Finding Text
Finding 2022-001: Allocation of Payroll U.S. Department of Health and Human Services ? Opioid STR (ALN #93.788) Activities Allowed or Unallowed, Allowable Costs/Cost Principles Condition: During the audit, it was noted that employee time charged to multiple programs was based on an estimated percentage of time established at the beginning of the fiscal year. This methodology is allowable when an after- the ? fact review of the estimate is completed to ensure the federal award is charged the proper amount. The Organization reviews and adjusts allocations annually but makes changes on a prospective basis. Criteria: Per Uniform Guidance, 200.430 Compensation ? personal services (i) Standards for Documentation of Personnel Expenses, (viii) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (c)the non- Federal entity?s system of internal control includes processes to review after-the ? fact interim charges made to a Federal award based on budget estimates. Cause: The Organization?s internal control does not include a process for adjustments to estimated percentages for charging employee time. Effect: There was approximately $56,000 in payroll expense charged to the program based on estimates established at the beginning of the fiscal year but not reviewed after- the ? fact. Recommendation: We recommend the Organization develop a process for reviewing the percentages used to charge employee time during the fiscal year and update accounting records accordingly. Views of Responsible Officials: Management agrees with the finding and is implementing a daily timesheet tracking system.