Finding Text
2022-003 Significant Deficiency in Compliance and Internal Control over Compliance ? Allowable Costs/Cost Principles Identification of federal programs: 21.027 Coronavirus State and Local Fiscal Recover Funds Criteria: Title 2 U.S. Code Part 200.403(g) requires that for costs charged to a federal program to be allowable, they must be adequately documented. Condition: Major federal programs 21.027 Coronavirus State and Local Fiscal Recovery Funds had payroll related costs charged to the program that potentially would be overpayment. One employee had two timesheets that represented two differing federal programs. Both timesheets resulted in a paycheck. Taken together these paychecks resulted in an overpayment of wages. Of the 72 paychecks sampled, 6 related to the one individual and duplicates were noted in each of the 6. The other employee paychecks did not have exceptions. Cause: Due to staffing shortages, the accounting staff was undertrained. Management oversight did not have adequate financial training. Effect or potential effect: Costs were charged to these programs that were unsupported in accordance with allowable cost principles. Questioned Costs: None ? The known and likely questioned costs were below the $25,000 reporting threshold and program materiality for both major federal programs. Context: 21.027 Coronavirus State and Local Fiscal Recovery Funds ? During my sample testing for allowable costs, I identified 6 out of 72 transactions (error rate of 8%) that had conflicting documentation to support the program cost. They were all isolated from payroll charges and specifically to one employee. Total payroll expenditures charged to the program was $295,466 out of $1,557,537 total expenditures. Program materiality was $77,877 (5% of total expenditures). The likely error was not material to the program, the internal controls which allowed the errors to occur should be corrected. Identification of Repeat Finding: 2021-002 Recommendations: I recommend the Association use one timesheet that allows time to be allocated between all programs which would eliminate the possibility of double time records and consequently the potential of duplicate payments. Views of Responsible Officials: Management agrees. Also see Corrective Action Plan.