Barrington, New Hampshire School District

Finding #2021-001 Department of Education Special Education Cluster (IDEA) (ALN #84.027 & 84.173) Pass Through Payments from the New Hampshire Department of Education Project Number(s): 92514 and 20210860 Criteria or specific requirement: Payroll expenditures charged to federal programs should be supported by periodic certifications, employee activity reports, or equivalent documentation to support actual work performed and costs charged to the program, as required under the Federal cost principles identified in 2 CFR 200.430. Condition: During our testing of internal controls over compliance with the federal program, we noted that wage costs for salaried employees are charged to the federal program based on budgetary allocations developed at the time of the grant application or determination of the employees wage during the hiring process. Costs are based on actual payroll costs incurred, however, periodic certifications or other forms of employee activity reports are not obtained to verify that the allocation of costs reflect a reasonable representation of the employee?s activities. Questioned costs: None. Context: Of the District?s payroll charges related to the cluster during fiscal year 2021, we haphazardly selected 37 individual charges from the bi-weekly payroll periods. All employees charged to the grant were selected for testing at least once. During the examination of charges, we noted all individuals selected for testing were salaried and charged 100% to the cluster, however, it was noted that the District does not obtain periodic certifications or activity reports for salaried employees. Effect: Failure to adequately document personnel activity in accordance with the requirements of the Code of Federal Regulations increases the risk that the District will request reimbursement for expenditures which were not related to employee time spent on the federal award. Cause: Salaried employees working on the Special Education Cluster programs are hired to work solely on those programs. Additionally, they are budgeted to be funded solely from those same programs. As a result, the District has not implemented additional certifications or employee activity reporting requirements for those employees. Recommendation: We recommend the District implement a semi-annual certification process, or similar employee activity reporting system, to be completed subsequent to the program activities being performed, in order to verify the costs charged to the grants are supported by the actual work performed. Views of Responsible Officials: The District plans to implement a process to obtain semi-annual certifications from all grant funded employees that do not otherwise submit documentation of time and effort in the form of hourly time cards.