Nevada Test Site Historical Foundation

U.S. Department of Education, Congressionally Funded Community Projects, Assistance Listing Number 84.215K – Internal Control Over Compliance, Approval of Payroll Transactions – Allowable Costs Compliance Requirement Criteria: As defined in 2 CFR 200.303, a recipient of federal grant funding must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition: During our audit, we tested all payroll transactions drawn from Federal grant funds for three pay periods during the fiscal year. We discovered that for one employee during one pay period, no evidence of approval of the transaction was maintained. Cause: The Foundation’s internal controls over payroll transactions were not operating effectively. Effect: Improperly operating internal controls over payroll transactions could result in unallowable costs charged to federally sourced grant funds. Repeat Finding: No Recommendation: We recommend that management develop a system of internal controls that requires evidence of approval be maintained for all payroll transactions charged to federally sourced grants. Views of responsible officials and planned corrective actions: To ensure that only proper labor costs are included in grant funding requests, the invoice reported to the grant issuing agency is reviewed by the Project Manager and evidenced by his signature. This review includes reviewing the individual labor charges prior to signing the invoice. All individuals who support the grant purpose and are funded by a grant will be separately identified and the ratio of allowable time to total time will be determined for each pay period. Allowable cost for each individual will be aggregated to the total labor cost for the period and be included in the invoice requesting fund draws. These procedures will be in effect as of the date of this writing.

To ensure that only proper labor costs are included in grant funding requests, the invoice reported to the grant issuing agency is reviewed by the Project Manager and evidenced by his signature. This review includes reviewing the individual labor charges prior to signing the invoice. All individuals who support the grant purpose and are funded by a grant will be separately identified and the ratio of allowable time to total time will be determined for each pay period. Allowable cost for each individual will be aggregated to the total labor cost for the period and be included in the invoice requesting fund draws. These procedures will be in effect as of the date of this writing.