Finding Text
Finding No. 2024-005 – Payroll
Federal Agency: U.S. Department of Treasury
Federal Program: COVID-19 Coronavirus State and Local Fiscal Recovery Funds
Assistance Listing Number: 21.027
Federal Award Identification Number and Year: N/A
Pass-Through Agency: N/A
Pass-Through Number: N/A
Award Period: March 2021 through December 2026
Type of finding:
Significant Deficiency in Internal Control over Compliance and Other Matters
Condition:
During our testing, we noted the County improperly reported payroll expenditures incurred in previous fiscal years on the 2024 Schedule of Expenditures of Federal Awards (SEFA).
Criteria or specific requirement:
2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of grant expenditures. The County should have internal controls designed to ensure compliance with those provisions.
Questioned costs:
$181,356
Context:
During our testing, it was noted that the County claimed $181,356 of payroll expenditures that were incurred in prior years on the fiscal year 2024 SEFA. The costs were within the grant award period, however, the expenditures reported on the 2024 SEFA do not match the financial statements.
Cause:
In an effort to utilize grant funding, the County elected to claim eligible costs from previous fiscal years.
Effect:
The County’s noncompliance with federal requirements could lead to a negative impact on future funding for the County.
Repeat finding: No
Recommendation:
We recommend the County ensure expenditures are recorded on SEFA in the fiscal year they are incurred.
Views of responsible officials and planned corrective action:
The County agrees with this finding. The questioned costs are related to eligible payroll costs that were reported on the current year SEFA in error, rather than in the fiscal year in which they were incurred. The County recommends training for payroll and accounting staff related to proper recognition of expenses on the SEFA and documentation standards of the COVID-19 Coronavirus State and Local Fiscal Recovery Funds program.