Finding Text
2022-004 Allocation of Program Effort by Employees – Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Federal Program: Research and Development Cluster (ALN 47.041, Award Period 9/1/19 – 8/31/22)
Federal Agency: National Science Foundation
Criteria: The financial management requirements include processes and controls over the allocation of personnel time and effort to program activities as required by 2 CFR 200.430.
Condition: Our testing of payroll expenses charged to the program noted that the Organization allocates senior personnel time and effort in one year end journal entry as a program expense. Upon review of the supporting documentation for the journal entry, it was noted that one individual included in the allocation was no longer an employee of the Organization during the year ended June 30, 2022.
Cause: The Organization lacks written policies, approval procedures and documentation to allocate senior personnel effort and time costs to program accounting records.
Effect: The Organization does not maintain a compliant effort system and is not in compliance with 2 CFR 200.430 which could lead to inaccurate allocation of personnel costs to the federal program.
Identification as a repeat finding, if applicable: The finding is a repeat of Finding 2021-005 in the prior year.
Recommendation: We recommend the Organization strengthen its controls and processes over time and effort allocations by establishing written policies, timesheet allocations, approvals and segregation of duties in compliance with 2 CFR 200.430.
Response: The Organization will improve its procedures for allocating senior personnel time and effort in its accounting and financial record keeping processes.
Questioned Costs: $10,000 – Based on the support for the journal entry, this is the amount allocated for the individual that was no longer an employee of the Organization during the year ended June 30, 2022.