Finding Text
Type of Finding: Significant Deficiency in Internal Control over Compliance
Federal Agency: Department of Veterans Affairs, Department of Health and Human Services
Federal Program Name: VA Supportive Services for Veteran Families Program, Unaccompanied Alien Children Program
Assistance Listing Number: 64.033, 93.676
Federal Award Identification Number and Year: 20-WA-146-2023, 90ZU0386-3-0-2022, 90ZU0386-3-0-2023
Pass-Through Agency: United States Conference of Catholic Bishops
Award Period: October 1, 2020, to September 30, 2023, January 1, 2022, to December 31, 2022, January 1, 2023, to December 31, 2023
Criteria or specific requirement: Under the standards for documentation of personnel expenses, 2 CFR 200.430(i)(1) states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Furthermore, 2 CFR 200.430(i)(1)(vii) indicates that these records must: "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 a 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".
Condition: During testing it was discovered that employees in CCS’s payroll software (ADP) were not being consistently set up to accurately track hours worked per the timesheets to their associated job cost centers. Hours tracked to the major program are sometimes erroneously split-up between the "home department" and the major program cost center. The opposite is also sometimes true in that hours worked under the "home department" are erroneously split between the home department and the major program cost centers, even though those hours were not worked on the major program. This error appears to occur on an employee-by-employee basis, based on the setup of the individual employee. Discussion with management indicates that this error is limited to the SW division and only occurs if an employee has a home department that is a non-holding account.
Questioned costs: None
Context: (64.033) A sample of 40 was made from a population of 1,044 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 1 was found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance. (93.676) A sample of 40 was made from a population of 926 transactions charged to the major program for salaries and benefit expenses. Of the 40 sampled costs, 7 were found to be out of compliance with the provisions for 2 CFR 200.430 Compensation – personal services of the Uniform Guidance.
Cause: There is a misunderstanding on how employees and cost centers must be set up in ADP in order to achieve the desired allocation splits.
Effect: Inadequate allocation of wages to federal programs may result in noncompliance with grant regulations. This can also lead to overcharging or undercharging the federal grant, which may result in penalties or repayment obligations.
Repeat Finding: No.
Recommendation: CLA recommends that those charged with establishing new employees in ADP receive an updated training on the correct setup steps to ensure that employees who work across various programs have their wages allocated accurately based on the documented time and effort spent on each program. CCS has already implemented a fix going forward and is currently assessing the cumulative error for the year under audit.
Views of responsible officials: There is no disagreement with the audit finding.