UNITED WAY OF GREATER HOUSTON

Finding #2025-001 – Significant Deficiency and Other Noncompliance. Applicable federal program: U. S. Department of Treasury, COVID-19 – Coronavirus State and Local Fiscal Recovery Funds, Assistance Listing #21.027, Passed through BakerRipley, Contract period: 02/01/23 – 12/31/26, Contract number: None. Criteria: Allowable costs – The Uniform Guidance, Subpart E Cost Principles, requires that charges to federal awards for salaries and wages be based on records that accurately reflect work performed and support the distribution of an employee’s salary or wages among specific activities or cost objectives, which includes being supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition and context: In a sample of 35 payroll transactions, 14 transactions for three employees did not have time and effort documentation to support the allocation of salary costs charged to the major program. For these employees who work less than 100% on the program the employees track their activities on their calendars. However, salaries were allocated based on a fixed percentage that did not vary from period to period. Cause: There was not a procedure in place to compare the actual percentage of time worked based on their calendars to the fixed percentage charged to the grant to ensure that the actual percentage of time worked was equal to or greater than the percentages charged to the grant. Effect: Failure to establish controls for adherence with the Uniform Guidance for allowable costs may result in unallowed costs charged to the program. Questioned costs: Unknown. Recommendation: Strengthen controls to require comparison of actual time and effort percentages by activity to the percentage of salaries and wages allocated to federal programs. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.