Finding Text
Finding 2023-003 - Noncompliance and Significant Deficiency over Allowable Activities and Costs
Criteria
In accordance with 2 CFR 200.430(i)(1), the Organization is required to maintain documentation of personnel
expenses that are “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.”
Condition
During testing of payroll transactions, we were unable to agree direct costs charged to the grant to the detail backup
documentation retained. In addition, one individual, who was 100% funded by the grant, had costs in excess of
100% of compensated activities charged to the grant. Internal controls were not present or functioning to prevent
excess costs from being allocated to the grant.
Cause
The Organization did not have appropriate internal controls in place over allowable costs and allowable activities
which allowed for inaccuracies in payroll amounts claimed for reimbursement.
Effect
Payroll charges to the grant were unsupported.
Questioned Costs
Projected questioned costs were $5,073.
Recommendations
We recommend the Organization implement internal controls to ensure direct costs reported and reimbursed under
the grant are accurate and allowable.
Views of Responsible Officials
We have increased personnel and have the support needed to implement our accounting policies.