Finding Text
Criteria or specific requirement: According to ?200.303 Internal controls of 2 CFR Part 200, the nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our testing, we noted that the Loan Fund?s internal controls were not sufficient in order to prevent miscalculation of allowable payroll costs. Questioned costs: $388 Context: During our testing, 1 of the 45 tested payroll disbursements was incorrectly calculated. The total hours per the timesheet did not agree to the amount used for payment. The overall hours per timesheet were 4 hours less than the amount paid on check. Cause: Error that was not identified by established controls and procedures over allowable costs principals. Effect: Possible noncompliance with federal cost principals or grant requirements. Recommendation: We recommend that NMLF ensure that approvals of timesheets are correct in order to ensure compliance with federal allowable cost principals. Views of responsible officials: There is no disagreement with the audit finding. Management accepts this finding and has made efforts to review and update our policies and procedures to prevent future noncompliance with federal cost principals and requirements.