DENCO Area 9-1-1 District

Criteria: According to 2 CFR 200.303, a non-federal entity must maintain effective internal control that provides reasonable assurance that the non-federal entity complies with Federal statutes, regulations, and the conditions of the Federal award. In the context of payroll expenditures, internal control should ensure that costs charged to the Federal program are allowable, in particular that they are allocable to the program (i.e. based on actual hours worked). Condition: For employees charging less than 100% of their payroll to the federal program, timesheets were used to identify time spent on program and nonprogram activities. During our testing of these payroll transactions, we noted 9 instances where the portion of an employee’s pay reimbursed by the program was different than the portion of hours supported by the timesheet. Cause: The District’s process for calculating these split payroll costs, and subsequently requesting reimbursement, did not include detailed review of all supporting calculations. Thus, the accuracy of certain requested payroll amounts relied on the personnel creating the reimbursement request. Effect or Potential Effect: While the noted errors did not result in charging unallowable costs, undetected future errors could cause funds to be drawn for payroll beyond the amount related to the program. Recommendation: We recommend that the District strengthen its controls over reimbursement requests by increasing the scope and detail of review prior to submission to the granting agency. Secondary review should be performed by another individual who did not prepare the original request when practicable.Contact Person Responsible For Corrective Action: Greg Ballentine, Executive Director Anticipated Completion Date: September 30, 2025 Management’s Response: Management acknowledges receipt of the audit report concerning our internal controls related to the review of reimbursement request worksheets. We appreciate the insight provided in identifying areas for improvement. While multiple levels of internal review were conducted during the creation of the base worksheet, we recognize the addition of columns could inadvertently introduce minor calculation errors and minor, inadvertent employee input errors could occur. To address this, we have implemented a procedure requiring that all worksheets undergo a review by an individual who did not prepare the original reimbursement request.