Finding Text
2024-001 Internal Control over Compliance with Activities Allowed or Unallowed and Allowable Costs and Cost Principles
Information on the Federal Program:
Federal Agency: National Endowment for the Humanities
ALN Number: 45.130 Promotion of the Humanities – Challenge Grants
Federal Program: African American History Interpretation Endowment CZ-50176-08
Criteria: In accordance with §200.303 Internal Controls, a non-federal entity must (a) establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award.
Condition: During our testing of the allowability of expenses, we noted that the review and approval of personnel salaries charged to the program was not performed timely for the program. The review of personnel salaries charged to the program to determine if they are allowable is performed on an annual basis by the Program Executive Director. This review was performed during the audit after the Schedule of Expenditures of Federal Awards and expense population had been provided to the auditors. Out of the two control samples tested for the major program, one sample had a review that was not performed timely.
Cause: Policies and procedures were not appropriately adhered to, resulting in time charged to the program not being reviewed and approved prior to the costs being charged to the federal program. In addition, there was a change in the program executive director near year end, resulting in the delay in the review performed.
Effect or Potential Effect: The untimely review of payroll hours charged to the program could result in unallowable costs being charged to the program.
Questioned Costs: None noted. Based on the testing performed by BDO, the payroll costs charged to the program were deemed to be accurate and allowable.
Context: This is a condition identified per review of Colonial Williamsburg’s compliance with the allowability provisions of the Uniform Guidance. The prevalence of these findings is detailed in the condition section above. Samples were selected using a non-statistical method.
Repeat Finding: This is not a repeat finding from the prior year.
Recommendation: The timely review of payroll costs charged to the grant is imperative to ensure that only allowable costs are charged to the grant. We recommend that Colonial Williamsburg ensure its policies and procedures are followed on a consistent basis.
Views of Responsible Officials: Management agrees with this finding. The program director will review the payroll data quarterly to ensure that the costs are accurate and allowable and provide documented evidence of timely review to the Grant Officer.