The Learning Community Charter SchoolNon-Profit

2024-001 Payroll Allocations Federal Program - U.S. Department of Education – Education Stabilization Fund (ALN 84.425D) Federal Award Number and Year - S425E210046 – FY24 Criteria - Per 2 CFR 200.430, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed, are supported by a system of internal control, and must reasonably reflect the total activity for which the employee is compensated. Allocations must be made based on actual, not budgeted, time unless subsequently adjusted. Condition - During testing of payroll expenses charged to the ESSER grant, we identified instances where employee time reporting did not agree to the payroll costs allocated and charged to ESSER funding. In 2 out of 25 payroll transactions tested, totaling $6,286 in ESSER payroll charges, employee time reporting did not agree to the amount charged. Cause - The payroll allocation worksheet used to create the postings in the accounting system for payroll transactions was not updated for changes in employee responsibilities. Effect - The Organization charged payroll costs to the ESSER grant for time and effort not spent on the grant initiatives. Questioned Costs - $6,286 Context - Of a sample of 25 payroll transactions tested, 2 included variances between employee time reporting and payroll postings. The total ESSER payroll tested was $61,897, with total ESSER payroll expenditures of approximately $873,128 during the fiscal year. Identification as a Repeat Finding - No, this is a new finding in FY24. Recommendation - We recommend the Organization update the payroll allocation worksheet for changes in employee time and effort reporting on a regular basis with a frequency no less than quarterly. Payroll allocations to federal programs should be based on actual time worked on the program and time and effort reporting should agree to the amount charged. Views of Responsible Officials - we agree with the finding and determined it was due to an oversight by the employee on their time and effort reporting to not reflect an updated allocation based on a review of the job description and work completed by management. All work items performed by the employee would have been eligible and allowable under the grant contract.