Finding Text
Criteria: The Uniform Guidance, 2 CFR 200.430, requires that payroll charges be based on
actual costs incurred and accurately reflects the work performed. Further, documentation must be
maintained that supports payroll related costs that are allocated to more than one federal program
or to a federal program and nonfederal programs.
Condition: We selected thirty-five payroll transactions charged to the program with
thirty-five different employees. Of these thirty-five transactions, the Organization did not charge
100% of the employees’ payroll to the program for fourteen employees, indicating that the remaining
amount was charged to other federal and nonfederal programs. The Organization did not maintain
detailed timesheets or time studies to support the actual time spent on the activities funded by
the Coronavirus State and Local Fiscal Recovery Funds program that corresponded to the percentage
of time charged to this program for each employee. Our sample of payroll transactions totaled
$41,701 charged to the program of the total wages of these employees for these pay periods selected
of $59,886.
Cause and Effect: The Organization has not implemented procedures that require payroll costs that
are allocated to multiple programs be supported by detailed documentation (such as timesheets or
recent time studies) supporting the allocation. As a result, costs could be charged to federal
programs that do not coincide with actual work performed by the employee.
Auditors’
Recommendations: The Organization should establish policies to ensure that payroll costs charged
to multiple departments or programs be based on actual time incurred by each employee and that the
allocation be supported by time and attendance records.