Finding Text
2023‐003 – Activities Allowed and Allowable Costs over Payroll Expenditures – Significant
Deficiency in Internal Controls over Compliance (Repeat Finding)
Federal Program Information:
Funding Agency: U. S. Department of Health and Human Services
Title: Head Start
CFDA Number: 93.600
Federal Award Identification number: N/A
Pass Through Entity: N/A
Award Year: 2023
Condition: During our review of transactions, appropriate approval was not included in supporting
documents. The following were noted:
In 7 of 40 payroll transactions tested, the Fiscal Officer reviewed payroll hours and pay rates
on the Payroll Review Form however this was dated on April 3rd or 4th of 2023 which is after
the expenditure was paid out.
Criteria: Per Title 2 US Code of Federal Regulations Part 200.303a, non‐federal entity 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 statutes,
regulations, and the terms and conditions of the Federal award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government” issued by
the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Questioned costs: None
Effect: Review of payroll amounts significantly after the pay period could result in over‐ or under‐pay
not being caught in a timely manner; or in misallocations to grants not being caught in a timely
manner. This could result in adjustments to employee pay required, or in inaccurate grant tracking
account account.
Cause: The Organization is not following its policies and procedures to ensure the appropriate
approvals are conducted in a timely manner.