Finding 529873 (2024-003)

Significant Deficiency
Requirement
B
Questioned Costs
-
Year
2024
Accepted
2025-03-25
Audit: 347902
Organization: The Registry, Inc. (WI)
Auditor: Wegner CPAS LLP

AI Summary

  • Core Issue: The Registry, Inc. failed to obtain necessary documentation for employee time and effort related to federal awards.
  • Impacted Requirements: This violates Title 2 U.S. CFR section 200.303, which mandates effective internal controls over federal awards.
  • Recommended Follow-up: Implement written policies for documenting employee time spent on grant activities to ensure compliance and support costs.

Finding Text

Assistance Listing Number(s): 93.575 Name of Federal Program or Cluster: CCDF Cluster Name of Federal Agency: Department of Health and Human Services Name of Pass-through Entity: Minnesota Department of Human Services Award Period: 7/1/2020-6/30/2024 and 7/1/2024-6/30/2026 Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) section 200.303 requires non-federal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the non-federal entity is managing the federal awards in compliance with the federal statutes, regulations, and terms and conditions of the federal award. Condition: The Registry, Inc. did not obtain support from the employee for time and effort used as the basis for allocating personnel costs to federal awards. Cause: The Registry, Inc. did not properly design policies and procedures to ensure time and effort reporting is maintained by employees, adequately and contemporaneously documented, and reviewed by supervisors or managers. Effect or Potential Effect: Costs not supported by adequate documentation could be disallowed. Repeat Finding: No. Recommendation: The Registry, Inc. should obtain time and effort documentation that supports the distribution of the employee's salary or wages among specific activities. The Registry, Inc. should design and implement written policies and procedures for personnel to document time spent on grant activities for every pay period, or monthly at a minimum. Views of Responsible Officials: The Registry, Inc. will implement written policies and procedures for personnel to document time spent on grant activities.

Corrective Action Plan

Action Taken: To better document the time and effort for salaried employees the following will take place to demonstrate and document the specific activities and any adjustment to the allocated amounts of the positions. On a quarterly basis the Director of Finance will work with the members of leadership that have positions allocated across various programs to identify the ongoing percentage of time spent on each of the different programs they support. The current percentage of their duties will be discussed with the employee and adjustments will be made to their percentage allocated in the payroll system based on the changes in duties and time spent on each of the programs. If no change is necessary, it will be noted in the minutes of the meeting. Additionally, during the contract renewal period or any contract amendment period the duties of all personnel who would be associated with that contract and program will be evaluated and the percentage of time to be spent on that contract will be document and updated in the payroll system if changes are warranted. Lastly, monthly if a salaried employee works on a different program or contract than their payroll allocation it will be adjusted on the monthly payroll expenditures spreadsheet and any reduction of duties or additions of duties will be reflected and this information will be retained by the Director of Finance for documentation. The basis for how each position percentage is determined for each contract will be documented during the contract or amendment process. (i.e. Director of HR percentage is determined based on the number of staff they support, the amount of turnover anticipated in the contract and the effort to work with the contract’s unique requirements of the personnel and how much the HR department is involved with these requirements.)

Categories

Subrecipient Monitoring Reporting Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1106315 2024-003
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.575 Child Care and Development Block Grant $121,275