommendation: We recommend that a member of the payroll department or fiscal team review each employee’s education time to ensure the proper hours on each payroll. View of responsible officials: Management agrees with the finding and has committed to a corrective action plan.