CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. 2 CFR Part 200.414 requires that indirect costs are supported with a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. 2 CFR Part 200 Appendices III-VII contain the requirements for the development and submission of indirect cost rate proposals and cost allocation plans. A non-Federal entity that has never received a negotiated indirect cost rate, may elect to charge a de minimis rate of 10% of modified total direct costs. Typical examples of indirect (F&A) cost for many nonprofit organizations include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Condition: The Association uses the number of full-time equivalents (FTEs) assigned to programs and locations to generate the distribution lists to allocate the program?s direct and indirect costs. However, the distribution lists have not been updated since 2019 even though the number of FTEs by program and location had changed since 2019. Cause: The Association has not reviewed or updated the distribution lists since 2019. There is no process to review or update the distribution list periodically. Effect or Potential Effect: The outdated distribution lists may cause the allocation of direct and indirect costs to be recorded imprecisely for each program code. Questioned Cost: $15,074 (We selected 42 items to be tested out of 24,368 total items. 7 out of 42 items were noted to have exceptions. The questioned cost of $15,074 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the distribution lists regularly to record the allocations accurately, especially when there are significant personnel changes.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association staff made an error when processing the payroll entries for the pay date of January 26, 2022. Thus, they had to remove the batch for that period and manually post every transaction for the period of January 1 to 15, 2022. When the staff posted the entries, they did not allocate the costs to the correct program/site for the employees who worked for multiple programs, causing payroll expenditures for that period to be charged to one specific program. Cause: Manual entry error. Effect or Potential Effect: Overstatement of payroll costs charged to the Senior Nutrition Program. Questioned Cost: $25,808 (We selected 40 items to be tested out of 2,132 total items. 1 out of 40 items was noted to have exceptions. The questioned cost of $25,808 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend to provide employee training to improve payroll processing and avoid errors. Additionally, manual postings should be reviewed and approved by a supervisor.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association uses two accounting systems: NOVAtime (time clock system) and MIP (in-house accounting/payroll system) to record the payroll expenses and allocations for each program. The allocation percentages are setup differently in both accounting system. Cause: When the FSA has employee changes, the staff only adjusts the allocation percentage in NOVAtime, which cause minor discrepancies when allocating the payroll-related expenses. Effect or Potential Effect: Overstate and/or understate the program expenses. Questioned Cost: Unable to determine. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the MIP system when the staff update the NOVA time system after the personnel action form is reviewed and approved. The Association should also add the system adjustment instructions to the policies and procedures.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. 2 CFR Part 200.414 requires that indirect costs are supported with a cost allocation plan or an indirect cost proposal prepared in accordance with the Uniform Guidance. 2 CFR Part 200 Appendices III-VII contain the requirements for the development and submission of indirect cost rate proposals and cost allocation plans. A non-Federal entity that has never received a negotiated indirect cost rate, may elect to charge a de minimis rate of 10% of modified total direct costs. Typical examples of indirect (F&A) cost for many nonprofit organizations include depreciation on buildings and equipment, the costs of operating and maintaining facilities, and general administration and general expenses, such as the salaries and expenses of executive officers, personnel administration, and accounting. Condition: The Association uses the number of full-time equivalents (FTEs) assigned to programs and locations to generate the distribution lists to allocate the program?s direct and indirect costs. However, the distribution lists have not been updated since 2019 even though the number of FTEs by program and location had changed since 2019. Cause: The Association has not reviewed or updated the distribution lists since 2019. There is no process to review or update the distribution list periodically. Effect or Potential Effect: The outdated distribution lists may cause the allocation of direct and indirect costs to be recorded imprecisely for each program code. Questioned Cost: $15,074 (We selected 42 items to be tested out of 24,368 total items. 7 out of 42 items were noted to have exceptions. The questioned cost of $15,074 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the distribution lists regularly to record the allocations accurately, especially when there are significant personnel changes.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association staff made an error when processing the payroll entries for the pay date of January 26, 2022. Thus, they had to remove the batch for that period and manually post every transaction for the period of January 1 to 15, 2022. When the staff posted the entries, they did not allocate the costs to the correct program/site for the employees who worked for multiple programs, causing payroll expenditures for that period to be charged to one specific program. Cause: Manual entry error. Effect or Potential Effect: Overstatement of payroll costs charged to the Senior Nutrition Program. Questioned Cost: $25,808 (We selected 40 items to be tested out of 2,132 total items. 1 out of 40 items was noted to have exceptions. The questioned cost of $25,808 is a projected amount.) Repeat of a Prior-Year Finding: No. Recommendation: We recommend to provide employee training to improve payroll processing and avoid errors. Additionally, manual postings should be reviewed and approved by a supervisor.
CFDA Title and Number: 93.045 ? Aging Cluster Name of Federal Agency: U.S. Department of Health and Human Services Internal Control over Compliance: Allowable Cost/Cost Principles Criteria: 2 CFR Part 200.405 requires the following direct cost allocation principles: If a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. If a cost benefits two or more projects or activities in proportions that cannot be determined because of the interrelationship of the work involved, then the costs may be allocated or transferred to benefitted projects on any reasonable documented basis. Condition: The Association uses two accounting systems: NOVAtime (time clock system) and MIP (in-house accounting/payroll system) to record the payroll expenses and allocations for each program. The allocation percentages are setup differently in both accounting system. Cause: When the FSA has employee changes, the staff only adjusts the allocation percentage in NOVAtime, which cause minor discrepancies when allocating the payroll-related expenses. Effect or Potential Effect: Overstate and/or understate the program expenses. Questioned Cost: Unable to determine. Repeat of a Prior-Year Finding: No. Recommendation: We recommend that the Association update the MIP system when the staff update the NOVA time system after the personnel action form is reviewed and approved. The Association should also add the system adjustment instructions to the policies and procedures.