Finding Text
2023-002 Compliance and Internal Controls over Allowable Costs (Significant Deficiency)
Assistance Listing Number 21.027 COVID - 19 Coronavirus State and Local Fiscal Recovery Funds
2022-2023 Funding
U.S. Department of Treasury
Criteria: Under 2 CFR Section 200.303(a), non‐federal entities must establish and maintain effective internal controls to provide reasonable assurance that the entity is managing the federal awards in compliance with statues, regulations, and the terms and conditions of the award. Additionally, grantees are required to have a detailed breakout of these costs along with any supporting documents for those expenses for auditing and oversight. Title 2 CFR 200.302 requires the financial management system of each non-Federal entity provide records that identify adequately the source and application of funds for federally-funded activities.
Condition: We noted instances of the allocation rates being used to calculate amount of payroll costs to charge to grants did not agree to the hours incurred per approved timesheets.
Cause: Certain payroll allocation spreadsheets used to calculate amounts to charge grants for payroll costs were not updated to agree with the approved timesheets.
Effect: The Agency requested in error reimbursement for unallowable payroll costs.
Questioned Costs: $2,668
Perspective: Errors were noted during periods when the prior accounting team was in place or during transition period as the new accounting staff were being hired. Such errors resulted in certain employees’ times under / over allocated, thus reducing overall financial impact.
Recommendation: The Agency should update its payroll allocation spreadsheets to agree with the approved timesheets per payroll period to ensure only allowable payroll costs are charged to grants.
Views of Responsible Officials: We concur with the recommendation, please see Corrective Action Plan.