Finding Text
2024-002 Distribution of Compensation – Compliance and Internal Controls over Allowable Costs and Activities (Material Weakness)
Federal Program Information:
Funding Agency: U.S. Department of the Treasury
FALN: 21.027
Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards.
Pass Through Entity: Multiple entities. See Schedule of Expenditures of Federal Awards.
Award Year: 2023-2024
Funding Agency: U.S. Department of Homeland Security
FALN: 97.024
Federal Award Identification Numbers: All under this program. See Schedule of Expenditures of Federal Awards.
Pass Through Entity: Multiple entities. See Schedule of Expenditures of Federal Awards.
Award Year: 2021-2024
Criteria: Under 2 CFR Section 200.303(a), non-federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award.
Additionally, under 2 CFR Section 200.430(i) compensation records must support the distribution of the employee’s compensation among specific activities or costs objectives if the employee works on more than one Federal award and compensation of employees used in meeting cost sharing or matching requirements on Federal awards must be supported in the same manner.
Condition: The time and effort spent on the federal program per the timesheets did not support the amounts charged to the 21.027 federal program. Additionally, multiple timesheets were not properly approved for both 21.027 and 97.024 federal programs.
Effect: The lack of controls to ensure the correct amounts are charged to the federal program based on the time and effort of the personnel could result in charging unallowable costs to the federal program.
Cause: The Association became aware of the requirement to properly maintain documentation to support time and effort per grant during the fiscal year ended June 30, 2024, and was not able to implement proper procedures and controls for the entire fiscal year.
Known Questioned Costs: FALN 21.027- $8,414; FALN 97.024 - None
Likely Questioned Costs: FALN 21.027- $67,725; FALN 97.024 - None
Perspective: This finding represents a systemic problem as it affects both the allowable activities, allowable costs and period of performance requirements.
Repeat Finding: No
Recommendation: We recommend the Association establish policies and procedures to ensure that compensation is properly documented and distributed between Federal awards and properly approved.