Finding Text
Federal Agency: U.S. Department of the Treasury
Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: SLFRP0002 – 2021, SLFRP1045 – 2021, SLFRP0194 - 2021
Pass-Through Agency: Washington State Department of Commerce, City of Seattle, Snohomish County
Pass-Through Number(s): (DOC) 23-F21400119-017, DC222308, CLFR-042
Award Period: Various
Type of Finding:
• Significant Deficiency in Internal Control Over Compliance
Criteria or specific requirement: 2 CFR 200.430 states: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. In addition, records must 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 or a Federal award and non-Federal award. Further, budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.
Condition: For some paychecks tested, it was noted the percentage of hours worked on the Federal program as indicated on the timesheet did not always tie to the allocation spreadsheet which determined the payroll costs that was ultimately charged to the major program. In addition, for one employee paycheck tested that was partially allocated to the major program, it was found that there was an error in the calculation of a salary increase, which resulted in an incorrect amount being charged to the program.
Questioned costs: $2,339
Context: Of the 40 paychecks tested, 10 paychecks showed a potential over allocation of payroll costs to the Federal program. These over allocations varied from paycheck to paycheck and ranged from $5 to $1,648. One of the paychecks tested also included the miscalculation of salary amount.
Cause: The person responsible for allocating payroll is no longer employed with Ventures. Therefore, specific cause cannot be identified. It was noted, however, there were two allocation spreadsheet templates being used during this fiscal year causing both a redundancy of information and a lack of synchronized information in some areas. This was likely the main reason for the allocation related issues encountered during the audit. In addition, the miscalculation of the payrate that occurred was not detected by the organization’s internal controls.
Effect: Potential outcome is an overallocation to the Federal program leading to requests for reimbursement of funds (in the payroll expense category).
Repeat finding: No
Recommendation: We recommend the Organization utilize one spreadsheet for allocating payroll costs and implement additional controls to ensure the allocations to Federal grants accurately reflect the actual hours worked.
Views of responsible officials: There is no disagreement with the audit finding.