Finding Text
Condition: Payments to subrecipients for services rendered under the grants included salaries and related benefits for the subrecipients’ employees who worked on the grants. Although the payments were adequately supported by time records reporting total hours worked and pay stubs for a pay period, the costs for time and effort allocated to a specific grant was not documented by a cost allocation method using time and effort by grant.
Criteria: 2 CFR Subpart E, Cost Principles require that expense be adequately documented.
Cause: Guidance was not provided to subrecipients explaining that such documentation should be provided.
Effect: Amounts charged for grants for salaries and benefits may not be accurate. However, the charges appeared reasonable and consistent with other services provided for the grants.
Context: Our review included four test items, totaling $164,173.51.
Recommendation: The Organization should obtain written certifications from subrecipients regarding time and effort charged to a specific grant. Written guidance should be provided to subrecipients regarding this requirement.