Finding 2024-001: Inclusion of Out-of-Period Costs in Current Year (Significant Deficiency): During the audit of federal award expenditures for the fiscal year ended December 31, 2024, it was discovered that costs incurred in prior periods were improperly charged to the current year’s federal awards.
Name of Contact Person: Lucy Maddock, Chief Financial Officer email: lrm@ams.org
Corrective Action Plan:
The AMS processes payroll on a bi-weekly schedule. During the 2024 audit, we discovered that an initial payroll allocation for grant supported labor costs included days from the prior month that did not fall within the approved dates of the grant agreement. To ensure that this does not happen again the following procedures are being put into place effective immediately:
1. The grant accountant will review the payroll register at the beginning of each grant period and determine the actual percentage of payroll to allocate to the grant so that time periods are aligned. This may involve adjusting entries to accrue payroll into correct time periods. This will ensure costs incurred in prior periods are not charged to current year federal awards.
2. Grant payroll entries will be reviewed and approved by the Controller.
3. At the conclusion of the grant, all payroll entries will be reviewed one final time. Should any differences be found between the dates and amounts authorized by grant budget and those recorded in the G/L, correcting entries must be made before the final report is submitted to the cognizant agency.
Anticipated Completion Date:
These steps are being implemented effective immediately.