Finding Text
Criteria: In accordance with regulatory agreements under the HUD Consolidated Audit Guide, only expenditures related to the Project can be allocated to the Project. Condition: The payroll charged to the Project for certain employees for the fiscal year ended June 30, 2022 was not in accordance with the Project?s allocation policy. Effect: Advanced Living Inc.?s Schwenckfeld Manor may lose its federal assistance if expenditures are made that are not related to the Project. Cause: Advanced Living Inc.?s Schwenckfeld Manor's management monitoring did not work effectively to ensure proper recordkeeping. Questioned Costs: Misallocated payroll and related taxes and benefits in the amount of $4,099 needed to be reallocated to the Project for the fiscal year ended June 30, 2022. The amounts were determined by totaling the wages and related taxes and benefits that were charged to the management company in error. Recommendation: The Project should more closely monitor its payroll allocations during the year to ensure that the Project is charged in accordance with its allocation policy. Management's Response: Management agrees with the comment and has already corrected the issue prior to the audit report date via a proposed journal entry. Management has also committed to more thorough monitoring of its payroll allocations each payroll period during the year to ensure allocations are made in accordance with the Project?s policy.