Finding Text
Department of Health and Human Services
Temporary Assistance for Needy Families, 93.558, Affects awards FAST X for the year ending 12/31/2024 and Benefits Cliff for the year ending 12/31/2024 under assistance listing 93.558
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Significant Deficiency in Internal Control over Compliance
Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Goodwill-Easter Seals Minnesota’s internal control structure should be designed to properly follow the allocation policy for employees’ pay to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota.
Condition: Goodwill-Easter Seals Minnesota has an internal control system designed to detect or prevent improper allocation of employees pay to grants in a timely manner in accordance with their established policy, however, during the year for two pay periods tested, it did not identify errors in the process.
Cause: Goodwill-Easter Seals Minnesota has a process for allocating employee wages based on hours worked. The controls in place did not operate as designed and failed to detect errors in the allocation of employee pay to the grants.
Effect: Employees had some of their pay allocated improperly and not in accordance with the policy established.
Questioned Costs: None reported.
Context/Sampling: A nonstatistical sample of seven pay periods out of 26 were selected for testing which accounted for $1,458,797 of $2,490,122 of federal program expenditures.
Repeat Finding from Prior Year: No
Recommendation: We recommend that management develop a more extensive review over payroll allocation to ensure pay is properly allocated to each grant in accordance with the policy established by Goodwill-Easter Seals Minnesota.
Views of Responsible Officials: Management agrees with this finding.