Finding Text
Criteria: Compensation costs are allowable to the extent they satisfy requirements of Title 2 Code of Federal Regulations (CFR) section 200.430, and the total compensation for individual employees is determined and supported as provided in 2 CFR section 200.430(i), including charges to Federal awardsfor salaries and wages be based on records that accurately reflect the work performed.Condition/Context: A sample of 9 employees out of a population of 26 employees whose compensation was charged to the awards was selected. For each of the 9 employees selected there were no records to support the actual allocation of time that was charged to each award. The personnel action form that is completed upon hire indicated the allocation of time worked in some instances, however in accordance with 2 CFR section 200.430 (i)(1)(viii) estimates determined before the services are performed do not qualify as support for charges to Federal awards. We noted time was allocated to the award in accordance with the personnel action form that is completed upon hire for all 9 employees. Two of the employees selected had no documentation to support that their time should have been charged to the award.Our sample was not, and was not intended to be, statistically valid.Questioned costs: None notedCause/Effect: The University does not have the proper controls in place to ensure time and effort reporting is completed. The lack of records supporting the actual allocation of time charged increases the risk of unallowable compensation costs being charged to the federal award.Repeat finding: Yes Recommendation: We recommend the University implement an internal control policy that requires employees whose compensation is charged to a federal award complete time and effort reporting to accurately reflect the work performed on each federal award and ensure supporting documentation is maintained for those who do charge time.Views of responsible officials and planned corrective actions: Heritage University agrees with the finding. Heritage University implemented a new internal control policy that requires employees whosecompensation is charged to federal awards to complete time and effort to accurately reflect the work performed on each federal award. Heritage University is using the time and effort forms to allocate the correct hours to each federal award during the payroll process period. Each time an employee must fill out the time and effort to show actual hours worked, signed by the employee and supervisor before turning it into the payroll department. Email sent out to all employees outlining the new process required by employees whose hours are charged to a federal award.