Finding Text
Federal Agency: United States Department of Commerce
Federal Program Name: Hollings Manufacturing Extension Partnership
Assistance Listing Number: 11.611
Pass-Through Numbers: 70NANB20H153, 70NANB23H043, and 70NANB20H059
Award Period: Various
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Other Matter
Criteria or specific requirement: Per OMB Cost Standards, an Organization is required to ensure that
if employees are being allocated to various grant programs that there is underlying support for that
allocation. This can be accomplished through utilization of time sheets or personal activity reports
(PAR), but must be completed at least monthly and must be signed by both the employee and the
supervisor.
Condition: During our testing, it was noted that the organization does not have a standard policy
requiring the preparation of time sheets or PAR’s for all employees on a monthly basis that are signed
off on by the employee and the supervisor.
Questioned costs: None noted
Context: Of total salaries incurred by the Organization in the current year, approximately 94% are
charged to this grant while 6% is allocated to other departments.
Cause: Historically, the Organizations’ grant activity was such that PAR’s were not needed. As new
funding is received, salaries for certain employees are now being allocated among different grants, but
policies have not changed to align with cost standards. Due to the client only have two grants in the
past that were extensions of each other and all employee time was able to be charged to either grant
allocation support was not needed.
Effect: The effect is that salary could potentially be incorrectly stated and / or misallocated to grants as
of year-end.
Repeat finding: This is not a repeat finding.
Recommendation: We recommend that if employees are being allocated to multiple programs
throughout the year, personnel activity reports must be prepared at minimum, on a monthly basis and
be reviewed and signed off on by both the employee and their immediate supervisor.
Views of responsible officials: There is no disagreement with the audit finding.