Multnomah County OregonLocal Government

Criteria or specific requirement: Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes provided that the recipient’s system of internal controls includes processes to perform a periodic after-the-fact check to confirm amounts have been based on a reasonable basis. Condition: We obtained evidence indicating that the County charged budgeted amounts for facilities, records and information technology and did not confirm the amounts charged were not in excess of what was incurred subsequent to year-end. Context: For the Aging cluster, of the nine transactions tested, two items tested were vacant space and six items were based on budgeted full-time equivalents with no look back performed at the end of the fiscal year. One of these items was for the mail distribution fund that also has no look back performed at the end of the fiscal year. For the Child Support Enforcement program, of the 19 items tested, two items were vacant space and five items were based on budgeted full-time equivalents with no look back performed at the end of the fiscal year. Effect: The County could have charged costs in excess of incurred charges as the amounts charged to federal awards were based on budgeted figure. Cause: The Departments were not knowledgeable that if amounts were based on a budgeted figure, there should be a periodic after-the-fact check to confirm amounts charged were less than amounts incurred. Repeat finding: No. Recommendation: We recommend the County perform a review of any budgeted amounts charged to federal grants to confirm the amounts charged do not exceed amounts incurred. We further recommend the County stop charging costs for vacant space to federal programs. Views of responsible officials: Management agrees with the finding and recommendation.

Criteria or specific requirement: Performance and financial monitoring and reporting done post federal award must comply with the post federal award requirements at 45 CFR part 75, subpart D. Condition: We were unable to obtain evidence supporting the timely submission of monthly special reporting required under the program. This did not extend to the quarterly reporting required under the program. Context: Of the 12 monthly reports available for testing, we randomly selected three reports filed during fiscal year 2022 noting there was no support available to substantiate that the reports were submitted timely by the County. Effect: There could have been delays in required monthly reporting to Treasury. Cause: There is currently no system in place to track monthly reporting deadlines and submissions. Repeat finding: No. Recommendation: We recommend the County work to establish an internal tracking system to memorialize reporting deadlines and track the submission of required reports under the program. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: Costs charged to federal funds under the award must comply with the cost principles at 45 CFR part 75, subpart E. Condition: We identified one instance in which a grant was overcharged for an employee?s premium pay in July 2020. As noted below, this is a repeat finding. As a result of the identification of the finding in the prior year, the County worked to implement a fix within Workday to correct this issue which was completed in October 2020. There were no instances identified subsequent to the fix implemented by the County in October 2020. Context: We selected 25 payroll charges from the entire population of payroll charges for the fiscal year. Of the items selected for testing, one error was identified. For one employee, we noted the employee received an additional $16.64 of bilingual premium pay. This premium pay was calculated by the County?s ERP system, Workday, in error. Effect: Grants could be overcharged, and employees overpaid, for duplicate premium pay in certain circumstances. Management was unable to quantify the total error. Cause: Subsequent to negotiations with the County?s unions, a breakout was requested on the employee?s timecard to reflect regular salaries and premium pay. When this change was made, an employee receiving a permanent premium pay who enters their time to a grant tag, cost center, or MOCS during a pay period where the employee also codes absent time, Workday may duplicate the premium pay paid to employees in some instances in error. Repeat finding: Yes, see 2020-002. Recommendation: We recommend the County work with Workday to identify a solution removing the duplicate premium pay. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: Costs charged to federal funds under the award must comply with the cost principles at 45 CFR part 75, subpart E. Condition: We identified one instance in which a grant was charged more hours than paid to the employee tested. Context: We selected 40 payroll charges from the entire population of payroll charges for the fiscal year. Of the 40 items selected for testing, one error was identified resulting in the grant being overcharged by $168.02. This charge to the grant was calculated by the County?s ERP system, Workday, in error. Effect: Grants could be overcharged in instances where non-exempt, salaried employees, code time within Workday in excess of 86.67 hours. Management was unable to quantify the total error. Cause: When non-exempt, salaried employees code time within Workday, the system charges the hours worked at the employee?s effective pay rate, for all hours coded. In cases where there are hours coded in excess of the total hours paid of 86.67, the charge automatically generated by Workday may be in-excess of the amount paid to the employee, resulting in an overcharge to the grant and a negative offsetting credit to the employee?s home cost center resulting in the employee being paid the appropriate amount. Repeat finding: No. Recommendation: We recommend the County develop an internal policy to ensure hours coded by nonexempt employees in any given pay period do not exceed the hours paid. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: County policy requires actual effort expended on each project to be reviewed and certified by each responsible employee, and then approved by their supervisor at the end of each pay period. Condition: We identified an instance where there was no supervisor approval of employee time. Context: Of the 30 items selected for testing, one item was identified. For one employee timecard, we noted the timecard was not reviewed and approved by their supervisor. Effect: Errors on timecards could go undetected and result in incorrect payroll related expenses charged to the program. Cause: In order for payroll to be paid, time entered into the system must be certified. Controls in place do not address the risk the individual certifying the payroll is someone other than the employee?s supervisor. Repeat finding: Yes, see 2019-001. Recommendation: We recommend the County address the internal controls regarding supervisor approval of time to ensure time entered and charged to the program is appropriate and consistent with actual hours worked. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: Costs charged to federal funds under the award must comply with the cost principles at 45 CFR part 75, subpart E. Condition: We identified one instance in which a grant was overcharged for an employee?s premium pay. Context: Of the 31 items selected for testing, one error was identified. For one employee, we noted the employee received an additional $8.08 of bilingual premium pay. This premium pay was calculated by the County?s ERP system, Workday, in error. Effect: Grants could be overcharged, and employees overpaid, for duplicate premium pay in certain circumstances. Management was unable to quantify the total error. Cause: Subsequent to negotiations with the County?s unions, a breakout was requested on the employee?s timecard to reflect regular salaries and premium pay. When this change was made, an employee receiving a permanent premium pay who enters their time to a grant tag, cost center, or MOCS during a pay period where the employee also codes absent time, Workday may duplicate the premium pay paid to employees in some instances in error. Recommendation: We recommend the County work with Workday to identify a solution removing the duplicate premium pay. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: Federal funds may not pay for more than 75% of expenditures for Title IIIE services. Condition: We identified one instance in which the County?s match was less than the required amount. Context: The County is subject to several matching requirements. Of the three matching requirements required by the grant agreement, it was noted the County reported $23,560 of match for Title IIIE services whereby the required matching amount was $71,094. This matching requirement is the smallest of the three matching requirements included in the grant agreement. Effect: The County had questioned costs totaling $47,534 resulting from unmatched funds. Cause: The County did not appropriately budget the expenditures for the required match. Recommendation: We recommend the County verify funds are budgeted to ensure match amounts are met on an annual basis. Views of responsible officials: Management agrees with the finding and auditor recommendation.

Criteria or specific requirement: County policy requires actual effort expended on each project to be reviewed and certified by each responsible employee and then approved by their supervisor, at the end of each pay period. Condition: We identified an instance where there was no supervisor approval of employee time. Context: We noted, for one pay period tested, the employee time card was not reviewed and approved by their supervisor. Effect: Errors on time cards could go undetected and result in incorrect payroll related expenses being charged to the program. Cause: In order for payroll to be paid, time entered into the system must be certified. Controls in place do not address the risk that the individual certifying the payroll could be someone other than the employee?s supervisor. Additionally, controls implemented currently do not allow for retroactive approval of employee time, when review by the employee?s supervisor was not done timely. Recommendation: We recommend that the County address the internal controls regarding supervisor approval of time to ensure that time entered and charged to the program are appropriate and consistent with actual hours worked. Views of responsible officials: Management agrees with the finding and auditor recommendation

Criteria or specific requirement: As of January 1, 2019, the County?s payroll policy was updated to stipulate payroll charges to programs be based on actual hours and certified by employees through daily time entry. Condition: Quarterly time studies were used to allocate payroll charges to programs, after the County?s policy changed. Context: We noted, for each pay period tested, time studies were used to support payroll allocations. Effect: Time charged was not based on actual hours worked and certified by the employee, daily, which is against County policy. Cause: Controls in place were not sufficient to ensure the County?s payroll policy was properly adopted on the effective date, resulting in delays/ inconsistent adoption of the policy by some departments. Recommendation: We recommend that the County address the internal controls to ensure payroll charged to programs is consistent with County policy, and based on actual hours, certified by employees on a daily basis. Views of responsible officials: Management agrees with the finding and auditor recommendation.

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