Finding Text
Finding 2024-002: Time and Effort Requirements (50000)
Repeat Finding? No
Assistance Listing No. 93.600 HeadStart
U.S. Department of Health & Human Services
Passed through Los Angeles County Office of Education (LACOE)
Criteria: To support salaries and wages for employees that work on federal programs, local educational agencies
(LEAs) are required to maintain time and effort records that accurately reflect the work performed. These time and
effort records must: (1) be supported by a system of internal control which provides reasonable assurance that the
charges are accurate, allowable, and properly allocated; (2) be incorporated into the official records of the LEA;
(3) reasonably reflect the total activity for which the employee is compensated by the LEA, not exceeding 100% of
compensated activities; (4) encompass both federally assisted and all other activities compensated by the LEA on an
integrated basis, but may include the use of subsidiary records as defined in the LEA’s written policy; (5) comply
with the established accounting policies and practices of the LEA; and (6) 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. Budget estimates or percentages determined before the services are performed alone do not qualify as
support for charges to Federal awards.
Condition: Four employees out of a sample of 16 total had exceptions related to proper time accounting
documentation.
Cause: The District did not have adequate oversight to ensure that sufficient time and effort procedures were
supported by documentation.
Effect: The District could be required to reimburse $59,287 in HeadStart funds using an unrestricted funding source.
Questioned Costs: The District did not provide documentation for $59,287 in salaries charged to HeadStart
programs.
Context: Four employees out of a sample of 16 total had exceptions related to proper time accounting
documentation.
Recommendation: The District must update its time and effort records and policies and procedures to ensure that
all salaries and wages charged to federal programs are properly supported by a system on internal controls.
Specifically, the time and effort records must accurately reflect the work performed and encompass all activities of
the employee, both federal and non-federal, and be signed in a timely manner.
Views of Responsible Officials: We recognize the importance of compliance with federal time and effort reporting
requirements for programs funded by restricted sources. The audit identified prior year charges for employees
originally funded by the Head Start program that lacked adequate time and effort documentation. While these costs
are generally allowable, we acknowledge the need for stronger documentation practices. To ensure compliance, the
District will conduct retraining sessions for relevant staff on federal time and effort reporting requirements. These
sessions emphasize proper documentation to support salary and wage charges to restricted funding sources. Moving
forward, additional review mechanisms are being implemented to avoid similar issues.