Finding Text
Section III - Federal Awards Findings Finding 2022-001 Federal Agency: U.S. Small Business Administration Federal Program Title: Microloan Technical Assistance Program Federal Assistance Listing Number: 59.046 Compliance Requirements: Allowable costs/Cost Principles Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria: According to 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed which must, among other things be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition The Organization was reporting budgeted hours in the quarterly reimbursement requests rather than actual hours worked for the Technical Assistance Microloan Program. Context: A sample of 3 employees were selected from a population of 22 employees. We identified exceptions in 1 out of the 3 employees' timecards we tested. One employee charged budgeted hours to their timecard as opposed to actual hours. This caused CDC to overcharge the program by $5,879. Cause: Insufficient supervisor review led to supervisors approving budgeted time as opposed to actual time. Effect or Potential Effect: CDC Small Business Finance Corp. was not in compliance with the terms and conditions of the award, nor with the allowable costs/cost principle requirement of the Uniform Guidance. Questioned Costs: N/A Identification as a Repeat Finding This finding is not a repeat finding. Auditor's Recommendation: CDC should ensure that supervisors have adequate training to properly review employee timecards to ensure that actual hours worked are appropriately charged to the Technical Assistance Program. Views of Responsible Officials CDC's management performed a review of all payroll charges submitted to the U.S. Small Business Administration ("SBA") in relation to the Microloan Technical Assistance Program and noted that CDC had been overcharging the SBA for multiple years. CDC's management notified the SBA of the discrepancy and worked with the SBA to determine the amount to reimburse the SBA. The SBA accepted the reimbursement as well as management's proposed resolution.