OPPORTUNITIES FOR ALL INC. NFPNon-Profit

INTERNAL CONTROL OVER EMPLOYEE RECORDS Criteria: The cost principles in 2 CFR Part 200, subpart E (Cost Principles) prescribe requirements for allowable costs relative to compensation and substantiation requirements. Specifically, 2 CFR Part 200.430(i) states ??costs?must be supported by a system of internal control which provides reasonable assurance that the charges accurate, allowable, and properly allocated.? Condition: Supporting documentation to ascertain approval of employee compensation is not maintained in accordance with the Organization?s policies and procedures. Context: The Organization did not maintain employee records or supporting documentation to confirm compensation approval of the six employees selected for verification. Cause: Supporting documentation to ascertain approval of employee compensation was not maintained on file or available for review. Effect: Inability to review supporting documentation to ascertain compensation limits ability to verify costs allowability as required. As a result of missing documentation, it is not possible to fully ascertain compliance with allowable costs as required by 2 CFR 200.430. Recommendation: The Organization should develop and maintain supporting documentation such as offer letters, employee change of status forms, or contracts for all employees in a central location readily available for review.