BOYS & GIRLS CLUB OF BROWARD COUNTY, INC.Non-Profit

2020-001 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on Federal Program - U.S. Department of Agriculture Passed through Florida Department of Health CFDA Number: 10.558 CFDA Name: Child and Adult Care Food Program Criteria - Payroll expenditures including requests for reimbursement should include only those costs allowable under the grant agreement. Overtime, compensatory time, holiday pay, paid leave, employee incentives, and severance pay are specifically disallowable under the grant agreement in effect during the fiscal year under audit. Condition ? During our testing of payroll disbursements, we noted that the overtime wages for 5 employees was included as part of payroll charges submitted to the grant for reimbursement. Cause - An appropriately detailed level of review and approval of payroll charges was not completed prior to submission for reimbursement by the federal program to ensure that overtime costs were not included. Effect or Potential Effect ? Failure to properly adhere to policies and procedures related to allowable costs could result in inaccurate reporting of expenditures during a specified period and possible disallowance of funds. Known Questioned Costs - $416 Context ? We tested a sample of forty items and found five exceptions as noted in the condition, which represented $416 in overtime costs overcharged to the grant. This condition was identified per review of management?s compliance with specified requirements using a statistically valid sample. In total, per management?s fiscal year end payroll report, total organization-wide overtime paid as of June 30, 2020 was $26,524. The failure of the control over compliance surrounding proper review of allowable costs is considered a significant control deficiency based upon the potential impact of the failure in this control on this and other federal programs. Repeat Finding - This is considered a repeat finding from prior year as it involves a failure in the same control over compliance related to review of allowable costs related to payroll as finding 2019-001 included in the fiscal year 2019 report. Recommendation - We recommend that management ensure its policies and procedures are followed on a consistent basis. Management Response ? The implementation of additional levels of review of the Monthly Personnel Activity Reports has resulted in better accuracy in ensuring that correct earnings are always used. This year?s oversight occurred with the change in the Department of Labor rules starting January 1, 2020. Employees charged to this grant were previously classified as ?exempt? and therefore not eligible for overtime pay. Certain employees that did not meet the new salary thresholds under the new FSLA rules were reclassified to ?non-exempt? status and became eligible for overtime pay. Because of the prior year finding around this same control, we were careful to include all earnings paid per month for all employees charged to the grant but neglected to verify that overtime pay was selected as an allowable cost under the contract. For the current fiscal year we have requested that overtime pay be considered an allowable cost and this request was approved by the state. In addition, management has re-instated the previously open position of Grant Accounting Coordinator. This position?s primary focus will be oversight of all grant contracts and reporting to ensure compliance. As of the date of this report the Grant Accounting Coordinator position has been filled.