Finding 586365 (2023-001)

Failure to comply with grant time-based requirements U.S. Department of Treasury - ALN: 21.019 COVID Funds Known and likely questioned costs: Known: $1,398, Likely: 18,509 Condition: During audit testing it was found in 10% of the sampled population were paid incorrectly, resulting in overpayment to employees and departure from grant compliance. Employees were given retention bonuses before the mandated 6 month mark as outlined in the compliance requirements of the ARPA grant. Criteria: ARPA grant document states "The retention bonus incentive category allows for bonus payments to DSPs who exceeded six (6) continuous months of employment with the same employer." Requirement #3: "The provider must certify the DSP completed six (6) continuous months of employment". Cause: Improper internal controls allowed the spreadsheet, created internally for tracking hire dates and their 6 month marks, was incorrectly calculating the fiscal year number of days and was not under review by a second employee. Effect: Known misuse of funding was $1,397.50, and when applied to the entire population resulted in likely early payment of $18,509. Departure from grant compliance. Recommendation: We recommend that management corrects the formulas on their tracking spreadsheet and require that a member of HR or payroll review the employees hire dates and bonus dates before the payment is approved. Management Response: All funds have been expended and spreadsheet was reviewed after it was brought to my attention during fieldwork.