Washington County Commission on Aging, Inc.Non-Profit

Finding 2024-001 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted six instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Thes errors identified occurred earlier in the fiscal year and prior to the completion of the FY 2023 audit when management became aware of the issue and implemented additional controls. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. After the issue was brought to the attention of management during the FY 2023 audit which was conducted in February 2024, no similar errors were detected in our sample. Effect: The effect of the errors noted above was immaterial; however, an inherent risk exists that errors could be material without a sufficient review process. Questioned Costs: N/A Repeat Finding: Yes Recommendation: As noted above, we recommend the Organization continue monitoring the recording of payroll costs to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. Additional controls were implemented late in fiscal year 2024 to ensure accurate recording of time charged to programs as reflected on the employee’s timesheet, which included training and periodic reviews of payroll transactions. As noted above, the errors cited were prior to those controls implemented.

U.S. Department of Health and Human Services Pass-through Awards: Maryland Department of Aging Federal programs: All ALN Nos.: All Finding 2023-001 Late Filing of Single Audit Submission Criteria: The Federal Office of Management and Budget (OMB) Circular 2 CFR 200.512(a) requires that a non-profit organization expending $750,000 or more in total cumulative Federal funds must have a Single Audit performed in accordance with the Single Audit Act. This audit reporting package must normally be submitted and received by the Federal Audit Clearing house (FAC) nine months after the fiscal year end. The due date for submission of WCC’s June 30, 2022, audit to the Clearing house was March 31, 2023. Condition: The fiscal year 2022 audited financial statements and report on the Schedule of Federal Awards and submission of the Data Collection Form was not completed and filed by March 31, 2023. Cause: This incident is an anomaly due to the unanticipated loss of an employee in a small department. The root case is lack of human capital in the department responsible for the submission of the audit to the Federal Audit Clearinghouse. Effect: Management was not in compliance with the requirement to timely submit their Single Audit to the FAC. The Organization will not qualify as a low risk auditee for the next two fiscal years due to the late filing of the FY 2022 audit submission. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization ensure the audited financial statements, report on the Schedule of Expenditures of Federal Awards and the submission of the Data Collection Form are submitted timely in accordance with the required Uniform Guidance due date. Response: We concur with the finding. We acknowledge the importance of adhering to regulatory deadlines and ensuring the timely submission of these documents. We have already implemented measures to streamline our reporting process and enhance our internal communication channel to facilitate timely completion and submission of the required documents.

Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.