Finding 610937 (2022-003)

Material Weakness
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-06-28

AI Summary

  • Core Issue: The Organization failed to provide documentation showing that employee compensation rates were approved by management or the Board for all tested employees.
  • Impacted Requirements: This lack of documentation violates federal compliance requirements for allowable costs, risking disallowed costs and potential repayment to the federal agency.
  • Recommended Follow-Up: Ensure all wage changes are documented and approved in writing, with supporting records retained in personnel files and policies updated accordingly.

Finding Text

Federal Agency: U.S. Department of Health and Human Services Program: Family Violence Prevention and Services/Discretionary Assistance Listing Number: 93.592 Major Program Compliance Requirement: Allowable Costs/Activities Allowed Criteria: In accordance with 200.430(i) in Subpart E of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), changes to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Accurate and reliable records are necessary to meet ongoing financial reporting and operations needs and requirements. During our testing of the Organization?s compliance with Assistance Listing 93.592 Family Violence Prevention and Services/Discretionary, the Organization was unable to provide documentation that compensation rates were approved by management or the Board of Directors for all employees (5) selected for testing. Cause: The Organization did not consistently document in personnel records or elsewhere employee compensation or changes to employee compensation rates that were approved by management or the Board of Directors. Effect: The absence of approved employee compensation inhibits the Organization from complying with federal program requirements and the potential of disallowed costs and/or repayment to the federal agency. Recommendation: The Organization should retain all supporting documentation for reported expenditures. View of Responsible Officials: As part of the ongoing review of procedures, all wage changes must now be approved in writing by the CEO or her designee for all subordinate staff, and by the Board of Directors for the CEO. All wage changes will be submitted to the payroll processor before any adjustments can be made in the system. Additionally, each payroll is reviewed by a second person to ensure compliance. All supporting documentation of compensation changes will also be placed in the employee's personnel file. Policies and procedures and/or the Financial Procedures Handbook will also be updated to reflect the changes.

Categories

Allowable Costs / Cost Principles Reporting

Other Findings in this Audit

  • 34494 2022-002
    Material Weakness Repeat
  • 34495 2022-003
    Material Weakness
  • 34496 2022-002
    Material Weakness Repeat
  • 34497 2022-003
    Material Weakness
  • 610936 2022-002
    Material Weakness Repeat
  • 610938 2022-002
    Material Weakness Repeat
  • 610939 2022-003
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.592 Family Violence Prevention and Services/discretionary $2.45M
93.592 Family Violence Prevention and Services/discretionary (covid-19) $665,823