Finding Number: 2023-005 Activities Allowed or Unallowed; Allowable Costs/Cost Principles (Material Weakness)
Programs:
Unaccompanied Alien Children Program
ALN#93.676
Contract#: 90ZU0323 & 90ZU0548
Contract Period: 07/01/22 - 06/30/23
Planned Corrective Action: The auditors noted that management’s method for allocating shared personnel costs was performed after the close of the fiscal year, rather than through timely allocations made throughout the year. Additionally, during testing of 60 payroll samples, the auditors were unable to obtain sufficient documentation to support the approved pay rates for two employees.
Beginning in FY 2025, personnel costs are being manually recorded to the correct cost centers in Serenic Navigator each month. A parallel review of employee setups in ADP, our payroll system, led to the reassignment of staff to appropriate cost centers as needed. Going forward, ADP cost center assignments will be reviewed monthly to reflect any departmental changes. These steps are expected to reduce manual adjustments, improve the accuracy of interim financials, and ensure more precise federal and program drawdowns.
With respect to the two instances where documentation supporting employee pay rate approvals could not be located, management acknowledges the oversight. These cases appear to be isolated. To address this, we have implemented a more formalized process for documenting and storing all personnel actions, including pay rate approvals. All compensation-related approvals are now required to be documented in writing and retained in a centralized digital personnel file accessible to HR and Finance.
These corrective actions are intended to strengthen internal controls over payroll and personnel cost allocations and ensure full compliance with federal and organizational requirements going forward.
Person Responsible: The Executive Director and Chief Financial Officer
Completion Date: April 30, 2025