Finding Text
2023-002 – Internal Controls over Compliance with Documentation of Personnel Expenses
Finding Type: Significant Deficiency in Internal Control over Compliance
Program: Education Stabilization Fund (ALN #84.425)
Compliance Area: Allowable Costs/Cost Principles
Criteria: 2 CFR Part 200.430(i) Standards for Documentation of Personnel Expenses requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reasonably reflect the total activity for which the
employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award.
Condition: The District did not appropriately reflect the federal awards for which certain employee salaries and wages were charged, including the improper use of a semi-annual certification and timesheets that do not depict the federal award from which the salaries and wages are paid.
Cause: The District failed to ensure pre-filled forms were not used for certain employees being charged to federal awards. In addition, the District failed to fully understand the appropriate uses of a semi-annual certification.
Effect: Failure to properly document personnel expenses could result in non-compliance and dis-allowed costs, resulting in the loss of federal funds.
Auditor’s Recommendations: It is recommended that the District communicate to all departments that pre-filled forms should not be utilized when documenting salaries and wages charged to federal awards. In addition, the District should review the requirement for personnel activity reports and semi-annual certifications to ensure the use of either is appropriate in each circumstance.