RIO GRANDE EDUCATIONAL COLLABORATIVE, INC.Non-Profit

2021-001 (2020-001) PAYROLL AND CHARGES TO THE GRANT (MODIFIED AND REPEATED) TYPE OF FINDING: Significant Deficiency/Non-Compliance Federal program information: Funding agency: U.S. Department of Education Title: Twenty-First Century Learning Centers CFDA Number: 84.287 Questioned Costs: Unknown CONDITION During our testing of payroll, we noted individuals tested where their hours charged were consistent every pay period. The following item was noted: Certain RGEC salaried personnel were charged to the grant based on budget availability instead of actual hours worked on the grant through March 31, 2021. The same hours were charged to the grant every pay period through March 31, 2021. It is our understanding that these Administrator, Coordination, and Data Entry positions are working these approximate amounts of hours every pay period. Progress from this condition over the prior fiscal year: Effective April 1, 2021, RGEC began to charge actual hours charged to the 21st Century Grant for salaried individuals. CRITERIA Uniform guidance section 200.430(i) states: Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. Documentation must be maintained regarding the allocation of the salary. Budget estimates alone do not qualify as support for charges to awards. Grant charges must be adjusted to reflect the actual time worked. Records for employees and independent contractors should be maintained in an employee or contractor file. Proper oversight of pay and benefits are best practices to maintain integrity of the payroll system. EFFECT More or less actual hours may have been worked, potentially resulting in an incorrect report of costs to the grant. CAUSE Hours were charged to the grant at the budgeted rate in lieu of actual hours worked. Any additional time beyond budget is paid from other RGEC funds. RECOMMENDATION We recommend that hours charged be reflective of actual time spent working on the grant during the pay period. Budgets are a plan and can be adjusted as necessary to reflect changes that occur during the course of operations. All employee or contractor files should have documentation that agrees to rates paid and include the period of time the rate is effective. RGEC should look to some automation for time recording as it is tedious for staff and reviewers. Timesheets should be created to eliminate the ability to bill for the same time twice and clearly show the rates and service when there are multiple pay rates for multiple levels of service. MANAGEMENT RESPONSE Corrective Action: Item One: Effective beginning April 1, 2021, RGEC adjusted its practices to reflect the charging of actual hours worked by pay period for Administrator, Coordinator and Data Entry positions rather than entering constant hours across pay periods. Item Two: Effective beginning April 1, 2021, RGEC adjusted its practices to ensure that all pay rate change documentation is included in individual contractor files. Item Three: Effective beginning April 1, 2021, RGEC adjusted its time recording and review functions to consolidate all employee hours onto a single timesheet document for that employee for each pay period. In addition, we are exploring numerous strategies for automating the time recording and payroll functions. Due Date of Completion: April 1, 2021 Responsible Party(ies): CFO/COO

2020-001 PAYROLL AND CHARGES TO THE GRANT TYPE OF FINDING: Significant Deficiency/Non-Compliance Federal program information: Funding agency: U.S. Department of Education Title: Twenty-First Century Learning Centers CFDA Number: 84.287 Questioned Costs: Unknown CONDITION During our testing of payroll, we noted for five of six individuals tested where their hours charged were consistent every pay period. During our testing of other disbursements, we noted two independent contractors in our sample that had pay changes during the latter part of the fiscal year without clear documentation to substantiate the increase. Further investigation determined that due to COVID-19, pay raises were granted to site supervisors and instructors. The following items were noted: ? RGEC personnel are charged to the grant based on budget availability instead of actual hours worked on the grant. The same hours are charged to the grant every pay period for five individuals. It is our understanding that these Administrator, Coordination, and Data Entry positions are not working these exact amounts of hours every pay period. ? Pay rate changes for independent contractors occurred during the fiscal year for site supervisors and instructors. Only one of seven individuals had documentation in their file that matched the rate of pay. ? For a site supervisor, for one pay period tested, there was a morning and afternoon rate paid for supervision, instruction, and data entry work. The three timesheets completed for the pay period resulted in an overpayment for 15 minutes of time occurring for November 4, 2019 for this supervisor. CRITERIA Uniform guidance section 200.430(i) states: Charges to Federal Awards for salaries and wages must be based on records that accurately reflect the work performed. Documentation must be maintained regarding the allocation of the salary. Budget estimates alone do not qualify as support for charges to awards. Grant charges must be adjusted to reflect the actual time worked. Records for employees and independent contractors should be maintained in an employee or contractor file. Proper oversight of pay and benefits are best practices to maintain tegrity of the payroll system. EFFECT More or less actual hours may have been worked, potentially resulting in an incorrect report of costs to the grant. CAUSE Hours were charged to the grant at the budgeted rate in lieu of actual hours worked. Any additional time beyond budget is paid from other RGEC funds. It was also considered a best practice to increase salaries for staff working with students during the COVID-19 outbreak. RECOMMENDATION We recommend that hours charged be reflective of actual time spent working on the grant during the pay period. Budgets are a plan, and can be adjusted as necessary to reflect changes that occur during the course of operations. All employee or contractor files should have documentation that agrees to rates paid and include the period of time the rate is effective. RGEC should look to some automation for time recording as it is tedious for staff and reviewers. Timesheets should be created to eliminate the ability to bill for the same time twice and clearly show the rates and service when there are multiple pay rates for multiple levels of service.

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