Finding Text
Finding 2023-004: Time Tracking and Allocations (Allowable Costs and Activities Allowable)
Federal Programs: All
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation –
personal services” requires that charges to Federal awards for salaries and wages must be based
on records that accurately reflect the work performed, and that these records must be supported by
a system of internal control which provides reasonable assurance that the charges are accurate,
allowable, and properly allocated. Additionally, these records must comply with established
accounting policies and practices of the non-Federal entity.Condition: During our internal control testwork over payroll, we noted employees were not required
to utilize or submit timesheets (unless hourly).
Cause: There is no internal or formal policy by the Organization that requires the use of timesheets
for tracking of time spent and on which projects/programs, including those that are federally funded.
Effect or Potential Effect: The current system does not allow the Organization to accurately track
and charge salaries and wages to its various programs. As a result, the Organization could
inadvertently mischarge salaries and wages to those programs, including those federally funded.
Questioned Costs: Indeterminable.
Context: The Organization does not a documented audit trail showing the approval of reports.
Recommendation: We recommend the Organization ensure each employee completes a
timesheet that pertains to each payroll period and the timesheet documents the allocation of time
worked on departments and projects. Furthermore, the Organization should prepare and maintain a
reconciliation that shows the program allocations (as documented in the approved timesheets) and
the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.