Finding Text
Finding 2023-003: Allowable Activities – Payroll Documentation and Approvals
Program Names and
Awarding Agencies: Emergency Rental Assistance Program, 21.023, passed through Michigan State Housing Development Authority, Homeless Action Network of Detroit, and City of Detroit
Weatherization Assistance for Low-Income Persons, 81.042, passed through Michigan Department of Health and Human Services
Twenty First Century Learning, 84.287, direct award from U.S. Department of Education
Finding Type: Significant Deficiency on Internal Controls over Compliance and Noncompliance
Questioned Cost Amount: Based on deviations noted in our testwork the projected likely questioned
costs resulting in noncompliance are as follows:
Emergency Rental Assistance Program, 21.023: $305,781
Weatherization Assistance for Low-Income Persons, 81.042: $88,446
Twenty First Century Learning, 84.287: $18,868
Context / Criteria: Wayne Metropolitan Community Action Agency and Affiliates supports payroll charges to federal programs with payroll distribution reports completed by employees. The payroll distribution reports should be approved and support the posting of payroll expenses to each employee’s assigned programs.
Condition: During our payroll testing we noted the following that suggest a deficiency in internal control and noncompliance:
Emergency Rental Assistance Program, 21.023: 3 out of 40 payroll distribution reports did not support the amount of expense charged to the federal award.
Weatherization Assistance for Low-Income Persons, 81.042: 2 out of 40 payroll distribution reports did not support the amount of expense charged to the federal award.
Twenty First Century Learning, 84.287: 1 out of 40 payroll distribution reports did not support the amount of expense charged to the federal award.
Cause / Effect: Wayne Metropolitan Community Action Agency and Affiliates did not maintain sufficient procedures to ensure payroll distribution reports accurately reflected time charged to the award. If changes to employee payroll distribution reports occurred the approval or evidence was not retained.
Recommendation: Uniform Guidance requires gross pay allocable to a program be reflected in a payroll distribution report or similar method. If adjustments to those payroll distribution reports are required, we recommend management document the change and the change approval so that amounts charged to federal programs are documented.
Views of Responsible
Officials and Corrective
Actions: Management agrees with the finding. See accompanying Corrective Action Plan.