Finding Text
Condition: We selected a sample of payroll cost allocations and tested whether the employees’ time
were allocated in accordance with Day One’s cost allocations by program. As a result of our test, we
noted that one employee’s hours were did not match the allocation guidelines provided by the
Organization and hours were improperly charged to the Substance Abuse Prevention and Control
program.
Criteria: § 200.405 Allocable costs. (a) A cost is allocable to a particular Federal award or other cost
objective if the goods or services involved are chargeable or assignable to that Federal award or cost
objective in accordance with relative benefits received. This standard is met if the cost:
(1) Is incurred specifically for the Federal award;
(2) Benefits both the Federal award and other work of the non-Federal entity and can be distributed
in proportions that may be approximated using reasonable methods; and
(3) Is necessary to the overall operation of the non-Federal entity and is assignable in part to the
Federal award in accordance with the principles in this subpart.Cause: The Organization has not implemented policies and procedures requiring management
review the accuracy of the costs allocations to each program prior to being recording in the
accounting records.
Questioned Costs: $1,282.83
Effect and Context: By improperly allocating payroll costs to the Substance Abuse Prevention and
Control-CPS program, the amount of costs reported for this program are overstated at June 30, 2022.
Recommendation: We also recommend management review allocation percentages and application
of allocations prior to recording the costs in the accounting records.
Management’s Response and Corrective Action Plan: See management’s responses documented on
page 46-47.