Finding Text
Finding No. 2023-001 – Activities Allowed or Unallowed; Allowable Costs/Costs Principles
Agency and Award: U.S. Department of Health and Human Services
ALN Numbers:
93.659, Adoption Assistance Program
93.667, Social Services Block Grant Program
Agency and Award: Florida Department of Juvenile Justice
CSFA Number:
80.005, Children and Families in Need of Services Program
Significant Deficiency/Other Matter Compliance
Criteria: The Code of Federal Regulations (CFR) Section 200.403(g) states that for costs to be allowable under federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, CFR Section 200.430 states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and are supported by a system of internal control which provides reasonable assurance that the charges are accurate and allowable.
The Florida’s Division of Accounting and Auditing Reference Guide for State Expenditures states that supporting documentation shall be maintained in support of expenditure payment requests for cost reimbursement contracts including that approved timesheets support the hours worked on the project or activity must be kept.
Condition: During our testing of payroll disbursements, we noted that seven of the 120 payroll expenditures selected for testing did not have a properly approved timecard for the pay period selected.
Cause: The Organization’s policies and procedures were not appropriately adhered to in these instances to obtain approval of timecards prior to payroll being processed to evidence these costs was allowable and that an appropriate level of review and approval was completed prior to charging these costs to a federal program or state financial assistance project.
Effect or Potential Effect: We were unable to confirm the accuracy or completeness of the expense claim as a federal or state financial assistance expenditure.
Questioned Costs: There are no questioned costs as the Organization performed a thorough review and approval of the timecards after they were identified by the auditor.
Context: We tested a sample of 120 payroll expense items and found seven exceptions.
Recommendation: We recommend that the Organization review its controls over payroll disbursements to ensure that all employees timecards are approved prior to payroll being processed.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding. See Corrective Action Plan.