Audit 2190

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.

2022-002 Federal Program Name: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services FALN Title and Number: Health Center Program Cluster, FALN 93.224 and 93.527 Criteria or Specific Requirement: Material Weakness Over Financial Reporting – Allowable Costs and Cash Management Condition: Grantees are required to maintain an adequate internal control system to support timely and accurate financial reporting. The accounting system must provide for separate identification of federal and non-federal transactions. Effect: Reporting from the accounting system could not provide an adequate audit trail between payroll timesheets and invoices to expenses drawn against grants for reimbursement. Estimations were used for reimbursement requests. Payroll expenses had to be manually compiled for the entire year to substantiate personnel costs charged to all grants. Estimated costs not related to payroll had to be compared to actual invoices paid to ensure estimation did not exceed the actual costs incurred. Cause: A significant amount of payroll and other expenses were not coded to grants within the accounting system. Time records and invoices allocated to specific grants were not entered into the accounting system under the actual account segment for the funding source and were left in the general operating fund. Staff turnover in the fiscal department contributed to the breakdown in internal controls and process. Recommendation: We recommend that the Organization implement accounting processes and controls over financial reporting to ensure accurate financial reporting. Oversight responsibilities should include review of financial reporting by grants (segments) to verify proper posting andallocation of costs. Views of Responsible Officials and Planned Corrective Action: The following steps have been taken or will be taken to address Finding 2022-002: Shalom Health Care Center, Inc. is reclassifying payroll allocations to better align with the departments and funding services. Shalom Health Care Center, Inc. is working with the payroll company to match the allocations in the payroll system to better identify the cost allocation of payroll and funding source.