Finding Text
Item:
2022-002
Assistance Listing Number:
21.027
Programs:
COVID-19 - Coronavirus State and Local Fiscal Recovery Funds
Federal Agency:
U.S. Department of the Treasury
Pass-Through Agencies:
Arizona State Office of the Governor; Maricopa County
Pass-Through Grantor Identifying Number:
Unknown
Award Year:
January 1, 2022 to December 31, 2024; January 28, 2022 to June 30, 2023
Compliance Requirement:
Allowable Activities and Costs
Criteria:
In accordance with 2 CFR § 200.430 – Compensation – the entity’s system of internal controls should include a process to review after-the-fact interim charges made to federal awards based upon budget or allocation estimates.
Condition:
The entity’s system of internal controls did not include a process to review after-the-fact interim payroll charges made to federal awards based upon budget or allocation estimates.
Questioned Costs:
n/a
Context:
In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted that all selections were charged to the program based on budget estimates. Payroll records and the nature of the Organization's programs evidenced that allowable cost and activities occurred. Recordkeeping regarding the measurement of actual effort compared to budgeted or allocated effort was inadequate. As such, this is deemed to be a material weakness in internal control over compliance.
Effect:
The system of internal controls is not properly designed to detect potential adjustments needed to the amounts that were billed based upon budget or allocation estimates.
Cause:
Special Olympics Arizona, Inc. did not design processes and controls to perform the after-the-fact review.
Identification as a Repeat Finding:
Not a repeat finding
Recommendation:
The entity should design processes and controls to perform the after-the-fact review or implement a process that will allow for billing of actual expenses rather than budgeted expenses.
Views of Responsible Officials:
Management of the Organization concurs with the finding. See Corrective Action Plan.