Finding Text
Significant Deficiency
Other Noncompliance
Program: Assistance Listing: 10.553/10.555 – Child Nutrition Cluster
Assistance Listing: 84.010A - Title I Grants To Local Educational Agencies
Assistance Listing: 84.027/84.027X/84.173/84.173X – Special Education Cluster (IDEA)
Repeat Finding: Yes
Criteria: Section 2 CFR 200 and other federal regulations require that payroll expenditures for a grant be
documented with accurate records reflecting the work performed by each employee. This
includes maintaining time sheets, pay stubs, and other payroll records to ensure charges are
allowable, accurate, and properly allocated to the specific grant. These records must be kept for
at least three years after the final financial report is submitted.
Subgrantees must also ensure that employees paid with federal funds maintain time distribution
records, known as time and effort reports. Specifically, Section 200.430 states: “Charges to
Federal awards for salaries and wages must be based on records that accurately reflect the work
performed. These records must be supported by a system of internal control which provides
reasonable assurance that the changes are accurate, allowable, and properly allocated.
Condition: The District’s its present internal control policies and procedures are not sufficient to ensure
compliance with controls contained in the District’s Federal Programs Procedural Handbook as
well as requirements contained in Section 2 CFR 200.
As a result of our statistically valid random sample of forty payroll disbursements included in
grant expenditures for the major federal programs, we observed the following:
One instance where the salary approved by the board was more than the salary paid to the
employee.
One instance where an employee’s time sheets were not approved by their direct supervisor.
Six instances where we were unable to observe the required semi-annual certifications for
employees working under a single cost objective.
Two instances where we were unable to observe pro-rated timesheets for employees that
work on multiple cost objectives.
Context/
Perspective: This finding is a result of our statistically valid random sample of forty payroll cash
disbursements for single audit purposes.
Cause: The cause is likely a failure to monitor and fulfill the District’s present internal controls.
Effect: Failure to follow the federal requirements could affect future eligibility for federal award
programs or could result in a loss or misappropriation of public assets.
Questioned Costs: None
Recommendation: We recommend that the District implement additional internal controls to ensure that the
District maintains the required payroll documentation as well as the required semi-annual
certifications necessary for employees who work on a single cost objective and are paid
through federal grants and prorated timesheets that are necessary for employees who work on
multiple cost objectives.
Views of
Responsible
Officials: The Auditee’s Corrective Action Plan lists the District’s response to the findings.