Accounting Aid Society

CriteriaCriteria The Organization should have documentation to support reimbursement requests for grant activity. Condition Controls were inadequate to ensure the retention of supporting documentation. Context During the review of the grant reimbursement requests, we noted that the Organization didn’t maintain ledger detail which supports the amount of the grant reimbursement amount. Cause and Effect Management did not retain supporting information and keeps the ledger open until year end.

Upon review of the findings and associated context, we acknowledge that our controls were inadequate to ensure the retention of supporting documentation for grant reimbursement requests. Specifically, the absence of ledger detail supporting the amount of the grant reimbursement is a concern. In response to this finding, we will take immediate corrective actions: 1. Develop and implement comprehensive procedures for the retention of supporting documentation for grant reimbursement requests. These procedures will include clear guidelines on the types of documentation required and the timeframe for retention. 2. Enhance internal controls to ensure that ledger detail supporting grant reimbursement amounts is consistently maintained and readily accessible for review.1. Provide training to relevant staff members involved in grant management and financial reporting to ensure understanding and compliance with the new procedures. 2. Conduct regular internal audits to monitor adherence to the established procedures and identify any areas for improvement. We are committed to addressing this finding promptly and effectively to ensure compliance with grant requirements and best practices in financial management. We value your insights and feedback and welcome any further guidance or assistance from your team to facilitate this process.

Criteria According to Section 2 CFR Part 200.430 (i) Standard for Documentation of Personnel Expenses, Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. The records must 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, a federal award, and a non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. Condition Controls were inadequate to ensure the Organization maintains timekeeping documentation by grant. Context During the testing of the allowability of expenses, we discovered personnel expenses were charged to the incorrect grant cost center. Management allocates actual personnel expenses based on the grant budgeted amount instead of actual hours worked by the grant area. Management does not require personnel to track actual time spent by the grant. Cause and Effect The Organization did not fully follow the guidance detailed in Section 2 CFR Part 200.430 to ensure that payroll expense allocations are based on actual time spent instead of grant budgeted amounts.

Upon review of the finding, we acknowledge the importance of accurately documenting personnel expenses by the requirements outlined in the cited regulation. We recognize that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed and that these records must support the distribution of an employee's salary or wages among specific activities or cost objectives when applicable. In response to this finding, we will take the following actions: 1. Review and strengthen our current procedures for documenting personnel expenses to ensure compliance with Section 2 CFR Part 200.430 (i). 2. Provide additional training and guidance to relevant personnel responsible for documenting time and effort across different activities or cost objectives. 3. Implement enhanced monitoring mechanisms to regularly assess and validate the completeness of personnel expense documentation. 4. Designate a responsible individual or team to oversee and coordinate the implementation of these corrective actions. We are fully committed to addressing this finding promptly and effectively to ensure ongoing compliance with federal regulations. We welcome any further guidance or assistance from your team to facilitate this process.