Finding Text
2022-004
Federal Agency: U.S. Department of Education
Federal Programs: Education Stabilization Fund
Assistance Listing Number: 84.425U
Pass-Through Agency: Rhode Island Department of Elementary and Secondary Education
Pass-Through Number: 4872-505020-201
Award Period: July 1, 2021 – June 30, 2022
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Significant Deficiency in Internal Control Over Compliance, Other Matters
Criteria or specific requirement: Compliance: Per 2 CFR § 200.430 (a), costs of compensation are
allowable to the extent that they satisfy the specific requirements of this part, and that the total
compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the
established written policy of the non-Federal entity consistently applied to both Federal and non-
Federal activities; (2) Follows an appointment made in accordance with a non-Federal entity's laws or
rules or written policies and meets the requirements of Federal statute, where applicable; and (3) Is
determined and supported as provided in paragraph (i) of this section, Standards for Documentation of
Personnel Expenses, when applicable.
Per 2 CFR § 200.430 (i), 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,
Be incorporated into the official records of the non-Federal entity,
Reasonably reflect the total activity for which the employee is compensated by the non-Federal
entity, not exceeding 100% of compensated activities,
Encompass both federally assisted, and all other activities compensated by the non-Federal
entity on an integrated basis, but may include the use of subsidiary records as defined in the
non-Federal entity's written policy,
Comply with the established accounting policies and practices of the non-Federal entity,
Support the distribution of the employee's salary or wages among specific activities or cost
objectives if the employee works on more than one Federal award; a Federal award and non-
Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities
which are allocated using different allocation bases; or an unallowable activity and a direct or
indirect cost activity.
Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective
internal control over the Federal award that provides reasonable assurance that the non-Federal entity
is managing the Federal award in compliance with Federal statutes, regulations, and the terms and
conditions of the Federal award. These internal controls should comply with guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the United States or
the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO)."
Condition: Payroll costs charged to the grant showed no evidence of approval.
Questioned Costs: Below the reportable limit.
Context: For 16 out of 60 payroll costs charged to the grant, time sheets or other documentation was
not available to support evidence of approval for time worked.
Cause: The City's procedures were not sufficient to ensure that payroll charges were appropriately
approved and documented.
Effect: Payroll costs charged to the grant may not be allowable.
Recommendation: We recommend the City review and enhance internal controls and procedures to
ensure that approval for payroll charges is documented and maintained.
Views of Responsible Officials: There is no disagreement with the audit finding.