Finding 499163 (2023-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2023
Accepted
2024-09-27
Audit: 321941
Auditor: Sax LLP

AI Summary

  • Core Issue: Salary expenses charged to Federal awards did not match approved timesheets, leading to potential inaccuracies in cost reporting.
  • Impacted Requirements: Compliance with 2 CFR 200.430(i) regarding accurate payroll documentation and internal controls.
  • Recommended Follow-Up: Ensure adherence to payroll policies and use timesheets as the basis for salary allocations to Federal awards.

Finding Text

Finding No. 2023-001: Allowable Costs/Cost Principles Program: AL# 10.331 - Gus Schumacher Nutrition Incentive Program (GUSNIP/GUCRR) Federal Grantor: U.S. Department of Agriculture Criteria – Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: I. Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; II. Be incorporated into the official records of the non-Federal entity; III. Reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; IV. Encompass both federally assisted and all other activities compensated by the non-Federal entity on an integrated basis; V. Comply with the established accounting policies and practices of the non-Federal entity; VI. 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. Citation – 2 CFR 200.430 (i) Condition – Salary expense allocated and charged to Federal awards did not agree to timesheet reports that were signed by the employee and their direct supervisor. Additionally, timesheets were not properly approved by a supervisor. Cause – Budgeted rates were used to calculate the amount charged to the grant. Employees that worked exclusively on the grant covered by the Federal award had timesheets to support the time spent on the grant. Effect – The amount of salary expense and related fringe benefits charged to the Federal award did not meet the criteria outlined above. This leads to a risk that inaccurate charges could be made to the Federal award. Questioned Costs – None – the Organization was able to provide alternative methods to demonstrate that costs charged to the grant were less than actual amount incurred.Context - For 2 out of 4 employees tested, the salary allocated did not agree to the timesheet reports. Additionally, for 1 out 4 employees tested, the timesheet did not reflect a supervisor approval/signature as required by the Organization’s handbook policy. Repeat Finding - Yes - Finding 2022-003. Please see Summary Schedule of Prior Year Audit Findings. Recommendation - We recommend that the Organization follows policies and procedures to ensure compliance with proper payroll documentation. We also recommend that timesheets be used to support all allocations as the basis for recording salary to the books and used as the source of costs that get charged to Federal awards. Views of Responsible Officials - See Corrective Action Plan.

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 499162 2023-001
    Material Weakness Repeat
  • 1075604 2023-001
    Material Weakness Repeat
  • 1075605 2023-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.331 Gus Schumacher Nutrition Incentive Program $277,405
93.667 Social Services Block Grant $148,383
14.218 Community Development Block Grants/entitlement Grants $105,974
10.170 Specialty Crop Block Grant Program - Farm Bill $37,421
10.175 Farmers Market and Local Food Promotion Program $13,436