Finding Text
Finding 2024-002 Payroll
Information on the Federal Programs: 93.421
Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Per 2
CFR 200.430(i) of the Uniform Guidance, charges to Federal awards for salaries and wages must
be based on records that accurately reflect the work performed. These records must support the
distribution of employees’ salaries among specific activities or cost objectives as required.
Condition: During our review of payroll charges to Federal awards, we noted that BCHC did not
use timesheets from January 2024 to August 2024 and recorded salaries based on budgeted
allocations. In August 2024, timesheets were implemented but we noted that the time recorded in
the general ledger did not coincide with the allocation on the actual timesheets.
Cause: BCHC relied on predetermined budget estimates for payroll allocation rather than using
timesheets that reflected actual hours worked.
Effect or Potential Effect: There is a risk that payroll costs charged to Federal programs may not
accurately represent the true level of effort, potentially resulting in unallowable costs being charged
to Federal awards.
Questioned Costs: Indeterminate-The questioned costs relate to salary and wage expenditures
charged to Federal programs without the required time and effort documentation in accordance
with 2 CFR §200.430. Specifically, employees whose compensation was allocated to Federal
awards did not maintain timesheets or equivalent records reflecting actual time worked on specific
Federal activities.
Due to the absence of these records, we were unable to determine the portion of personnel costs
that may be unallowable under Uniform Guidance. Accordingly, the questioned costs are
considered indeterminate.
Context: We sampled 40 payroll transactions. All transactions were based on budgeted amounts.
This issue was observed across all departments receiving Federal funds.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: While BCHC now maintains timesheets, we recommend ensuring that payroll
costs charged to Federal awards are based on the actual time recorded, rather than budgeted
estimates. The timesheet data should be used to support allocations in accordance with Uniform
Guidance, and adjustments should be made as needed to reflect the actual effort expended on
Federal programs.