Finding Text
2021-004- Distribution of Hours Worked (NC}
Federal Program Title:
Federal Catalog Number:
Federal Agency:
Pass-Through Entity:
Federal Award Number and Year:
Category of Finding:
Section 8 Housing Choice Vouchers
14.871
U.S. Department of Housing and Urban Development
Not applicable
CA-071 - 2021
Allowable CosUCost Principles
Criteria: Title 2, Subtitle A, Chapter II, Part 200, General Provisions for Selected Items of Cost, Section
200.430, Compensation - Personal Services requires that costs of compensation are allowable to the
extent that they satisfy specific requirements which in include that the total compensation of individual
employees is determined and supported as provided in the Standards for Documentation of Personnel
Expenses. The said standards require charges to Federal awards for salaries and wages must be based
on records that must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated.
Federal award recipients should 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; a Federal
award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect
activities which are allocated using different allocation bases; or an unallowable activity and a direct or
indirect cost activity.
Condition: If an employee works on more than one program or fund, the employee's salary or wages
and benefits are distributed by the City to the respective programs or funds based on the number of hours
worked. The basis for the distribution is the employee's timecard. During our audit, we noted one
employee's timecard did not indicate the number of hours worked for Section 8 or another program/fund,
however only 10% of his/her payroll cost was charged to Section 8.
Cause: The City was unable to provide the timecard that showed the hours worked by the employee by
program/fund.
Effect or Potential Effect: Over or understatement of payroll cost charged to the program.
Questioned Cost: None.
Context: One exception out of 20 sample items.
Statistical Sampling Validity: Samples are haphazardly selected.
Repeat of a Prior-Year Finding: No
Recommendation: We recommend that the City improve procedures to ensure that they retain all
timecards that reflect the distribution of costs to programs/funds and make them available for the auditors.
Management Response and Corrective Action Plan
City's Response: The City concurs with the recommendation.
Corrective Action Plan: The payroll policy will be updated to require that timecards be updated
with supervisor signature if changes are made to change allocation to another fund.
Planned Implementation Date: June 30, 2024
Responsible Person(s): City Controller