Finding 567640 (2024-001)

Significant Deficiency
Requirement
A
Questioned Costs
$1
Year
2024
Accepted
2025-06-26

AI Summary

  • Core Issue: There is a significant deficiency in internal controls over compliance related to allowable activities for federal grants.
  • Impacted Requirements: Costs must be adequately documented and timesheets must match the allocated grant amounts.
  • Recommended Follow-Up: Management should verify that grant billing allocations align with timecards before seeking reimbursement.

Finding Text

Finding No. 2024-001: Allowable activities - Significant deficiency in internal control over compliance. Criteria: The Uniform Guidance requires that costs be adequately documented. The Organization’s internal control procedures over compliance specify that all employees’ timesheets and hours agree to the amount allocated to grant activities. Condition: During allowable cost testing for federal grants, for 2 out of the 25 payroll transactions tested, the amount charged to the grant did not agree to the employee’s approved percentage to be allocated to the grant. Cause: Formula errors on the allocation spreadsheet were not caught during the review process. Effect: The amount charged to the grant was less than the amount that should have been allocated to the grant. Recommendation: Management should ensure that the allocations on the grant billing sheet agree to the timecard prior to requesting reimbursement. Management’s Response: See corrective action plan.

Corrective Action Plan

Finding-001 Allowable Activities – Significant deficiency in internal controls over compliance (HOPWA Payroll Allocation) Management Response The organization recognizes the importance of ensuring that payroll allocations are properly supported by approved documentation. To address this finding, the agency has implemented the following corrective actions: • Annual training on grant-specific timekeeping and payroll allocation requirements hasbeen instituted for all employees whose salaries are charged to grants. • Updated Standard Operating Procedures (SOPs) have been issued to program directorsand payroll administrators outlining the necessary approval and documentation processfor payroll allocations. • Supervisory review and certification of payroll allocation reports have been implementedto ensure compliance with approved grant allocations prior to payroll processing. Training sessions will be held on: June 10, 2025 • June 10, 2025 (initial training session for all HOPWA-funded staff) • Refresher training will be scheduled annually each June going forward. Responsible Staff: Controller and Program Directors Implementation Date: June 2, 2025

Categories

Questioned Costs Allowable Costs / Cost Principles Cash Management Significant Deficiency

Other Findings in this Audit

  • 567641 2024-002
    Significant Deficiency
  • 567642 2024-001
    Significant Deficiency
  • 567643 2024-002
    Significant Deficiency
  • 1144082 2024-001
    Significant Deficiency
  • 1144083 2024-002
    Significant Deficiency
  • 1144084 2024-001
    Significant Deficiency
  • 1144085 2024-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
12.267 Youth Homelessness Demonstration Program $369,349
93.914 Hiv Emergency Relief Project Grants $187,815
14.267 Supportive Housing Program $117,733
14.241 Housing Opportunities for Persons with Aids $24,580
97.024 Emergency Food and Shelter National Board Program $9,999