Finding 411141 (2022-001)

Material Weakness
Requirement
ABEG
Questioned Costs
$1
Year
2022
Accepted
2023-09-28

AI Summary

  • Core Issue: Payroll allocations were not updated throughout the year, leading to over-allocation for nine employees.
  • Impacted Requirements: Payroll must reflect actual costs incurred and be allocated based on current funding; failure to do so affects reporting to funding sources.
  • Recommended Follow-Up: Implement a time/activity reporting system for payroll and ensure all allocations are reviewed and approved by the executive director.

Finding Text

Item 2022-0011) Federal program and specific federal award Identification:? CFDA #19.510 U.S. Refugee Admissions Programo Federal Agency: U.S. Department of State/Bureau of Population, Refugees, and Migrationo Pass through Agency: U.S. Committee for Refugees and Immigrants? CFDA #93.566 Refugee and Entrant Assistance - Discretionary Grantso Federal Agency: U.S. Department of Health and Human Serviceso Pass through Agency: Wisconsin Department of Children and Families and U.S. Committee for Refugees and Immigrants? CFDA #93.576 Refugee and Entrant Assistance - Discretionary Grantso Federal Agency: U.S. Department of Health and Human Serviceso Pass through Agencies: Wisconsin Department of Children and Families and U.S. Committee for Refugees and Immigrants2) Criteria: Payroll should be allocated to grants and programs based on actual payroll costs incurred. Allocations should be updated as new grant funds are awarded.3) Condition: The Organization created an allocation plan at the beginning of the year; however, as new funding was awarded the plan stayed the same. Starting in the second quarter of the fiscal year, nine employees payroll was over allocated to grants and programs. The Organization did not update allocation of payroll throughout the year to verify employees were not over allocated.4) Cause: The Organization does not maintain sufficient payroll allocation support and, accordingly, the payroll allocation is not recorded based on actual costs incurred.5) Effect: Payroll allocations should be updated throughout the year to include all grants and programs to properly account for the activities of the Organization and to properly report payroll costs on cost reports to funding sources.6) Questioned costs:? Salaries $81,319? Payroll Taxes $6,221? Employee Benefits $12,200Salaries were computed by calculating FTE allocations over 1 for each individual employee and multiplying by their respective salary costs for the year. Payroll taxes were over-allocated salary costs multiplied by 7.65%. Employee Benefits were salary costs multiplied by 15%, which was the salaries to benefits ratio for the year.7) Prevalence or consequence: The over allocation started in the second quarter of the fiscal year and continued throughout the remainder of the fiscal year.8) Recommendation to prevent future occurrences. We recommend that the Organization develop a time and/or activity reporting methodology to adequately document the payroll charges by grant and program. We also recommend that all cost allocations be reviewed and approved by the executive director.9) Views of responsible officials at auditee. See attachment for Organization?s corrective action plan.

Corrective Action Plan

International Institute of Wisconsin, Inc.Single Audit Corrective Action PlanFor the Fiscal Year Ended June 30, 2022AUDIT FINDINGFinding Reference Number: 2022-001Description of Finding: Payroll and related expenses were over allocated to grants.Statement of Concurrence or Nonconcurrence:This letter is in response to the condition set forth on page 34 Item #9, of the IIW 2022 Audit.Paul F. Trebian, President & CEO of IIW as of June 7, 2023, has discussed with IIW?s account and dataspecialist circumstances around the information provided on page 33 for Internal Control over majorprograms. Findings of audit indicate over allocation of FTEs against Type A (state contracts) for$250,000; and Type B (federal contracts) for $62,500.IIW agrees with the findings of the IIW 2022 Audit.Corrective Action:Currently, IIW is conducting an outside objective review of grants/contracts, since August 2022, toconfirm the audit findings for 2022 and combined with the next 2023 regular audit IIW should be able todetermine the exact amounts, any payback through adjustments made by the state for subsequentpayments after errors were made, and the nature of the over allocation of FTE?s.The reason for the need to combine with the next year 2023 audit is that the state and federal fiscal yearbeginning and ending overlap IIW?s fiscal year period.This is an important matter to investigate in an objective manner, so that we can determine a course ofaction to properly address the matter. Once the entire matter has been analyzed, IIW will be able todetermine actions to perform to provide process improvement to prevent over allocation in the future. Asa part of that process, the organization will certainly adopt the audit recommendation that it develop atime and/or activity reporting methodology to adequately document the payroll charges by grant andprogram, and that its cost allocations be reviewed and approved by the executive director.Name of Contact Person:Paul F. Trebian, Ed.D., MBA/TM, MA, BSPresident & CEOInternational Institute of Wisconsinptrebian@iiwisconsin.org414-403-9735 CellCSTProjected Completion DateIIW plans on wrapping up the investigation in a few weeks, and then will have more information tocommunicate following actions to adopt the audit recommendations and reporting methodology.QUESTIONED COSTS1. For each questioned cost, the organization should identify the amount by state financialassistance or award program and the program period.2. If the organization believes a questioned cost is an allowable cost, a statement providingreasons for the organization's position should be included.3. If the cost is questioned because the organization failed to provide the auditors withdocumentation supporting the allowability of the questioned cost, and the documentation subsequentlybecomes available, the organization should provide such documentation as part ofthe submission of the corrective action plan. The organization should describe how the records documentthe allowability of the cost.4. If the organization determines that the questioned costs are unallowable or that the chargescannot be supported, the organization should provide a statement to that effect and remit payment for theunallowable or unsupported costs with the corrective action plan.If the (Office of Policy and Management and/or Oversight Agency) has questions regarding thisPlan, please call Paul F. Trebian at 414-225-6220.Sincerely yours,Paul F. Trebian, Ed.D., MBA/TM, MA, BSPresident & CEOInternational Institute of Wisconsinptrebian@iiwisconsin.org414-403-9735 CellCST

Categories

Questioned Costs Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 411142 2022-001
    Material Weakness
  • 411143 2022-001
    Material Weakness
  • 411144 2022-001
    Material Weakness
  • 411145 2022-001
    Material Weakness
  • 411146 2022-001
    Material Weakness
  • 411147 2022-001
    Material Weakness
  • 411148 2022-001
    Material Weakness
  • 411149 2022-001
    Material Weakness
  • 411150 2022-001
    Material Weakness
  • 411151 2022-001
    Material Weakness
  • 411152 2022-001
    Material Weakness
  • 987583 2022-001
    Material Weakness
  • 987584 2022-001
    Material Weakness
  • 987585 2022-001
    Material Weakness
  • 987586 2022-001
    Material Weakness
  • 987587 2022-001
    Material Weakness
  • 987588 2022-001
    Material Weakness
  • 987589 2022-001
    Material Weakness
  • 987590 2022-001
    Material Weakness
  • 987591 2022-001
    Material Weakness
  • 987592 2022-001
    Material Weakness
  • 987593 2022-001
    Material Weakness
  • 987594 2022-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
19.510 U.s. Refugee Admissions Program $859,966
93.567 Refugee and Entrant Assistance_voluntary Agency Programs $336,413
19.402 Professional and Cultural Exchange Programs - International Visitor Leadership Program $90,456
93.566 Refugee and Entrant Assistance_state Administered Programs $46,000
66.469 Great Lakes Program $19,115
93.576 Refugee and Entrant Assistance_discretionary Grants $16,511