Finding Text
Criteria: A complete system of internal controls requires all expenditures to be properly approved in a timely manner. In addition, all expenditures charged to federal programs are required to be allowable costs under the program and allocated in accordance with Valle del Sol, Inc. and Subsidiary?s cost allocation plan. Condition: The following conditions were identified: ? 36 out of 60 expenditures tested lacked timely approval of employees? actual time spent on the program. ? 5 out of 60 expenditures tested lacked employee signatures for certification of actual time spent on the program. ? 6 out of 60 expenditures tested were based on estimated fringe benefits. When compared to actual fringe benefits incurred, the amounts allocated to the program exceeded actual costs incurred. Cause: Due to the implementation of policy change occurring during the fiscal year, the new policy was implemented retrospectively. This resulted in an untimely approval process compared to when the expenditures were incurred. Additionally, due to an oversight by management, fringe benefits allocated to the program were based on predetermined budgets rather than actual fringe benefits incurred. Effect: Improper expenses may be paid and allocated to the federal programs or allocated at the wrong amount. Questioned Costs: Projected at approximately $34,000 Context/Sampling: A nonstatistical sample of 60 transactions out of 3,362 total transactions were selected for testing which accounted for $132,188 of $2,417,262 total federal program expenditures. Repeat Finding from Prior Year: No. Recommendation: We recommend Valle del Sol, Inc. and Subsidiary?s management implement a process that ensure review of actual hours for time spent to be billed to the program is completed timely and all time and effort certifications are signed by the respective employees and management implement a process that allows for actual fringe benefits to be billed to the program. Views of Responsible Officials: Management agrees with the finding.