Finding Text
Section III - Federal Award Findings and Questioned Costs (2 CFR 200.516(a)) Finding 2022-001: Payroll Allocations Information on the Federal Programs: 98.001 and 19.519 Criteria or specific requirement (including statutory, regulatory, or other citation): Under 2 CFR 200.430 all charges to federal awards for salaries and wages must be based on records that accurately reflect work performed, and these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable and properly allocated. Condition: MdMUSA keeps a payroll allocation spreadsheet for each federal grant on a monthly basis to allocate time. MdMUSA determines percentage of time worked on each grant on the basis of hours worked during the month divided by total hours in the month. Instances were noted in which the total number of hours in a month was different for various grants in the same month. Additionally, there were instances in which employee timesheets were changed after the fact, and the finance department had to re-allocate significant values of time to reflect the modified timesheet. Cause: Total hours in the month is a manual input on each grant's allocation sheet and is calculated by multiplying 8 hours times the total number of working days in the month. Instances in which total number of hours in the month varied across different grants were the result of management oversight. There is no documented review and approval of employee timesheets. Effect or Potential Effect: When using the incorrect basis for the number of hours during a month, MdMUSA could inadvertently charge more or less time to certain awards than was actually spent. This could result in the Federal Government over-paying for salaries associated with the award. Additionally, lack of documented supervisory review of timesheets could result in timesheets being incorrect and time not being appropriately allocated to federal awards. Questioned Costs: Not determined. Context: Our audit procedures consisted of testwork performed over various payroll transactions during the year. We consisted our testwork to be representative of the population. The condition appears to be systematic in nature. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend that MdMUSA implement a review process over each grant's monthly payroll allocation sheet. This will ensure that the total hours for the month will be accurate and consistent across all awards. Additionally, we recommend that management implement a monthly review process over employee timesheets. Employee timesheets should be reviewed by an appropriate supervisor, or by the executive director, whichever is appropriate.