Finding 392989 (2022-014)

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

AI Summary

  • Core Issue: An ineligible library employee was mistakenly charged to the EMS payroll costs under the CSLFRF program.
  • Impacted Requirements: Internal controls must ensure only eligible costs are charged to the program, which was not fully adhered to in this instance.
  • Recommended Follow-Up: The City should enhance controls to verify that all costs claimed are allowable and accurately categorized.

Finding Text

ALN 21.027 - CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS (CSLFRF) Reference Number 2022-014 Program Costs Criteria: Internal controls should be suitably designed to ensure only eligible costs are charged to the program. Only eligible costs should be charged to the program. Condition Found: The City elected to use the standard allowance for revenue loss as allowed under the CSLFRF. The City elected to apply EMS payroll costs as costs as such costs used to support public health as allowed under CSLFRF. The City identified the payroll costs applied to the program for an amount equal to the revenue loss claimed and provided a detail for sample selection and testing. In testing internal controls over compliance and compliance, we noted one employee in the sample selected was a library employee during the pay period tested rather than EMS. Context: Condition was noted in conducting testing for internal controls over compliance and compliance over allowable costs and allowable activities in a random sample of 40 payroll transactions. Sample size was expanded to 71 and no other exceptions were noted. Effect: The effect of this matter results in unallowed costs. Questioned Costs: None reported. Cause: The employee was a library employee and later transferred to the EMS department in March 2022. The employee was erroneously included in the listing of EMS employees for the fiscal year ended September 30, 2022 in the list of costs claimed to the program. Recommendation: We recommend the City implement controls to ensure all costs identified as having been charged to the program are allowable. Repeat Finding from Prior Year(s): N/A Views of Responsible Officials: See management’s corrective action plan.

Corrective Action Plan

Corrective Action: Employee Classification Review: - Conducts a comprehensive review of all employees claimed under the CSLFRF program. - Verify that each employee included in the program's cost claims is correctly categorized based on their role and department. - Ensure that payroll records accurately reflect the departmental assignments of each employee for the relevant fiscal year. Internal Controls Enhancement: - Strengthen internal controls related to cost allocation for federally funded programs. - Implement a review process for payroll costs charged to federal programs, including periodic audits or cross‐checks against departmental records. - Establish clear guidelines and documentation requirements for including employees in federally funded programs. Training and Communication: - Train relevant personnel, including payroll staff and departmental managers, on correctly classifying and documenting costs for federally funded programs. - Ensure that all staff involved in cost allocation know the requirements and guidelines set forth by the CSLFRF program. Regular Monitoring and Reporting: - Develop a monitoring schedule to review costs claimed under the CSLFRF program regularly. - Generate reports to track payroll costs associated with the program and compare them against departmental records. - Implement a reporting mechanism to alert management of any discrepancies or inconsistencies in cost allocation. Documentation and Record‐Keeping: - Maintain thorough documentation of employee assignments, payroll records, and cost allocation for the CSLFRF program. - Establish a centralized repository for all documents related to federally funded programs for easy access during audits or reviews. Management Oversight: - Assign responsibility to a designated individual or team to oversee compliance with cost allocation requirements for the CSLFRF program. - Regularly review the corrective action plan's implementation progress and address any issues or challenges. 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 Internal Control / Segregation of Duties

Other Findings in this Audit

  • 392988 2022-013
    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