Finding Text
Criteria – 2 CFR §200.430(g) – Standards for Documentation of Personnel Expenses require that charges
to federal awards for salaries and wages must be based on records that accurately reflect the work
performed and are supported by a system of internal control which provides reasonable assurance that
charges are accurate, allowable, and properly allocated. Estimates determined before services are
performed do not qualify as support.
Condition/context – A sample of 9 payroll expenditures was selected for testing. The total population of
payroll expenditures charged to the food distribution cluster grants was $1,396,059. For all 9 selections,
the Organization was unable to provide evidence of actual time spent on each grant. The Organization
allocates personnel expenses to federal awards using estimates, not records that accurately reflect the
work performed. The Organization estimates how much time each employee spends on activities
allowable for each grant, but these estimates are not supported by records that reflect the work
performed. The Organization has an electronic timekeeping system, but the system does not track the
activities an employee performs. Employees are not required to complete certifications or Personnel
Activity Reports (PARs) to support the hours worked on allowable activities.
Our sample was not, and was not intended to be, statistically valid.
Questioned costs – ALN 10.565 - $8,192, ALN 10.568 - $1,323,021, ALN 10.182 - $64,846
Total questioned costs for all programs – $1,396,059, which is the total payroll expenditures charged to
the food distribution cluster grants.
Cause/effect – The Organization has not developed a system of internal control which provides
reasonable assurance that charges are accurate, allowable, and properly allocated. Personnel expenses
charged to federal awards are not supported by records that reflect the work performed.
Repeat finding – No.
Recommendation – We recommend the Organization establish a system of time and effort reporting that
meets the standards for documentation of personnel expenses, and a system of internal control that
provides reasonable assurance that the charges are accurate, allowable and properly allocated.