Finding 524094 (2024-001)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2024
Accepted
2025-02-20

AI Summary

  • Core Issue: Employee overtime hours were not allocated to the correct programs, leading to misrepresentation of labor costs.
  • Impacted Requirements: Non-compliance with Uniform Guidance (2 CFR Part 200) regarding proper allocation of labor costs could affect grant funding and financial reporting.
  • Recommended Follow-Up: Update the payroll system to automatically allocate overtime hours to the appropriate programs to ensure compliance and accurate reporting.

Finding Text

Finding 2024-001: Payroll Allocations Information on the Federal Program: 93.073 - Centers for Disease Control and Prevention: Birth Defects and Developmental Disabilities, Prevention and Surveillance. See Finding 2024-001. Criteria or Specific Requirement: Under Uniform Guidance (2 CFR Part 200), specifically § 200.430 (Compensation – Personal Services), labor costs must be allocated to programs based on actual time worked by employees on those specific programs. The guidance also mandates that overtime pay must be allocated in proportion to the time worked across the different programs. Failure to properly allocate employee time and overtime costs could result in non-compliance with Federal grant requirements, misreporting of program costs, and inaccurate financial statements. Condition: During the audit for the fiscal year ended June 30, 2024, it was found that employee time worked, including overtime hours, was not being properly allocated to the various programs. Specifically, overtime hours worked by employees were not included in the program allocations, resulting in the misallocation of labor costs. In several cases, overtime worked by employees on specific programs was omitted or incorrectly allocated, leading to a misrepresentation of actual program costs. Cause: Overtime hours were excluded from program allocations entirely. Effect or Potential Effect: Due to incorrect allocation of hours, including overtime, the financial statements inaccurately reflect the costs of various programs or projects. Many programs, especially those funded by grants or other restricted funding sources, require accurate reporting of labor costs. The failure to allocate overtime to the appropriate programs could result in non-compliance with the terms of those grants or funding agreements, potentially leading to audits, penalties, or the loss of funding. Questioned Costs: None. Context: CHADD misallocated time to programs for any employee that worked overtime for the fiscal year ending June 30, 2024. Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: The payroll system should be updated to automatically calculate and allocate overtime hours to the correct program or project. This should be integrated with the standard time allocation processes, ensuring that overtime pay is properly distributed across programs.

Corrective Action Plan

View of Responsible Officials: We have implemented a new payroll recording feature that captures all staff time including overtime.

Categories

Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 524095 2024-002
    Significant Deficiency
  • 1100536 2024-001
    Significant Deficiency
  • 1100537 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.073 Birth Defects and Developmental Disabilities - Prevention and Surveillance $806,714