Finding Text
2022-004: Lack of Controls Surrounding Allocation of Payroll Costs to Programs Federal Departments: Department of Health and Human Services Assistance Listing #: 93.612 Internal Controls Significant Deficiency Category of Finding ? Allowable Costs/ Cost Principles Criteria ? Federal awards must be expended for activities allowed under the grant and costs charged to the federal grants must be allowable and in accordance with applicable cost principles. Condition ? IPTF staff use timecards to track which programs they work on to ensure that costs are properly allocated to each grant. The timecards are provided to the Finance Director/contract accountant for input into the accounting software, which is used to prepare grant reimbursement requests. During testing, after the transition to a contract accountant, we noticed multiple payroll transactions where the amounts noted as worked on this grant during the period tested did not match the payroll that was allocated to the grant in the accounting software. Cause ? The contract accountant did not record payroll costs in the accounting software consistent with the timecards provided by staff. Effect ? Grants have been overcharged for payroll allocated to the wrong grant or over-recorded payroll costs. Recommendation ? We recommend that management design and implement a review process to ensure payroll allocated to grants is calculated and recorded properly. Auditee?s comments and response ? IPTF has hired a new contract accountant, who will be responsible for ensuring proper payroll allocation calculation and recording. Responsible party for corrective action: Sharon Day, Executive Director