UNITED WAY FOR SOUTHEASTERN MICHIGAN

CFDA Number, Federal Agency, and Program Name CFDA #94.019 Corporation for the National Community Service Social Innovation Fund - Federal Award Identification Number and Year 16SIHM1001 2019 - Pass through Entity N/A - Finding Type Significant deficiency - Repeat Finding No - Criteria 2 CFR 200.303, internal controls, indicates a nonfederal entity must establish and maintain effective internal control over federal awards that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award - Condition The Organization submitted certain personnel costs for federal reimbursement for amounts related to an employee?s time spent on another federal award. These costs reduced the grant?s required matching activity rather than reducing the federal agency reimbursement request. - Questioned Costs None The Organization reduced a subsequent reimbursement by the amount of costs in excess of the initial reimbursement, and, thus, no questioned costs are included on the schedule of expenditures of federal awards. - Identification of How Questioned Costs Were Computed N/A - Context In conjunction with allowability testing, we noted approximately $2,600 of salary and fringe benefits costs were submitted for federal agency reimbursement despite the time and effort documentation indicating time was spent on another federal award. This overage was applied against the grant?s matching requirement, and, thus, the Organization?s total grant expenses were correct. However, the adjustment posted to allocate the employee's time and effort was posted against the matching portion of the SIF grant rather than federal funds requested for reimbursement. - Cause and Effect Controls in place did not ensure time and effort were properly allocated to the grant based on the activities performed by the employee, as supported by the supplemental time sheet. As a result, approximately $2,600 was incorrectly reimbursed by the federal agency. - Recommendation We recommend the Organization review its controls surrounding the allocation of payroll and related costs to grants to ensure the adjustment is consistent with the supporting documentation. - Views of Responsible Officials and Corrective Action Plan Management has reviewed how this occurred in August of 2018, what steps were taken to correct this one error and, most importantly, what additional steps can be put in place to minimize the potential for this to recur in the future. In reviewing how payroll is entered from the employee time sheet into an electronic payroll service (ADP) and then into the general ledger (GL), we found no errors and that the employee's time and wages were put into the proper GL account for the grant. The error that occurred was a clerical error on a spreadsheet consisting of 695 rows of GL activity for the grant. This spreadsheet was used to allocate each GL activity line item between the federal grant share and the required federal match. While the employee?s salary costs were put into the federal share column, the associated credit related to time on another program remained in the federal match column. This resulted in an overstatement on the federal share and an understatement on the federal match for that month. When this error was detected, an adjustment was made to a subsequent federal reimbursement request so that the year end amount matched. In order to minimize the potential for this to recur, the process of utilizing a spreadsheet with hundreds of rows of data and multiple columns to allocate between the federal share and matching share will be replaced with a more efficient and less error prone method. Each month, an allocation will be done on a GL summary line item basis versus the current method of each individual line of activity. The amounts for the salary and contra salary accounts will be linked so that the error that occurred in August 2018 cannot recur. In addition, an additional step of the controller reviewing the allocation between the federal and matching share will be required prior to submission of the federal reimbursement request.

GSA_MIGRATION