Finding Text
Finding 2023-001: Salary Allocations
Information on the Federal Programs: 93.070
Criteria: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430
“Compensation– personal services” requires that charges to Federal awards for salaries and
wages must be based on records that accurately reflect the work performed, and that these
records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: The Association uses an outsourced HR service to perform certain payroll functions,
including the allocation to cost centers based on timesheets. We noted that in some cases,
individuals had worked hours in excess of the standard working hours in a pay period. Instead of
allocating time proportionately based on the timesheet, the time was first reduced to the standard
hours required by reducing the overage against the code which had the most hours charged.
Cause: The allocation to programs was not based on total actual hours for employees who worked
more than the standard working hours for the period.
Effect or Potential Effect: The current allocation method may cause programs to be undercharged
or over-charged.
Questioned Costs: Undetermined
Context: APC uses timesheets to allocate time, however the allocation should be based on all
total hours worked.
Identification as a Repeat Finding: See finding 2022-001
Recommendation: We recommend that APC allocate time using all hours recorded by employees
on their timesheets. Outsourced service work should be reviewed by APC to ensure accuracy.