Finding Text
2023 – 001 Allowable Costs
Federal Agency: U.S. Department Education
Federal Program Name: Charter School Program
Assistance Listing Number: 84.282
Pass-Through Agency: Indiana Department of Education
Pass-Through Number(s): 72229, S282D190002
Award Period: July 1, 2022 – June 30, 2023
Type of Finding:
Material Weakness in Internal Control over Compliance
Material Noncompliance
Criteria or specific requirement: The Compliance Supplement requires that compensation for
personal services be charged to the federal grant based upon approved actual time worked on the
program and not based on an allocation or budget (2 CFR 200.430(i)).
Condition: While performing audit procedures, it was noted that payroll expenses were charged to the
grant program based upon an allocation from the budget and not on approved and/or certified time
worked in the program.
Questioned costs: $356,845
Context: During the process of obtaining an understanding of internal controls and processing of
payroll expenditures, we noted payroll was not reviewed to ensure the expense charged to the grants
was accurate based upon approved actual time spent in the program and accurate pay rates.
Cause: Salary figures for salaried employees were charged to the federal grant based on unapproved
work actually performed for the program and inaccurate pay rates were utilized for overtime and an
employee transition to full time.
Effect: The organization has not fully followed compliance attributes with the allowable costs principles
set forth by the Compliance Supplement related to allocation of salaries being charged based on
approved time worked for a program. Personnel need to reinforce policies to ensure control procedures
are in place to ensure salaries charged to a grant are appropriately based on actual approved time
worked in a program. Repeat Finding: No.
Recommendation: We recommend the School ensure policies and procedures for payroll
expenditures for grant programs be charged to the federal grant based on approved hours worked in
the program.
Views of responsible officials: There is no disagreement with the audit finding.