Finding Text
Allowable costs – Payroll
Criteria
Except where otherwise authorized by statute, cost must meet the following general criteria in order to be allowable under federal awards;
1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E.
2. Conform to any limitations or exclusions set forth in 2 CFR Part 200, Subpart E or in the federal award as to types or amount of cost items.
3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity.
4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost.
5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR Part 200.
6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period.
7. Be adequately documented.
Condition
During the audit of payroll expenses charged to the program, it was noted that four samples have Personnel Action Forms (PAF) without the signature of the General Manager. Per current policies and procedures, for pay rate changes, a PAF should be created by the HR Manager and signed by the General Manager.
Additionally, MARTA was unable to provide PAF for four samples.
Cause
The PAFs without final signature were not submitted to the General Manager. There was also difficulty in finding the missing PAFs which might be due to a lack of proper file management.
Effect
The absence of approval and adequate documentation raises the risk of non-compliance with federal regulations, which could lead to potential disallowances of costs.
Questioned Costs
None
Recommendation
MARTA should strengthen its internal controls over the payroll process by ensuring that all PAFs are reviewed for accuracy and properly approved. MARTA should ensure that PAF and timecards are adequately documented and filed.
Views of Responsible Officials and Planned Corrective Action
The HR Manager will review the procedures for processing PAF, communicate more effectively to close the loop on paperwork process, and confirm authorized signatures. The HR Manager will review all files for completed PAF forms and practice better diligence going forward in maintaining all documentation in personnel files.
Personnel responsible: Jacob Phillips, HR Manager
Anticipated completion date: Effective immediately