Finding Text
Finding 2022-002 Maintain Employees? Time and Effort Records Federal Programs Information Federal Agency: U.S. Department of Agriculture Cluster/Program: Child Nutrition Cluster Federal Program(s) Name: National School Lunch Program AL Number(s): 10.555 Pass-through Entity: Massachusetts Department of Elementary and Secondary Education Award Year: 2022 Compliance Requirement: Allowable Costs/Cost Principles Type of Finding Compliance Internal Control over Compliance - Material Weakness Criteria or Specific Requirement Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs of goods and services charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Town is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. Condition and Context A sample of disbursements charged to the grants was tested for supporting documentation in order to determine if in accordance with Allowable Costs/Cost Principles. As a result of testing of payroll disbursements charged to grants, certain costs were found that did not meet the time and effort documentation requirements. Specifically, time and effort support was not maintained during fiscal year 2022. Cause Weaknesses in the design and implementation of internal controls. Effect or Potential Effect There is a risk that amounts charged to federal awards may not be allowable or in accordance with applicable cost principles. DRAFT 3.29.2023 13 Questioned Costs Known and likely questioned costs of $421,643 are reported and are equal to payroll and related costs for hourly employees charged to the 10.555 Child Nutrition Cluster. Identification as a Repeat Finding As identified in Section IV, the Schedule of Prior Year Findings, this is a repeat of finding 2021- 003. Due to the timing of the fiscal year 2021 finding (reported during fiscal year 2022), the Town was unable to implement changes during fiscal year 2022. Recommendation The Town should take the steps necessary to ensure that payroll and related costs charged are allowable and in accordance with the applicable time and effort cost principles. Views of Responsible Official Management agrees with the finding. Planned Corrective Action Management?s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.