2023-003 Allowable Costs: Payroll Costs
Federal Agency: U.S. Department of Education
Federal Program Name: Coronavirus State and Local Fiscal Relief Fund (CSLFRF), Education Stabilization Fund (ESF) and Student Support and Academic Enrichment Program (Title IV)
Assistance Listing Number: 21.027, 84.425 C, D, U,W and 84.424
Federal Award Identification Number and Year (s): CSLFRF: none and 3/2021-12/31/2024, ESF: S425D20005, S425C200002, S425U200002, S425W200002 and 3/13/2020-9/30/2023, Title IV: S424A200021 and Fiscal years 2021-2025
Pass-Through Agency: Maryland State Department of Education
Pass-Through Number(s): CSLFRF: 211770, 211821, 211903, 211889, 211904, 21188 ESF: 201766, 201878, 202134, 202126, 211958, 221569, 221864, 222038, 221360, Title IV: 211382, 221548, 23253
Award Period (s): CSLFRF: 3/2021-12/31/2024, ESF: 3/13/2020-9/30/2023, Title IV: Fiscal years 2021-2025
Type of Finding: Material Non-Compliance, Material Weakness in Internal Control
Criteria or specific requirement:
Compliance: For an employee who works in part on the consolidated administrative cost objective and in part on a Federal program whose administrative funds have not been consolidated or on activities funded from other revenue sources, an SEA or LEA must maintain time and effort distribution records in accordance with 2 CFR section 200.430(i)(1)(vii) that support the portion of time and effort dedicated to:
• The consolidated cost objective, and
• Each program or other cost objective supported by non-consolidated Federal funds or other revenue sources.
Control: Per 2 CFR section 200.303(a), a non-Federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should comply with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: Time and effort documentation did not support the employee’s payroll costs charged to the grant. In addition, payroll testing for the Education Stabilization Funds grant, we identified the following:
1. Employee’s time and effort documentation was not provided.
2. Documentation to support the employees’ gross pay or hourly rate was not provided. As a result, the auditor was unable to support the accuracy of the employee's pay charged to the grant.
3. Employees were included in the grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant. Replacement samples were not selected and deemed ineffective as the population did not clearly identify which employee’s payroll costs were removed from the grant.
Questioned costs:
Time and effort documentation did not support the employee’s payroll costs charged to the grant.
CSLFRF: $6,087.16, ESF: $3,807.00, Title IV: $6,097.07
ESF:
a. $18,256.60- employees time and effort and/or support for salary or hourly rate was not provided
b. $ 6,150.10 - employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant
Context:
Time and effort did not support payroll costs charged to the grant:
c. CSLFRF 8 out of 60 transactions tested
d. ESF: 3 out of 60 transactions tested
e. Title IV: 12 out of 40 transactions tested
ESF:
f. 6 out of 60 employees time and effort and/or support for salary or hourly rate was not provided.
g. 4 out of 60 employees were included in grant expenditure population, after inquiry from the auditor, City Schools stated that the employee’s salary was no longer charged to the grant.
Cause: City Schools did not have documentation to support payroll costs charged to the grant readily available for the audit.
Effect: City Schools is unable to support payroll costs charged to the grant.
Repeat Finding: No
Recommendation: We recommend that the schools develop internal controls and procedures to ensure the documentation is consistently maintained and readily available to support compliance with grantor’s requirements.
Views of responsible officials: There is no disagreement with the audit finding.