ACL Centers for Independent Living – Assistance Listing No. 93.435
Type of Finding: Allowable Activities and Allowable Costs – Payroll Disbursements
• Material Weakness in Internal Control over Compliance
Criteria or specific requirement: Per 2 CFR 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 award.”
Condition: Payroll allocation review is performed annually by ED, which is not timely
enough to accurately reflect employee's time worked. Additionally, the allocation
performed had logical errors, including one employee’s time missing from the allocation
calculation, and using an inappropriate allocation basis.
Questioned costs: None
Context: All employees included in selection deemed to work positions that are
allowable to the program, however the client allocation process unreliable for all
sections tested (25).
Cause: Allocations to program based on one employee's memory (ED) for full-year
organizational operations. Allocations not reviewed for accuracy by other individual.
Effect: Currently, all assigned work activities employees engage in are theoretically
allowable under the program, however if an employee were to work projects that are
not allowable under the Federal award, reimbursement requests could be made for
unallowable costs.
Repeat Finding: No
Recommendation:
1) Have employees enter time by period and ensure time codes reflect type of activities
worked that tie to Federal program allocations.
2) Have ED review employee timesheets each pay period.
3) Review allocations by program each pay period.
4) Have a second individual (contract accountant) review allocations to ensure accuracy
and completeness.
Views of responsible officials: There is no disagreement with the audit finding.
Action taken in response to finding: DEC employees enter their time by period and
code activities to the corresponding programs. Program Directors, then the ED reviews
all employees time sheets and allocations each pay period. DEC’s contract accountant
reviews monthly.
Name(s) of the contact person(s) responsible for corrective action: Kimberly Meck,
Executive Director
Planned completion date for corrective action plan: Already implemented.