Finding Text
Assistance Listing #: 93.243
Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated.
The Uniform Guidance allows for use of budget estimates on an interim basis. When using budget estimates on an interim basis, grantees must reconcile estimates against actual time or effort on a regular basis to ensure that estimates conform to actual staff activity. Grantees must make adjustments in the payroll distribution to align with actual time.
Condition: During fiscal year 2023, the Organization charged payroll costs to the federal award programs using a set percentage based on budget and not based on employee’s actual time or effort amongst various programs.
Cause: Management was unaware that using budget estimates was not allowed without further reconciliation against actual time or effort activities. The fiscal year 2022 Uniform Guidance audit was not completed until April 2024, which did not allow for changes to be implemented during fiscal year 2023.
Effect: The salary costs charged to the federal programs may have been under or over reported based on the actual level of effort.
Questioned Costs: N/A
Repeat Finding: Yes
Recommendation: We recommend the Organization make changes overall its timekeeping processes to ensure that payroll costs accurately reflect the work performed and if budget estimates are utilized, that they are reconciled and trued up on a consistent basis.
Response: NFFCMH plans to implement changes overall to the Federation’s timekeeping processes to ensure that payroll costs accurately reflect the work performed and to reconcile and true up any budget estimates on a consistent basis.