Pennsylvania Child Care AssociationNon-Profit

During the course of the audit, it was determined that Management did not consistently perform a review of timesheets completed by their employees.

During the course of the audit, it was determined that Management backdated checks cut in July 2023 to June 2023 to record the related expense in FY 2023 instead of FY 2024, rather than recording the expense as payable at year-end.

During the course of the audit, it was determined that Management submitted monthly reports to the Berks County Intermediate Unit (BCIU) that did not have support from the point-in-time when the reports were submitted for amounts allocated to the grant found in the Organization’s accounting records. Supporting reports from the accounting records generated at a later date are affected by any adjustments made after the monthly submission, and therefore did not match the monthly BCIU submission.

#2022-001 ? Significant Deficiency ? Allowable Costs T.E.A.C.H. Child Care and Development Block Grant, CFDA #93.575 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined that Management used an allocation methodology to allocate salaries to the federal award based on a historical analysis. Although Management performed a reconciliation of allocation to actual cost, no adjusting entry was performed prior to year-end to adjust the financial records. Cause The cause is human error. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of salary expenses allocated to the federal grant. Questioned Costs Approximately $3,337 was overcharged on the $4,645,750 grant award. Perspective Information The finding noted related to three (3) individuals who were overcharged to the grant based on testwork performed for four (4) pay periods. Identification as a repeat finding There was a similar finding in the prior year. Recommendation We recommend a periodic reconciliation and recorded entry to the accounting records relating to payroll allocation to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. View of Responsible Official The Association will conduct reconciliation of payroll allocation twice each year at the end of the second quarter and at the end of the third quarter to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. A budget revision based on actuals will be implemented effective the fourth quarter.

#2021-001 ? Significant Deficiency ? Allowable Costs Child Care and Development Block Grant, CFDA #93.575 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states, ?Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined that Management used an allocation methodology to allocate salaries to the federal award based on a historical analysis. However, no reconciliation was performed prior to year-end to determine the reasonableness of the allocation methodology. Cause The cause is human error. Due to the COVID-19 pandemic and remote working arrangements, job responsibilities were redistributed resulting in one person having a reduced actual time allocated to the federal award. However, her historical salary allocation was not adjusted to reflect this change in actual time allocation. Effect The potential effects of not reconciling contemporaneous time and effort reporting to allocated payroll expenses could include an over or understatement of salary expenses allocated to the federal grant. Questioned Costs Approximately $3,828 was overcharged on the $4,143,750 grant award. Perspective Information The finding noted related to one (1) individual who was overcharged to the grant. Two (2) additional employees presented an under-allocation to the grant based on testwork performed for four (4) pay periods. Identification as a repeat finding There was no similar finding in the prior year. Recommendation We recommend a periodic reconciliation of payroll allocation to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked. View of responsible officials and planned corrective action Due to COVID-19 most Association staff were deployed remotely from home. Some activities still required in-office attendance; those tasks were reassigned to other staff members, who because of location and inoculation status, were allowed in-office. Moving forward, the Association will conduct reconciliation of payroll allocation twice each year to actual time recorded to ensure salary expense allocated to the federal awards is supported by actual time worked.

#2020-001 ? Significant Deficiency ? Allowable Costs Child Care and Development Block Grant, CFDA #15.575 Criteria The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards. CFR 200.430 states: ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the changes are accurate, allowable, and properly allocated.? Condition During the course of the audit, it was determined that one employee did not maintain contemporaneous time and effort reporting hours to support salary percentage allocation to the federal grant. Management used a historical salary percentage for allocation among general operations and various grants. Cause The cause is human error. Effect The potential effects of not maintaining contemporaneous time and effort reporting could include an over or understatement of salary expenses allocated to the federal grant. Questioned Costs None Perspective Information The finding noted related to one (1) individual. All other employees maintained contemporaneous time and effort reporting records. Identification as a repeat finding There was no similar finding in the prior year.