Finding 400782 (2023-001)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2024-06-13

AI Summary

  • Core Issue: There were discrepancies between employee timesheets and payroll registers for federal grants, indicating weak internal controls over compliance.
  • Impacted Requirements: Compliance procedures were not followed, leading to undercharging of grants and inadequate documentation of time and effort.
  • Recommended Follow-Up: Management must verify that amounts charged to grants align with timesheets and payroll records before submitting reimbursement requests.

Finding Text

Finding 2023-001: Allowable costs – significant deficiency in internal controls over compliance and compliance finding. Community Services Block Grant ALN 93.569 Emergency Rental Assistance Program ALN 21.023 Criteria: The Council’s internal control procedures over compliance specify that all employees timesheets and hours agree to the payroll register and amount allocated to grant activities. Condition: During allowable cost testing for federal grants, for 8 of the 65 payroll transactions tested, the amount charged to the grant did not agree to the employee's timesheet. Cause: Prior to May 2023, percentage labor distributions were based on grant budgeted allocations in our payroll system for those employees working out of multiple service categories. Additionally, service category descriptions in the payroll system did not match 100% with the general ledger service category descriptions. Effect: The Council's reporting of grant time and effort was not fully documented, in accordance with internal control over compliance procedures. The cumulative effect of the exceptions noted during tested resulted in the grants being undercharged by the Council. Per Management's Corrective Action plan, this finding was fully resolved as of April 2024. Questioned Costs: None Recommendation: Management should ensure amount charged to the grants agree to timesheets and payroll registers before the request for reimbursement is submitted. Management’s Response: The corrective action plan detailed on page 31 was fully implemented as of April 2024

Corrective Action Plan

Finding 2023-001: Allowable costs – significant deficiency in internal controls over compliance and compliance finding. Management Response CCGD was issued monitoring findings by HHSC for the monitoring period October 2021 (FY 21) -November 2022 (FY 22) in April 2023. As a result of that finding, CCGD received a finding in its 2022 audit. Because of the timing of the findings, as noted in the 2023 audit report, there was not time to resolve the issue before 2023. Therefore, even though the below described plan was implemented in 2023, immediately upon receipt of the initial finding, CCGD was still issued a finding in its FY2023 audit. The notification was received in the 7th month of fiscal year 2023, the following plan has been implemented. o Timesheet and GL mismatch i. Management Response: 1. Perform an audit of existing setup of HRIS-Paycom system to determinecause of mismatch 2. If needed, reimplement Paycom with required setup or change vendors 3. All departments along with respective service categories werereestablished in Paycom to only display employees applicable servicecategories based their respective grants. 4. Conduct quarterly audits of timesheets and GL to ensure there are nomismatches. 5. Time study was performed on quarterly basis to ensure individualperformance complies with funders mandate. ii. Progress Update - GL and Timesheet Mismatch: 1. Audit of existing setup to review the following: a. Department(s) - revised department names/descriptions i. Made changes to all applicable employees’ setup. b. Home Allocation(s) – revised home allocation(s)i. Revised/edited the default home allocation description ii. Assigned correct default home allocation to employees c. Service Categories i. Revised/edited service categories assigned to each department 2. Observations: a. Following Paycom updates, CCGD experienced technical challenges due to software glitches which continued to result in timesheet and GL mismatches. CCGD is continuing to work with Paycom to identify and eliminate the problem. b. CCGD subsequently sought assistance from Paycom in the troubleshooting process. 3. Departmental training of timekeeping process a. Personalized standard operating procedures used b. Real-time examples/instruction provided to staff in training session(s) 4. Post-training audits conducted to include: a. Timecard/sheet review b. GL review and comparison of timecards and sheetsiii. Future Steps and Anticipated Timeline: 1. Continuation of post-training audits to include: a. Timecard/sheet review b. GL review and comparison of timecards and sheets 2. With an anticipated deadline completion date of December 31, 2023, for adherence of full compliance, CCGD effectively implemented system updates prior to this deadline to ensure payroll processing is now based on the actual time and effort performed. iv. Progress Update – Performance Activity Report 1. To provide further back up to time and effort, an additional option in Paycom was enabled for staff to enter notes on day-to-day activity. 2. Departmental training on this goal was performed and completed as of March 31, 2024. 3. Continuation of post-training audits to include: a. Timecard/sheet review b. GL review and comparison of timecards and sheets v. Post implementation plan and observation: CCGD is fully committed to complying with funders and audit standards. Furthermore, CCGD will continue to monitor and identify any potential errors in its payroll reporting to bring a timely solution if required. Furthermore, minor reporting errors occur in payroll GL reports on a random basis. The errors appear to be technical, and as such, we are currently working with Paycom to resolve this issue. Additionally, CCGD will continue to perform time study to ensure that all salary expenses and allocations are adhered to the respective program budget. Parties Responsible: Chief Executive Officer, Chief Financial Officer, and Director - Human Resources

Categories

Allowable Costs / Cost Principles Cash Management Reporting Significant Deficiency

Other Findings in this Audit

  • 400783 2023-001
    Significant Deficiency Repeat
  • 400784 2023-001
    Significant Deficiency Repeat
  • 400785 2023-001
    Significant Deficiency
  • 977224 2023-001
    Significant Deficiency Repeat
  • 977225 2023-001
    Significant Deficiency Repeat
  • 977226 2023-001
    Significant Deficiency Repeat
  • 977227 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.045 Special Programs for the Aging: Title Iii, Part C, Nutrition Services $4.27M
93.044 Special Programs for the Aging: Title Iii, Part B Grants for Supportive Services and Senior Centers $3.46M
93.569 Community Services Block Grant $1.88M
21.023 Emergency Rental Assistance Program $1.54M
93.052 National Family Caregiver Support, Title Iii, Part E $1.32M
93.778 Medical Assistance Program $448,694
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $276,790
93.368 21st Century Cures Act - Precision Medicine Initiative $221,088
93.053 Nutrition Services Incentive Program $172,248
97.024 Emergency Food and Shelter National Board Program $87,198
93.043 Special Programs for the Aging: Title Iii, Part D, Disease Prevention and Health Promotion Services $82,661
93.575 Child Care and Development Block Grant $81,058
93.324 State Health Insurance Assistance Program $71,058
93.042 Special Programs for the Aging: Title Vii, Chapter 2, Long Term Care Ombudsman Services for Older Individuals $50,794
93.071 Medicare Enrollment Assistance Program $33,639
93.734 Empowering Older Adults and Adults with Disabilities Through Chronic Disease Self-Management Education Programs- Financed by Prevention and Public Health Funds $28,316
93.767 Children's Health Insurance Program $12,253
93.558 Temporary Assistance for Needy Families $2,764