Finding Text
#2021-002 – Material Weakness – Allowable Costs/Cost Principles
Opioid STR Grant ALN 93.788
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards.
CFR 200.430 states, “Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. 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
During the course of the audit, we noted that the Organization used an allocation methodology to allocate salaries to the federal award based upon time spent on the program. However, for eleven of the employees, there were no timesheets to support the amount of time allocated to the Organization’s grant programs.
Cause
The cause is a lack of proper internal controls which would require the Organization to maintain adequate support for time spent on grant programs and a formal allocation process to allocate payroll costs across the grant programs.
Effect
The potential effects of not having supporting documentation for the allocation of payroll expenses is potential overbilling of expenses to the grant program.
Questioned Costs
$33,316
Perspective Information
We reviewed a sample of monthly reports filed with the Pennsylvania Department of Military and Veterans Affairs and the Drug and Alcohol Program. We examined the payroll for each employee charged to the grant for a total of twenty-six employees. The finding is related to eleven individuals who did not complete timesheets or provide supporting documentation for the amount of time spent on the Organization’s grant programs.
Identification as a repeat finding
A similar issue was noted in prior year finding #2020-002.
Recommendation
We recommend that the Organization require timesheets for the hours allocated to the grant programs for all employees whether they are salary or hourly to ensure that the payroll charged to grants is accurate and properly supported.
View of responsible officials and planned corrective action
Starting in 2023 all employees of the Organization will complete formal time sheets. These sheets will be signed by the Administrative Coordinator and by the Fiscal Coordinator and then entered into the system each pay period to rectify this finding.