Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-005: Time Allocation and Personnel Documentation Retention
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
paragraph 430 “Compensation – personal services” requires that charges to Federal awards for
salaries and wages must be based on records that accurately reflect the work performed, and that
these records must be supported by a system of internal control which provides reasonable assurance
that the charges are accurate, allowable, and properly allocated. Additionally, these records must
comply with established accounting policies and practices of the non-Federal entity.
Condition: As part of our audit procedures around payroll, we noted instances of payroll allocations to
programs which did not accurately represent the time worked and/or salary rate of the employee. While
misallocations were not significant in their amounts, the errors themselves suggest the need for more
detailed review of the payroll allocation approval and entry process.In addition, we noted that HIPS does not maintain documentation for cost of
living increases awarded to employees subsequent to their annual agreed upon rate of pay, which
resulted in multiple instances where the employees current rate of pay noted could not be
substantiated.
Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or
differences from the timesheets completed by staff. HIPS does not maintain adequate documentation
of staff changes in salary rate from year to year.
Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various
programs.
Questioned Costs: Undetermined
Context: The misallocations identified represent 12.5% of the sampled payroll transactions (5 out of
40). Although the majority of payroll allocations were supported by appropriate documentation, these
two exceptions suggest a need for improved controls over time and effort reporting to prevent isolated
errors from becoming more systemic issues. In addition, we noted the majority of the employees
reviewed during testwork did not have documentation to support the salary as of the pay period
selected for testing.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: We recommend that the finance department perform a more detailed review of
the monthly program allocations to ensure complete and accurate entry of payroll allocations. We also
recommend that documentation for changes in rate of pay for all staff be maintained internally over the
course of each employee's respective employment with HIPS.
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.
Finding 2003-04: Schedule of Expenditures of Federal Awards
Information on the Federal Program: All programs in the 2023 SEFA. See Finding 2023-003
Questioned Costs: None.
Context: The exception noted during the audit pertained to all programs under the SEFA for the year
ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable.
Criteria or Specific Requirement: In accordance with 2 CFR Section 200.508 (b), HIPS is required to
prepare appropriate financial statements, including the Schedule of Expenditures of Federal Awards
(SEFA).
Condition: During the audit, we noted that HIPS experienced difficulty in preparing and ensuring that
all Federal expenditures were properly included in the Schedule of Expenditures of Federal Awards. As
a result, a significant amount of time was spent by management during the audit process reconciling
the schedule, resulting in an audit delay.
Cause: HIPS experienced turnover during the last fiscal year, specifically related to employees
responsible for financial reporting and tracking of Federal award expenditures.
Effect or Potential Effect: HIPS experienced difficulty in preparing an accurate SEFA.
Recommendation: We recommend that each Federal program should have a distinct code set up in
the accounting system in order to track the direct costs attributable to that program. We also
recommend that management properly reconcile Federal expenditures during year on a consistent
basis in order to prepare the Schedule of Expenditures of Federal Awards on a timely basis.