Finding 627421 (2022-001)

Significant Deficiency Repeat Finding
Requirement
B
Questioned Costs
-
Year
2022
Accepted
2023-03-29
Audit: 45124
Organization: The Montessori Network (IL)
Auditor: Porte Brown LLC

AI Summary

  • Core Issue: Cost allocations for salaries were incorrectly submitted for reimbursement, leading to underallocation of hours compared to approved reports.
  • Impacted Requirements: Internal controls must ensure accurate cost allocations based on employee time spent, which were not consistently followed.
  • Recommended Follow-Up: Implement consistent reconciliation procedures between personnel activity reports and actual costs to prevent future discrepancies.

Finding Text

Condition : Cost allocations for salaries and related expenses allocated across program activities, including federal award programs were improperly submitted for reimbursement under the Head Start and Education Stabilization Fund programs. The identified errors represented underallocation of hours compared to the approved personnel activity reports and timecards. Criteria : Internal controls should be in place and consistently applied that provide reasonable assurance that cost allocations accurately represent the correct allocation of employee-related costs based on the time spent by the applicable employees. Cause : Personnel activity reports submitted by employees are not consisently reconciled to the vouchers submitted for federal and other programs. Effect : Because the reconciliation process in place was not consistently followed to agree to personnel activity reports to costs allocations, it is possible that an employee's time may be inappropriately allocated amongst functional activities, including federal award programs. Recomendation : Procedures should be consistently applied requiring the reconciliation of submitted personnel activity reports to the employees' actual costs allocated and charged to federal and other programs.Views of Responsible Officials and Planned Corrective Actions : This finding was initially identified during fiscal year 2020, and corrective actions were taken by the School in 2021. To address the issue, the School implemented new procedures that require a monthly review by management, which includes a detailed reconciliation of submitted personnel activity reports to vouchers prepared for federal and other programs. This reconciliation process helps to ensure that payroll cost allocation accurately reflects the submitted personnel activity reports. In addition, the School has made changes to its payroll system to ensure accurate time tracking for its various programs. This includes changing the service provider responsible for voucher submissions. These changes will help to prevent similar issues from occurring in the future and ensure that employee-related costs are accurately allocated to the appropriate programs. As of 2022, the School has successfully implemented these changes and continues to review and monitor its procedures to maintain compliance with federal and other program regulations.

Categories

Allowable Costs / Cost Principles Cash Management Internal Control / Segregation of Duties

Other Findings in this Audit

  • 50977 2022-002
    Significant Deficiency
  • 50978 2022-002
    Significant Deficiency
  • 50979 2022-001
    Significant Deficiency Repeat
  • 50980 2022-001
    Significant Deficiency Repeat
  • 627419 2022-002
    Significant Deficiency
  • 627420 2022-002
    Significant Deficiency
  • 627422 2022-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
93.600 Head Start $779,788
84.425 Education Stabilization Fund $320,197
84.010 Title I Grants to Local Educational Agencies $207,546
84.367 Improving Teacher Quality State Grants $7,500
84.424 Student Support and Academic Enrichment Program $3,214