Multnomah County

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…

Corrective action: Management agrees with the finding and auditor’s recommendation. Going forward a routine internal control process will be implemented to reconcile the budgeted allocation methodology to the actual amounts incurred to ensure that the amounts charged to the federal grant do not exceed actual expenses incurred. In addition, the County will ensure that all costs allocated to federal grants have a direct benefit going forward. This will be resolved by June 30, 2025. As for the Mail Distribution Fund, the County will perform an annual reconciliation of budgeted to actual expenses billed and if applicable, will adjust amounts charged to ensure that only actual costs are billed to federal grants. Th…

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 interna…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2022-001: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Going forward an internal control will be in place to retain a copy of each report submitted with evidence of required submission date when it is not maintain within the third party reporting system. This will be resolved by June 30, 2023. The Deputy CFO will be responsible for ensuring that the correcting actions take place as described. If you have any questions of require additional information, please feel free to contact me at (5…

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 …

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2021-001: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Our HCM Workday Support team discovered this error in October 2020 and immediately implemented a new process to correct any duplicative premium pay. These items were resolved by June 30, 2021. Finding #2021-002: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Our HCM and Finance Workday Support team is working on a solution that would prevent W…

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…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2021-001: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Our HCM Workday Support team discovered this error in October 2020 and immediately implemented a new process to correct any duplicative premium pay. These items were resolved by June 30, 2021. Finding #2021-002: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Our HCM and Finance Workday Support team is working on a solution that would prevent W…

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 Coun…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2020-001: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. The County implemented a new Enterprise Resource Planning (ERP) system, Workday, which encompasses all employee and manager approvals for time entry. If a manager did not approve their employee?s time before the payroll cut off date, a Workday Admin staff has to advance time entered without approval to ensure that the employee is paid for time worked. Starting October 2020 a new process was implemented within Workday that will send a ?To…

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 enter…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2020-002: Allowable Costs ? Significant Deficiency in Internal Controls over Compliance Management agrees with the finding and auditor?s recommendation. Our HCM Workday Support team discovered this error in October 2020 and is currently working with Workday to identify a solution to remove the duplicate premium pay. Management anticipates these items will be resolved by June 30, 2021.

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 responsib…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2020-003: Matching ? Other Matters Management agrees with the finding and auditor?s recommendation. The Program is establishing a tracking process and monitoring protocols to ensure future compliance. Management anticipates these items will be resolved by June 30, 2021.

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, w…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned Costs Finding #2019-001: Allowable Costs ? Significant Deficiency in Internal Control Management agrees with the finding and auditor?s recommendation. The County has recently implemented a new Enterprise Resource Planning (ERP) system, Workday, which encompasses all employee and manager approvals for time entry. If a manager did not approve their employee?s time before the payroll cut off date, a Workday Admin staff has to advance time entered without approval to ensure that the employee is paid for time worked. Starting February 1, 2020 a new process will be implemented within Workday that will sen…

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 consiste…

Corrective action: Management?s View and Corrective Action Plan to Current Year Audit Findings and Questioned CostsFinding #2019-002: Allowable Costs ? Significant Deficiency in Internal Control Management agrees with the finding and auditor?s recommendation. Effective 7/1/2019 the County has developed an alternative method to specifically account for the complexities of actual time worked by employees and the eligibility of both Weatherization and LIHEAP funding. For all Programs, employees will record actual hours worked to be in compliance with the County?s internal control policies. The Deputy CFO will be responsible for ensuring that the correcting actions take place as described. If you have any ques…