Finding 583449 (2023-001)

Finding 2023-001: Timesheets Federal Program: CFDA 15.875 Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: During our audit, we noted that timesheets did not track time charged to Federal programs and accordingly, an after the fact allocation adjustment needed to be made to appropriately reflect the level of effort on the Federal program. Cause: The Foundation did not effectively communicate the required practices on how to track time on timesheets throughout the year. Effect or Potential Effect: The Foundation could inadvertently fail to maintain records to support cost allocations. Questioned Costs: Indeterminable Context: The Foundation did not keep timesheet records to support the amounts charged to the general ledger, during the year. Our audit work in this area consisted of a random sample selection of payroll periods and employees. We consider our sample to be representative of the population, and thus, is a statistically valid sample. Identification as a Repeat Finding: Not applicable Recommendation: We recommend that management enforce its current payroll policies, ensure each employee completes a timesheet that pertains to each payroll period and of which documents the allocation of time worked on departments, projects and affiliates (per the policy). Furthermore, the finance department should prepare and maintain a reconciliation between the program allocations (as documented in the approved timesheets) and the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.