ACLED ANALYSIS INCORPORATEDNon-Profit

SIGNIFICANT DEFICENCY Allowable Cost and Internal Control Criteria: Payroll expenses and related employee benefits should be allocated based on actual time spent on the project. Condition: Incorrect percentage was used to allocate payroll expenses and related personnel cost to the program. Cause: Lack of review or ineffective oversight of allocation expenses to the program. Based on October 2021 timesheet, 50% of one employee?s time was spent on the program and 70% was allocated to the program. Effect: Incorrect amount of payroll expenditures and related personnel cost were charged to the program for October 2021. Context: Employees track their time allocated to the program on their timecards correctly. However, the allocation percentage was incorrectly calculated and manually entered into the prepopulated template. Questioned Cost: $2,358. Correct payroll expenditure allocated to the program for October 2021 should be $24,312 (salary plus payroll tax) and the amount allocated to the program was $26,446, which creates a difference of $2,134. Correct related personnel cost including payroll admin fees, retirement benefit and health and dental insurance allocated to the program for October 2021 should be $2,547 and the amount allocated to the program was $2,771, which creates a difference of $224. The total difference is $2,358. Recommendation: The management should implement procedures of checks and balances for any numeric calculations. There should be a formal review process of verification of proper allocation of payroll expenses. Views of responsible officials and planned corrective actions: The management agree with this finding and will implement adequate checks and balances to ensure that this problem does not occur. Please refer to the corrective action plan on page 28.