Audit 361604

Finding No. 2024-001: Allowable Cost/Activities (Time and effort) Federal Program Title: U.S. Department of Health and Human Services Awards: ALN 93.527 Health Center Program Cluster Criteria: 2 CFR 200.430 established that all salaries and wages charged to Federal awards must be supported by a system of internal controls that provides reasonable assurance that the personnel costs incurred are accurate, allowable, and properly allocated. This includes a system to demonstrate that total compensation paid to individual employees is reasonable according to work performed. Condition: During audit procedures, we tested 40 payroll costs charged to the ALN 93.527 Health Center Program Cluster. Time and effort reporting could not be located for the 7 employees that were charged to Grant H2E for the period September – December 2024 which documented the distribution of the employee’s salary and wages among specific grants by work performed. Cause: The Organization did not follow the policies and procedures in place related to obtaining time and effort certifications from employees. Effect: The federal award may be overcharged or undercharged if actual effort differs from time charged to the award. Questioned Costs: $122,765 Context/Sampling: A sample of 40 payroll transactions were selected for testing. For each transaction, a timecard was obtained for all selected transactions which verified that the employees worked the hours to support the charges to the grant. While all timecards documented total hours worked, none included documentation of the specific time allocated to the federal program. Additionally, time and effort certifications were obtained for 33 of the 40 sampled employees. However, the Organization did not obtain time and effort certifications for the remaining 7 employees whose salaries were charged to the H2E grant. The sample was selected using non-statistical sampling methods and was not intended to be, nor should it be considered, a statistically valid sample. Repeat Finding: No Recommendation: Management should strengthen its internal controls over payroll charges to federal awards by ensuring consistent adherence to its time and effort certification policies as well as conduct periodic reviews of payroll documentation to verify compliance with established policies and federal requirements. Views of Responsible Officials and Planned Corrective Action: There is no disagreement with the audit finding.

Finding No. 2024-001: Allowable Cost/Activities (Time and effort) Federal Program Title: U.S. Department of Health and Human Services Awards: ALN 93.527 Health Center Program Cluster Criteria: 2 CFR 200.430 established that all salaries and wages charged to Federal awards must be supported by a system of internal controls that provides reasonable assurance that the personnel costs incurred are accurate, allowable, and properly allocated. This includes a system to demonstrate that total compensation paid to individual employees is reasonable according to work performed. Condition: During audit procedures, we tested 40 payroll costs charged to the ALN 93.527 Health Center Program Cluster. Time and effort reporting could not be located for the 7 employees that were charged to Grant H2E for the period September – December 2024 which documented the distribution of the employee’s salary and wages among specific grants by work performed. Cause: The Organization did not follow the policies and procedures in place related to obtaining time and effort certifications from employees. Effect: The federal award may be overcharged or undercharged if actual effort differs from time charged to the award. Questioned Costs: $122,765 Context/Sampling: A sample of 40 payroll transactions were selected for testing. For each transaction, a timecard was obtained for all selected transactions which verified that the employees worked the hours to support the charges to the grant. While all timecards documented total hours worked, none included documentation of the specific time allocated to the federal program. Additionally, time and effort certifications were obtained for 33 of the 40 sampled employees. However, the Organization did not obtain time and effort certifications for the remaining 7 employees whose salaries were charged to the H2E grant. The sample was selected using non-statistical sampling methods and was not intended to be, nor should it be considered, a statistically valid sample. Repeat Finding: No Recommendation: Management should strengthen its internal controls over payroll charges to federal awards by ensuring consistent adherence to its time and effort certification policies as well as conduct periodic reviews of payroll documentation to verify compliance with established policies and federal requirements. Views of Responsible Officials and Planned Corrective Action: There is no disagreement with the audit finding.