Finding Text
2023-004 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on the Federal Program: United States Department of Health and Human Services Assistance Listing Number: 93.667 Assistance Listing Name: Social Services Block Grant Pass-through Awards under the Uniform Guidance Requirements: Criteria – CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Condition – During our testing of allowable costs, we noted exceptions in the ability of management to support payroll incurred for the United Way of Greater Cleveland’s Title XX federal program. The Organization billed for personnel time on a monthly basis (1/12 of the total award) up to the maximum available for personnel costs, versus billing for the actual costs incurred under the award. The United Way of Greater Cleveland did not adequately document hours worked per employee per submission, and accordingly, time and effort were not properly supported on a monthly basis. Rather, United Way of Greater Cleveland allocated the time and effort of employees at the end of the fiscal year to ensure that costs incurred were not less than total reimbursements, and no programs were overbilled for the annual costs under the program. In performing the allocation in this manner, United Way inadvertently overallocated time charges to the Title XX program, however, total costs incurred by United Way after exclusion of the overallocation were not in excess of the amounts funded by the program. Cause – United Way does not have specific policies and procedures in place as to how monthly personnel costs across federal programs will be aggregated and charged to federal programs. Effect – An ineffective control system related to the charging of cost to federal programs in order to ensure that only hours worked relating to the programs is charged and requested for reimbursement and can be supported with timecards can lead to noncompliance with law and regulations and possible loss of funding for the related program. Questioned Costs – None. Context – United Way of Greater Cleveland collects timecards for all employees for submission and approval prior to biweekly payroll. However, a policy or procedure does not exist to ensure that the actual hours incurred (time and effort) billed to the federal agencies on a monthly basis is fully supported at the time of invoicing. Rather, invoicing is done on a pro-rata basis for the entire amount of the personnel cost under the contract, and then an annual comparison to contract was done across programs to provide greater assurance that no costs had been billed and reported in excess of the amounts incurred. Repeat Finding – This is a repeat finding.Recommendation - We recommend that United Way of Greater Cleveland develop a policy and procedure to ensure that prior to submission of invoices to federal awarding agencies, management prepare a monthly analysis to support the actual amounts allocated across all programs and invoiced to the awarding agencies, reconciled to payroll reports, which then will allow to evidence that all hours submitted for reimbursement are supported with timecards or appropriate allocation, thus demonstrating the level of effort under the uniform guidance. We further recommend that management review its policies and procedures on a regular and ongoing basis related to the allocation methodology to ensure that its appropriate given changes in the program and workforce. Views of Responsible Officials and Planned Corrective Actions – Management concurs with the finding and the recommendation.