Finding Text
Allocation of Salaries and Other Costs
Information on Federal Program: Unaccompanied Alien Children (Assistance Listing
No. 93.676) provided by the Department of Health and Human Services.
Criteria: The Agency must follow the requirements for allocating salaries as prescribed
by the Uniform Guidance and OCFS. The Uniform Guidance section 200.430 requires
charges to federal awards for salaries and wages to be based on records that accurately
reflect the work performed and include support for the distribution of time the employee
works on one or more federal award. In addition, budget estimates (i.e., estimates
determined before the services are performed) alone do not qualify as support for charges
to Federal awards.
Condition: Currently, the Agency charges direct salaries based on time and attendance
records, however, other administrative costs such as maintenance, food costs and general
administrative salaries were allocated based on the budget established with granting
agencies. In addition, there was limited support for how costs were actually allocated.
Questioned Costs: None
Cause: Due to turnover in the CFO position, the previous methodology of allocating costs,
which was based on the actual direct costs for the month, was unable to be recreated.
There was also no review or reconciliation of expenses in comparison to the budgeted
amounts that were approved by the granting agency to ensure that the Agency did not
overspend the grant.
Effect: Charges to the federal grants may not be accurate or may be in excess of the
amounts budgeted and approved by the granting agency.
Perspective Information: Payroll and disbursement transactions under the Federal
program are tested for compliance with the grant documentation as part of the audit
procedures. Repeat Finding: Yes
Recommendation: The Agency should consider creating an allocation methodology for
the salary and other costs related to the Federal program that is based on actual results,
such as the actual direct costs for the month. The Agency should also develop a tracking
methodology to ensure they do not overspend in any areas of the approved budget by the
funding agency.
Views of the Responsible Officials and Planned Corrective Actions: The Agency’s
management agrees with this finding and during the upcoming fiscal year the Controller
will work with various departments within the Agency to identify items that are direct
charges or allocated based on percentages to the Unaccompanied Alien Children (UAC)
grant where possible. Additionally, the Controller will implement quarterly time studies
for allocated department salaries to ensure there is supporting documentation. Lastly,
during the upcoming fiscal year the Controller will review, on a monthly or quarterly
basis, the incurred expenses compared to the UAC approved budget.