Finding Text
Type of Finding:
"• Significant Deficiency in Internal Control over Compliance"
Criteria or specific requirement: Per §200.303, non-Federal entities must "establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues, regulations, and the terms and conditions of the Federal awards." Additionally, non-Federal entities must charge salaries and wages "based on records that accurately reflect the work performed" (§200.430(i)).
Condition: Harvest Against Hunger allocates costs to the program based on the available funding and number of employees working on the project. They do not use the timesheet to record the operating hours for the program, but rather management makes a judgmental decision based on their understanding of program operations during the payroll period.
Questioned costs: None
Cause: The Organization lacks documentation supporting the allocation determination used to determine payroll amounts charged to the major program.
Effect: Without proper documentation of the payroll allocation used, the Organization could charge time to a federal program that does not reflect true expenditures incurred by that program.
Repeat Finding: This is not a repeated finding.
Recommendation: The Organization should implement policies for consistently determining time allocation to the federal program, and ensure internal controls help to ensure this allocation is correct and consistently documented.
Views of responsible officials: There is no disagreement with the finding.