Finding 539637 (2024-002)

Significant Deficiency
Requirement
AB
Questioned Costs
-
Year
2024
Accepted
2025-03-28
Audit: 350179
Organization: Nbcc (CA)

AI Summary

  • Core Issue: NBCC inaccurately allocated employee time for payroll, failing to reflect actual hours worked.
  • Impacted Requirements: Violations of CFR Part 200.430 and 200.431 regarding accurate documentation for Federal awards.
  • Recommended Follow-Up: Establish robust internal controls to track and document hours worked per employee and grant.

Finding Text

Criteria Part 2, CFR Part 200.430 notes “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed”. The document continues to state that documentation must “Support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non-Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity.” Additionally, Part 200.431 states “The cost of fringe benefits in the form of regular compensation paid to employees during periods of authorized absences from the job, such as for annual leave, family-related leave, sick leave, holidays, court leave, military leave, administrative leave, and other similar benefits, are allowable is all of the following criteria are met:”. The criteria include that “the costs are equitably allocated to all related activities, including Federal awards.” Condition While performing tests of NBCC’s internal controls over payroll transactions, we noted the Organization had incorrectly allocated time for 8 of the 50 selections. Additionally, we noted that the Organization had allocated time for leave based on pre-determined budgets, rather than actual hours worked in the pay period, for 27 of the 50 selections. Cause NBCC has not implemented proper internal control policies to adhere to the requirements of the Uniform Guidance. Repeat Finding No. Effect Noncompliance may impact future funding from Federal awards. Recommendation We recommend NBCC implement proper internal control procedures to document hours worked, by employee and by grant; and maintain the documentation to support charges allocated to each Federal award.

Corrective Action Plan

iv. Management Response and Corrective Action Plan: Program staff allocate their time spent at work each day based on their client load and recurring weekly activities, e.g., case conferencing meetings. Staff must allocate their daily time and activity hours on their timesheets corresponding to the project/s each client is enrolled in. Leave allocations should reflect each payroll period’s project time and activity actual percentages. Staff must manually record this information on complicated timesheets and consequently errors are made as not all staff are equally administratively adept. While there are multiple levels of review over timesheets, as the company has grown, it has become apparent that NBCC must integrate a more reliable method of always ensuring accurate allocation calculation of regular and leave hours. The expectation was that our new payroll solution provider, Paychex, was going to custom tailor a system that prevented such calculation errors, but this has not been the case thus far. Therefore, NBCC is actively once again researching payroll companies in an effort to find a solution better aligned with our timesheet needs. In the interim, management will work to edit our existing timesheet template to create a more user-friendly timesheet tool that auto-calculates where necessary and as appropriate so as to avoid misallocation. Management will also conduct additional timesheet trainings with staff as necessary. The end goal will be to secure a new payroll solution provider with system functionality that eliminates this kind of human error. v. Contact Person (s) Responsible for Corrective Action: Kristine Schwarz, Executive Director, kschwarz@sbnbcc.org Victoria Garfield, Grants Administration Director, vgarfield@sbnbcc.org Michael Dzierski, Finance Director, mdzierski@sbnbcc.org vi. Anticipated Completion Date: The anticipated completion date of the first step of editing our existing timesheet and retraining all staff as necessary is June 30, 2025. The anticipated completion date of the second step of having an integrated new payroll system with a new payroll solution provider will be dictated by the identification of a new vendor, and the subsequent development and implementation process of the new system, with an estimated completion date of December 31, 2025.

Categories

Allowable Costs / Cost Principles Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 539638 2024-003
    Significant Deficiency
  • 539639 2024-004
    Significant Deficiency
  • 539640 2024-005
    Significant Deficiency
  • 539641 2024-002
    Significant Deficiency
  • 539642 2024-004
    Significant Deficiency
  • 539643 2024-002
    Significant Deficiency
  • 539644 2024-004
    Significant Deficiency
  • 539645 2024-002
    Significant Deficiency
  • 539646 2024-004
    Significant Deficiency
  • 1116079 2024-002
    Significant Deficiency
  • 1116080 2024-003
    Significant Deficiency
  • 1116081 2024-004
    Significant Deficiency
  • 1116082 2024-005
    Significant Deficiency
  • 1116083 2024-002
    Significant Deficiency
  • 1116084 2024-004
    Significant Deficiency
  • 1116085 2024-002
    Significant Deficiency
  • 1116086 2024-004
    Significant Deficiency
  • 1116087 2024-002
    Significant Deficiency
  • 1116088 2024-004
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $317,640
64.033 Va Supportive Services for Veteran Families Program $277,994
14.267 Continuum of Care Program $164,345
14.239 Home Investment Partnerships Program $157,142
14.871 Section 8 Housing Choice Vouchers $73,306
14.231 Emergency Solutions Grant Program $68,280
14.219 Deleted $42,295
14.218 Community Development Block Grants/entitlement Grants $25,788