Finding Text
Federal Program Title: Community Development Block Grants/Entitlement Grants
Federal Catalog Number: 14.218
Federal Agency: U.S. Department of Housing and Urban Development
Category of Finding: Activities Allowed or Unallowed and Allowable Costs/Cost
Criteria: In order to receive cost reimbursement under federal awards, costs must meet the criteria
contained in 2 CFR Part 200, section 4-14.218, including that the cost has been adequately documented.
Condition: Documentation of salaries and wages claimed as CDBG expenditures was lacking. Several
personnel action forms for employee records were missing and not all timesheets provided had evidence
of review by a supervisor.
Cause: Lack of internal controls and a consistent timesheet reporting and approval process over payroll.
Effect or Potential Effect: The City could be charging inaccurate or unallowable amount of payroll
expenditures to the CDBG program.
Questioned Cost: None
Context: We selected a sample of 25 payroll records. Our review identified the following:
1 out of 25 payroll selections did not have an approved timesheet. Necessary signature of
department head/supervisor not found on employee timecard.
3 out of the 25 payroll selections did not have accurate Personnel Action Form (PAF) information
in the employee records to match the pay rate of the employee. 1 employee used twice in testing
had no record of PAF in employee files. The other exceptions are due to a discrepancy in pay
rate per the employee payroll register and the employee updated PAF. Per Employee MOU, this
employee should only have a pay increase of 2.5%, however the employee payroll register
showed an increase of 3%.
Statistical Sampling Validity: Yes
Repeat of a Prior-Year Finding: Yes, 2020-001, 2019-001.
Recommendation:
We recommend the City to strengthen their procedures in place in relation to the timesheet
approval process by implementing uniform policies and procedures across all departments to
only process time records after proper review and approval has been completed and signed off.
The City should implement a secure way for retaining documentation vital to employee records
and be able to update documentation when any changes to employee information is made.
The City should have a documentation in place to support allocation method and calculations
used during the year.
City's Response: There has been a turnover in staff that were responsible for applying the
internal control during the Fiscal Year 2020. The City is in the process of finalizing an official
timesheet approval process beginning in Fiscal Year 2024.
Corrective Action Plan: The City will be updating the payroll process in FY 2024, to include a
centralized retention plan related to payroll records.
Planned Implementation Date: Fiscal Year 2024
Responsible Person: Finance & Human Resources Department