Finding 572350 (2024-001)

METROPOLITAN TRANSPORReference Number: 2024-001 Federal Agency: U.S. Department of Transportation Federal Program: Federal Transit Cluster ALN Number: 20.507; 20.525; and 20.526 Contract Number: C40261TECHINSP; C33941EFA-MTAB; C40265TECH-MTAB; U3NY-2023-101-02 and U9NY-2018-059-01 Requirement: Activities Allowed/Allowable Costs/Cost Principles MTA Agencies : MTA Bus; Staten Island Rapid Transit Operating Authority Type of Finding: Significant Deficiency-Non-Compliance 1. CRITERIA Activities Allowed/Allowable Costs/Cost Principles including Indirect Costs––Direct - As stated in Uniform Grant Guidance - §200 Requirements for Allowable Costs: a. Costs did not consist of improper payments, including (1) payments that should not have been made or that were made in incorrect amounts (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements; (2) payments that do not account for credit for applicable discounts; (3) duplicate payments; (4) payments that were made to an ineligible party or for an ineligible good or service; and (5) payments for goods or services not received (except for such payments where authorized by law). 2. CONDITION/PERSPECTIVE The MTA has Activities Allowed/Allowable Costs/Cost Principles including Indirect Costs procedures in place. MTA has corporate policies and procedures regarding Activities Allowed/Allowable Costs. We tested the Federal Transit Cluster’s Allowable Costs compliance. Based on our review of sixty samples related to Personnel Services and Other than Personnel Services for this cluster, we noted that four samples related to an MTA Bus Company personnel’s hourly rate were charged at higher rate. We noted that the rate per personnel file and employee payroll register differs from the actual rate used by the agency to charge labor costs. The agency calculated labor cost using the annual earnings that is divided by 52 weeks because there are 52 weeks a year, but MTA payroll department used 52.1428 weeks based upon 365/7 days a week, which created variances in labor costs billed and actual recorded labor costs. For Contract # - U3NY-2023-101-02 and U9NY-2018-059-01 – We noted two instances of sixty samples reviewed where the agency used 2023 approved overhead rate of 98.18% instead of the 2024 approved overhead rate of 98.98%. 3. CAUSE MTA did not ensure that all personnel hourly rates were charged at the correct amount. MTA did not ensure that correct approved indirect rate applied to the direct cost. Reference Number: 2024-001 Federal Agency: U.S. Department of Transportation Federal Program: Federal Transit Cluster ALN Number: 20.507; 20.525; and 20.526 Contract Number: C40261TECHINSP; C33941EFA-MTAB; C40265TECH-MTAB; U3NY-2023-101-02 and U9NY-2018-059-01 Requirement: Activities Allowed/Allowable Costs/Cost Principles MTA Agencies : MTA Bus; Staten Island Rapid Transit Operating Authority Type of Finding: Significant Deficiency-Non-Compliance 4. EFFECT The FTA may disallow reimbursement for the incorrect amounts reported and MTA may be considered non-compliant related to the Activities Allowed/Allowable/Cost Principles compliance requirements within 2 CFR- Part 200; Subpart E – Activities Allowed/Allowable Costs/Cost Principles. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend that MTA ensure that all personnel are reviewed and should be charged at the correct hourly rates as required by §200 CFR Subpart E – Allowable Costs. We also recommend that approved indirect rate applied to direct costs. 7. QUESTIONED COST Cannot be Determined. 8. VIEWS OF RESPONSIBLE OFFICIAL MTA is acknowledging the findings. MTA Bus Accounting will work with the project team to implement the correct rate and return the credit to FTA as needed. SIRTOA Finance will ensure that the overhead rates on the labor sheets reflect the correct percentage. Also, see “Corrective Action Plan”.