Finding Text
Federal Program:
ALN 14.218 - Community Development Block Grants/Entitlement Grants
Category:
Compliance/Internal control
Compliance Requirement:
Allowable Costs/Cost Principles
Criteria:
As part of the standards for documentation of personnel expenses (2 CFR §200.430 (i)), it is required that charges
to Federal awards for salaries and wages be based on records that accurately reflect the work performed and be
supported by a system of internal control that ensures accuracy, allowability, and proper allocation.
According to the record retention requirements (2 CFR §200.334), recipients and subrecipients are required to retain
all records for three years from the date of submission of their final financial report, or from the date of submission
of the respective reports if the award is renewed quarterly or annually.
The federal regulations require employers to verify the identity and employment authorization of individuals hired for
employment in the United States using the Employment Eligibility Verification form (I-9).
The EEOC's Enforcement Guidance on Harassment in the Workplace recommends that employers periodically
update their sexual harassment policies and conduct regular training to ensure compliance with federal antidiscrimination
laws.
2 CFR §200.112 requires that Federal agencies establish conflict of interest policies for Federal awards. Recipients
or subrecipients must disclose in writing any potential conflict of interest to the Federal agency or pass-through entity
in accordance with the established Federal agency policies. Regular updates to conflict-of-interest certifications are
recommended to ensure ongoing compliance.
As part of the BGCPR recruitment, selection, and hiring process, it is required that the employee file includes a copy
of form I-9 and a signed copy of the job description.
The protocol for disclosure of conflicts of interest establishes that as part of the recruitment procedures and on an
annual basis, all candidates for the board of directors, management teams, employees, and, in certain cases,
investors and donors are required to complete a conflict-of-interest disclosure form.
Condition:
There were significant gaps in the documentation of employee files, which pose potential noncompliance risks.
Cause:
Lack of monitoring procedures to ascertain compliance with federal, local and internal requirements.Effect or potential effect:
Failure to maintain proper documentation can result in non-compliance with federal regulations and organizational
policies, potentially leading to legal penalties and ethical breaches.
Questioned costs:
Not determined
Context:
The allowable activities/cost test revealed the following:
• One (1) of fifty (50) employees’ files tested did not have a copy of the Employment eligibility verification form (I-
9)
• Nineteen (19) of fifty (50) employees’ files tested did not have a copy of the signed job description.
• Forty-nine (49) of fifty (50) employees’ files tested did not have evidence of certification regarding compliance
with conflicts of interest protocol.
• Twenty-nine (29) of fifty (50) employees’ files tested did not have evidence of annual training of sexual
harassment.
Recommendation:
We recommended that BGCPR implement comprehensive record retention policies and ensure strict adherence to
established procedures. Additionally, BGCPR should establish monitoring procedures to ascertain the completeness
of employee files in compliance with regulatory requirements.
Views of responsible officials:
BGCPR acknowledges that document retention policy does not comply with the requirements set forth in Title 2 of
the Code of Federal Regulations (2 CFR §200.334). This regulation requires that all financial records, supporting
documents, statistical data, and other files related to federal grants be retained for a minimum period of three years
from the date of submission of the final financial report. In the absence of this policy, BGCPR exposes itself to risks
of non-compliance and possible sanctions during federal audits or reviews. Therefore, it is considered a priority to
develop and implement a document retention policy that ensures compliance with this regulation and strengthens
institutional transparency and accountability.
As a corrective measure, BGCPR will take the following actions and will anticipate completing on June 30, 2025:
a. Establish clear guidelines for the creation, storage, access, updating, and disposal of records.
b. Define retention periods in accordance with legal requirements.
c. Develop periodic monitoring procedures to verify record completeness and compliance.
d. Implement scheduled internal reviews and standardized checklists.
e. Assign specific responsibilities to Human Resources personnel for policy enforcement.