FAC Explorer

Finding 392988 (2022-013)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2024-04-11
Audit: 303309
Organization: City of Pharr, Texas (TX)
Auditor: Burton McCumber & Longoria LLP

AI Summary

  • Core Issue: Internal controls for tracking overtime costs under the Homeland Security Grants Program are inadequate, leading to inaccuracies in reported hours.
  • Impacted Requirements: Overtime costs must be accurately tracked to ensure only allowable expenses are reimbursed, as per program guidelines.
  • Recommended Follow-Up: Strengthen internal controls by reviewing all supporting documentation for overtime claims, including timesheets and reimbursement forms.

Finding Text

ALN 97.067 - HOMELAND SECURITY GRANTS PROGRAM (HSGP) Reference Number 2022-013 Payroll Costs Criteria: The Homeland Security Grants program (Operation Stonegarden) allows funds to be used for operational overtime costs associated with law enforcement activities, in support of border law enforcement agencies for increased border security enhancement. Internal controls should be in place to ensure such overtime costs are accurately tracked to ensure reimbursement is requested only for allowable costs and allowable activities. Condition Found: Internal controls are not suitably designed to ensure overtime costs charged to the program are correct and accurate. A sample of 40 payroll transactions were selected for testing and the following inaccuracies were noted. One instance was noted where an employee worked 10 overtime hours performing Operation Stonegarden eligible activities, however, 16 overtime hours were charged to the program. One instance was noted where an employee worked 12.5 overtime hours performing Operation Stonegarden eligible activities, however, only 5.5 overtime hours were charged to the program. One instance was noted where an employee worked 8 overtime hours performing Operation Stonegarden eligible activities, however, the employee timesheet reflected 11.75 hours. Context: Condition was noted in conducting testing for internal controls over compliance and compliance. A random sample of 40 payroll transactions were selected for testing. Effect: Ineffective internal controls related to the tracking of overtime hours results in incorrect reimbursement requests submitted for reimbursement. Such errors may result in ineligible costs charged to the program. Questioned Costs: None reported. Cause: Controls are not suitably designed to ensure Operation Stonegarden hours are accurately tracked. Recommendation: We recommend the City strengthen internal controls related to the tracking of Operation Stonegarden overtime costs. As part of the process for requesting reimbursement, we recommend all supporting documentation be reviewed including employee timesheets, daily activity report summaries, OPSG overtime submission forms and reimbursement request forms. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.

Corrective Action Plan

Reference Number 2022‐013 Payroll Costs (ALN 97.067 – Homeland Security Grants Program) Corrective Action: We acknowledge the errors in OT hours identified during the audit. It is noteworthy that our diligent grant management staff took immediate corrective action by rectifying the OT hours errors before submitting reimbursement costs to the grantor and fully disclosing them to your team during the auditing testing period. Consequently, no grant funds were incurred or deemed unallowable during this period by the grantor agency. Strengthening Internal Controls: The city of Pharr recognizes the importance of robust internal controls, particularly in the tracking of OPSG overtime costs. We are committed to strengthening our internal controls to prevent future errors and enhance the accuracy of our reimbursement requests. Comprehensive Review Process: As part of the process for requesting reimbursement, we recommend implementing a comprehensive review of all supporting documentation. This includes a meticulous examination of employee timesheets, daily activity report summaries, OPSG overtime submission forms, and reimbursement request forms. Proposed Completion Date: 9/30/2024 Name of contact person: Robert Garcia, Grants Manager 1 Contact: Robert.garcia@pharr‐tx.gov

Categories

Allowable Costs / Cost Principles Cash Management Eligibility Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392989 2022-014
    Significant Deficiency
  • 969430 2022-013
    Significant Deficiency
  • 969431 2022-014
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $6.73M
20.205 Highway Planning and Construction $1.65M
14.218 Community Development Block Grants/entitlement Grants $411,471
97.067 Homeland Security Grant Program $304,561
97.083 Staffing for Adequate Fire and Emergency Response (safer) $155,402
16.922 Equitable Sharing Program $79,573
16.738 Edward Byrne Memorial Justice Assistance Grant Program $16,775
16.575 Crime Victim Assistance $9,805
20.600 State and Community Highway Safety $8,762
20.616 National Priority Safety Programs $3,629
20.614 National Highway Traffic Safety Administration (nhtsa) Discretionary Safety Grants $756