Finding Text
Federal Agency: U.S. Department of Health and Human Services
Cluster Name: Child Care and Development Fund Cluster
Program Year: 2022
Assistance Listing Number: 93.575
Compliance: Activities Allowed and Unallowed and Allowable Costs/Cost Principles
Finding Type: Significant deficiency in internal controls over compliance
Criteria: Management is responsible for maintaining adequate records for salaries charged to federal
awards that accurately reflect the work performed. These records must also 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 or on a Federal award and non-Federal award.
Condition: During compliance testing, it was noted that no adequate time and effort documentation was
maintained for salaried employees being charged to the Federal awards.
Context: Of a statical sample of payroll, it was noted that salaried employees who do work within more
than one department did not have a distribution of their hours and pay allocated to the different
departments included on their timecards. For employees who work solely in one department also lacked
appropriate time and effort documentation.
Cause of condition: The Club’s current controls in place were not appropriate to address the compliance
requirement.
Effect of Condition: As a result of this condition, the Club’s expenditures charged to the federal grant for
salaries lacked adequate compliance documentation.
Recommendation: It is recommended that the Club maintain adequate records for salaries charged to federal
awards, such as signed timesheets with allocation amounts included or semi-annual certification for
employees working solely on one federal program.
View of Responsible Officials and Planned Corrective Action: The nature of this funding was general operating
support with no specified concrete deliverable per the grantor (State of New Hampshire). In accordance
with prior year guidance on grant compliance and the grantor’s guidance to the Club stating personnel
costs were an allowable use of funds, the Club received quarterly approvals from management and/or
supervisors for the allocation of expense to the grant. Employees and supervisors approve weekly
timecards and total hours paid without specification as the source of funds. The Club will provide an
employee/supervisor certification in FY2023.
Planned Implementation Date of Corrective Action: Fiscal year 2023 and ongoing
Person Responsible for Corrective Action: Kathy Woodfin, Finance Director