Finding Text
U.S. Department of Education
AL 84.010A Title I, Basic Grants to Local Education Agencies
AL 84.010A Title I, Part A - Investment in Schools 2
AL 84.367A Title II: Improving Teacher Quality State Grants
AL 84.424A Title IV: Student Support and Academic Enrichment Grants
Type of Finding – Noncompliance and Significant Deficiency over Activities Allowed or Unallowed and Allowable Costs/Cost Principles (Payroll)
Repeat Finding: No
Condition
During our tests of compliance for activities allowed or allowed and allowable costs/costs principles (payroll), the School was unable to provide the personnel action form for 4 out of 25 transactions randomly selected for testing. Additionally, 2 out of 25 the payroll transactions had instances the amounts charged to the federal program did not agree to the time and effort reporting and the associated payroll registers.
Criteria
In accordance with 2 CFR 200.430: (i) Standards for Documentation of Personnel Expenses (1) Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non-Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; (iv) Encompass both federally assisted and all other activities compensated by the non-federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-federal entity’s written policy; (v) Comply with the established accounting policies and practices of the non-federal entity; and (vi) 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.
According to AM 413-60, Grant Documentation, Grant Manager/Program Manager/Director conducts ongoing monitoring and control of all reimbursement receipts and deposits until grant ends; as well as all program and sub-recipient (when applicable) documentation, to include: (1) program documentation; (2) timesheets; (3) deliverables; (4) activities; (5) vendor payments; (6) program data/charts/numbers; and (7) financial and compliance report.
According to AM 413-61, Grant Management Financial Reporting, Grant Manager/Program Manager/Director maintains all documentation, either electronic or hard copy, for all Federally funded grants for the term of the grant for a minimum of seven years for review and audit by the granting agency or its designee. Cause
The School did not maintain adequate internal controls over activities allowed and allowable costs/costs principles.
Effect
Unallowed payroll costs could be charged to federal grants.
Recommendation
Internal controls over financial reporting should be designed to prevent, detect or correct, errors in a timely manner. Without adequate controls, the School cannot provide reasonable assurance transactions charged to federal grants are accurate.
Questioned Costs
$6,385
Management’s Response
The School agrees with the finding. See Schedule of Correction Action Plans.
Auditor’s Conclusion:
Finding remains as stated.