Finding Text
2022-007 - FINDING - Insufficient Controls over Payroll Charged to a Research Grant Federal Agency: National Institute of Health Assistance Listing Number: 93.397 Program Names and Award Numbers: Cancer Centers Support Grants (The Chicago Cancer Health Equity Collaborative a/k/a ChicagoCHEC), U54CA202995 Program Expenditures: $1,083,258 Questioned Costs: None Northeastern Illinois University (University) did not pay an employee for the time worked on a grant for a 3-month period when the employee worked those hours. During the testing of 60 expenditures selected from various research and development grants, we noted one (2%) expenditure tested for allowability was for retroactive pay to an employee originally only paid half of the hours worked on a grant for a 3-month period. The employee?s reported work hours were adjusted between periods to match available funding under the assumption that additional funding would be secured in a timely manner. The sample was not intended to be, and was not, a statistically valid sample. Uniform Guidance (2 CFR 200.430(i)) states charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. In accordance with Department of Labor regulations implementing the Fair Labor Standards Act (FLSA) (29 CFR part 516), charges for the salaries and wages of nonexempt employees must also be supported by records indicating the total number of hours worked each day. Uniform Guidance (2 CFR 200.303(a)) requires nonfederal entities receiving federal awards establish and maintain effective internal control designed to reasonably ensure compliance with Federal laws, statutes, regulations, and the terms and conditions of the Federal award. Effective internal controls should include procedures to ensure that all allowability policies are followed. University officials stated there was a significant delay by the funding agency in approving the usage of unspent grant funds from a prior period due to a delay in accepting the final financial status report for the previous grant period resulting in the University creating the payroll situation above. University?s response to delays in securing funding to pay employee resulted in costs being paid and charged to the grant in the wrong time periods. (Finding Code No. 2022-007). RECOMMENDATION - We recommend the University ensure procedures for payroll charges for employees are always for the actual hours worked within a given pay period according to the applicable regulations. UNIVERSITY RESPONSE - The University agrees with the recommendation.