Finding Text
Program: Formula Grants for Rural Areas, COVID-19 Formula Grants for Rural Areas Federal Financial Assistance Number: 20.509 Federal Grantor: U.S. Department of Transportation ? Federal Transit Administration Passed-Through: State of California Department of Transportation Award No. and Year: 64RO21-01647 and 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control and Instance of Non-Compliance Criteria: 2 CFR section 200.430, Compensation ? personal services, states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing of the program we noted instances in which employees were paid an additional amount of sick time during a pay period. Cause: Due to a programming error within ADP?s system, employee sick time hours that were coded on time-cards were doubled on MBTA?s payroll register. Effect: The programming error caused for excess costs to be incurred by MBTA. As payroll charges were fully allocated to the Federal program, the amount allocated also includes the excess amounts paid to employees. Questioned Costs: As a result of our procedures, we identified excess payments to employees in the amount of $527. However, the total amount caused by the data entry error was $756. Context/Sampling: A nonstatistical sample of 40 transactions out of approximately 988 transactions were selected for testing, which accounted for $77,983 of $2,251,472 of federal program expenditures. Repeat Finding from prior Year: No. Recommendation: We noted that MBTA revised its procedures to ensure system errors are identified prior to payroll being finalized and the programming error persisted for only a single pay period. However, we recommend that MBTA revise its Federal grant management procedures to ensure that costs incurred due to error or other types of unallowable costs are not included in subsequent reimbursement requests. View of Responsible Officials: Management agrees. See separately issued corrective action plan.