Audit 314844

FY End
2023-06-30
Total Expended
$16.29M
Findings
6
Programs
16
Year: 2023 Accepted: 2024-07-10
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
478175 2023-002 Material Weakness - ABG
478176 2023-002 Material Weakness - ABG
478177 2023-002 Material Weakness - ABG
1054617 2023-002 Material Weakness - ABG
1054618 2023-002 Material Weakness - ABG
1054619 2023-002 Material Weakness - ABG

Contacts

Name Title Type
UDD3KL1MJMG6 Donna Aultz Auditee
9182731841 Vanessa Dutton Auditor
No contacts on file

Notes to SEFA

Title: Note 1 ‐ Basis of Presentation Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Center’s summary of significant accounting policies is presented in Note 1 in the Center’s basic financial statements. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Center has not elected to use the 10% de minimis cost rate. The accompanying schedule of expenditure of federal awards (the Schedule) includes the federal award activity of Grand Lake Mental Health Center, Inc. (the Center) under programs of the federal governments for the year ended June 30, 2023. The information is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the schedule presents only a selected portion of the operations of the Center, it is not intended to and does not present the financial position, changes in net assets, or cash flows of the Center.
Title: Note 4 ‐ Provider Relief Funds Accounting Policies: Expenditures reported in the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Center’s summary of significant accounting policies is presented in Note 1 in the Center’s basic financial statements. No federal financial assistance has been provided to a subrecipient. De Minimis Rate Used: N Rate Explanation: The Center has not elected to use the 10% de minimis cost rate. The Center received amounts from the U.S. Department of Health and Human Services (HHS) through the Provider Relief Fund and American Rescue Plan Rural Distribution (PRF) program (Federal Financial Assistance Listing #93.498) in the amount of $0 and $1,662,098 for the years ended June 30, 2023 and 2022. The PRF expenditures are not recognized on the Schedule until the expenditures are included in the reporting to HHS as required under the PRF program. The expenditures were reported in Period 4 on March 29, 2023, as noted in the table on the next page.

Finding Details

Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.
Department of Health and Human Services, Assistance Listing No. 93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services, 1H79SM083255‐01, 2/15/2022 – 2/14/2023; Assistance Listing No. 93.696, Certified Community Behavioral Health Clinics Expansion Grants, 1H79SM087079‐ 01/1H79SM087007‐01, 9/30/2022 – 9/29/2023 Activities Allowed or Unallowed; Allowable Costs/Cost Principles; Matching, Level of Effort, and Earmarking Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Per Uniform Guidance (2 CFR Section 200.430(i), Standards for Documentation of Personnel Expenses) as it relates to federal grants: (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) Be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) Be incorporated into the official records of the non‐Federal entity; (iii) Reasonably reflect the total activity for which the employee is compensated by the non‐Federal entity, not exceeding 100% of compensated activities (for IHE, this per the IHE's definition of IBS); (iv) Encompass federally‐assisted and all other activities compensated by the non‐ Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non‐Federal entity's written policy; (v) Comply with the established accounting policies and practices of the non‐Federal entity (See paragraph (h)(1)(ii) above for treatment of incidental work for IHEs.); and (vii) Support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one Federal award; a Federal award and non‐Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases; or an unallowable activity and a direct or indirect cost activity. 2 CFR Part 200, OMB Compliance Supplement, defines Level of Effort as follows: Level of effort includes requirements for (a) a specified level of service to be provided from period to period, (b) a specified level of expenditures from non‐federal or federal sources for specified activities to be maintained from period to period, and (c) federal funds to supplement and not supplant non‐federal funding of services Condition: The Center could not readily provide the appropriate documentation to support the allocations of compensation applicable to the referenced programs for actual time worked, or to support allowable costs or that the level of effort requirements, as outlined in the grant contracts, were achieved. Cause: The process used to track employee payroll does not adequately track the allocations of payroll or time worked to the respective activities or federal programs. As a result, certain expenditures were inappropriately claimed as program expenditures, but could not be substantiated for purposes of allowable costs or level of effort. Effect: The Center is at risk for noncompliance with allowable activities and allowable costs, as well as level of effort requirements. Questioned costs: $872,088 in payroll was identified as allowable costs for Section 223, Demonstration Programs to Improve Community Mental Health Services, which could not be substantiated. $1,187,041 in payroll was identified as allowable costs for Certified Community Behavioral Health Clinics Expansion Grants, which could not be substantiated. Context: A nonstatistical sampling of 40 out of over 14,000 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Section 223, Demonstration Programs to Improve Community Mental Health Services, which accounted for $114,123 of $1,187,041 total program expenditures. 2 of 2 employees were tested with respect to level of effort requirements as outlined in the program contract, but supporting information could not be provided. A nonstatistical sampling of 25 out of 206 transactions were selected for testing of Activities Allowed and Unallowed, and Allowable Costs/Cost Principles, in Certified Community Behavioral Health Clinics Expansion Grants, which accounted for $139,829 of $910,628 total program expenditures. 4 of 4 employees were tested with respect to level of effort requirements as outlined in the program contracts, but supporting information could not be provided. Repeat Finding From Prior Year: No Recommendation: Controls should be put in place to ensure that expenditures of program funds allocated through payroll expense are reviewed and approved by program management and are properly allocated based on time and activities worked consistent with the grant requirements. Additionally, level of effort requirements as made known in grant contracts should be substantiated by payroll allocation or other records. Views of Responsible Officials: We agree with the finding. See additional response in the Corrective Action Plan.