Finding Text
Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Organization claimed expenses based on specifically identified COVID related expenses and general and administrative expenses. Condition: The Organization?s internal controls over compliance related to payroll were not effective. Eight out of sixty payroll expenditures tested were not properly calculated based on the criteria the Organization set. The expenditures were incurred prior to the Organization being notified of the same finding in the 2021 audit. Although some employees were paid less than the calculated amount, in the aggregate, the payroll amount was greater than the support amount but still fully allowed under the grant. Questioned costs: None Cause: Management oversight. Effect: The auditor noted no instances of noncompliance with the provisions related to eligible expenditures; however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Recommendation: We recommend that management review all expenditures for accuracy. However, all expenses were fully allowed. Views of responsible officials and planned corrective actions: Management will review calculations and support for all payroll expenditures to ensure accuracy in future reporting.