Finding Text
2024-002: Controls for Monitoring Payroll Charged to the Grant
Previously reported as 2023-001. Special Education Cluster and COVID-19 Education Stabilization
Special Education Grants to States – Federal Assistance Listing Number 84.027
Special Education Preschool Grants – Federal Assistance Listing Number 84.173
COVID-19 Education Stabilization Federal Assistance Listing Numbers, 84.425, 84.425D, and 84.425W.
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Compliance and Internal Control Over Compliance – Other Matter
Criteria or Specific Requirement: Grantees must provide reasonable assurance that Federal awards are expended only for allowable activities and that the costs of goods and services charged to Federal awards are allowable and in accordance with the applicable cost principles.
Condition: Management has established written guidelines and policies outlining the time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such guidelines and policies indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) or time and effort reports are required and when this information must be provided to the school business office. These guidelines and policies were not fully adhered to or followed.
Questioned Costs: None reported.
Context: Payroll expenditures charged to the programs are required to be supported with documentation substantiating that the employees are eligible to be charged to the grant and that the payroll charged relates to time spent accomplishing grant objectives. This supporting documentation should be standardized and should include all required elements in accordance with Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments.
The City did not have an adequate system of internal controls in place to provide sufficient documentation to demonstrate compliance with federal and state time and effort reporting requirements in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 225 Cost Principals for State, Local, and Indian Tribal Governments. Effect: There is an increased risk that payroll expenditures charged to the grant may not be fully supported or allocable to the federal program. This noncompliance could result in the federal costs being disallowed.
Cause: Lack of procedures in place to ensure compliance with time and effort reporting requirements.
Recommendation: Management should establish procedures to ensure compliance with City guidelines and policies regarding time and effort reporting and documentation requirements that department heads must adhere with to ensure compliance with federal and state time and effort reporting requirements. Such procedures should indicate under what circumstances semi-annual certifications and personnel activity reports (PARS) or time and effort reports are required and when this information must be provided to the school business office. Management should also implement proper training to ensure that the program managers fully understand the time and effort reporting requirements.
Views of Responsible Officials: See Corrective Action Plan.