Section III - Federal Awards Findings and Questioned Costs
Item 2024-003 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Unaccompanied Alien Children Program (Assistance Listing Number 93.676), FAIN # 90ZU0385, 90ZU0603, 90ZU0567, and 90ZU0536, for FY 2024 - Significant Deficiency
Criteria
Recipients and subrecipients are subject to the procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. The Agency's policy is that all contracts with new vendors shall require the vendor to certify in writing that it has not been suspended or debarred from doing business with a federal agency. Alternatively, they can research potential vendors on the Excluded parties list. For potential new hires, the Agency performs a check to verify that the potential hiree is not debarred by searching SAM.gov and filing this in the employee's personnel file maintained with Human Resources.
Statement of Condition
During our audit, we noted that certain vendors have no record of an exclusion search conducted in fiscal year 2024. There was also one employee for whom there was no record of an exclusion search. None of the employees or vendors tested were debarred or suspended.
Cause
Inconsistent application of the internal control.
Effect
Failure to timely verify that a vendor or employee is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government.
Questioned Costs
None
Context
Five out of six samples of new vendors and one out of five new hires tested did not have support for exclusion searches maintained on file during fiscal year 2024.
Identification as a repeat finding
This is not a repeat finding.
Recommendation
We recommend that the Agency train its personnel in relation to the exclusion screening and proper documentation thereof and that the Agency conduct regular reviews to ensure the completeness of exclusion search documentation.
Management response
As per the Purchasing policy, new vendors are sanctioned by the Purchasing department prior to the creation of a purchase order. Compliance conducts a monthly sanction review of all vendors. We have now conducted sanction checks for the vendors that were previously missed and have reinforced the process to ensure that sanction screenings are performed for all newly added vendors moving forward.
In addition, employees whose salaries are charged to federal grants are also subject to suspension and debarment checks. The Agency ensures to actively conduct these checks in compliance with federal regulations.
Item 2024-004 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles - U.S. Department of Health and Human Services, Unaccompanied Alien Children Program (Assistance Listing Number 93.676), FAIN # 90ZU0385, 90ZU0603, 90ZU0567, and 90ZU0536, for FY 2024 - Significant Deficiency
Criteria
In accordance with 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (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.
Statement of Condition
During our audit, we noted that for one of the employees tested, the percentage of salary allocation per time and effort attestation form did not agree to the salary charged per the general ledger.
Cause
Inconsistent application of the internal control.
Effect
The deficiency in the Agency's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant.
Questioned Costs
None
Context
We selected 25 salary transactions charged to the federal program to test controls over compliance for allowable costs/activities allowed. Out of the 25 transactions tested, we noted one instance where the percentage allocation of salary per time and effort attestation form did not agree to the salary charged per the general ledger.
Identification as a repeat finding
This is not a repeat finding.
Recommendation
We recommend that the Agency strengthen their internal control policies and procedures to ensure that the allocations per the time and effort attestation forms agree with the amount charged to the grant per the general ledger.
Management response
We acknowledge the recommendation and recognize the importance of aligning time and effort attestations with the amounts charged to grants in the general ledger. We ensure that any changes to employee allocations are reflected timely in our payroll and accounting systems to maintain consistency between documentation and financial records. Additionally, we are reviewing our internal controls and procedures to identify any process gaps and reinforce communication between HR, Payroll, and Finance teams. Going forward, we will enhance oversight to ensure that updates related to employee funding sources are promptly recorded, which will help maintain accurate grant reporting and compliance with applicable regulations.
Section III - Federal Awards Findings and Questioned Costs
Item 2024-003 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Unaccompanied Alien Children Program (Assistance Listing Number 93.676), FAIN # 90ZU0385, 90ZU0603, 90ZU0567, and 90ZU0536, for FY 2024 - Significant Deficiency
Criteria
Recipients and subrecipients are subject to the procurement, debarment and suspension regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. The Agency's policy is that all contracts with new vendors shall require the vendor to certify in writing that it has not been suspended or debarred from doing business with a federal agency. Alternatively, they can research potential vendors on the Excluded parties list. For potential new hires, the Agency performs a check to verify that the potential hiree is not debarred by searching SAM.gov and filing this in the employee's personnel file maintained with Human Resources.
Statement of Condition
During our audit, we noted that certain vendors have no record of an exclusion search conducted in fiscal year 2024. There was also one employee for whom there was no record of an exclusion search. None of the employees or vendors tested were debarred or suspended.
Cause
Inconsistent application of the internal control.
Effect
Failure to timely verify that a vendor or employee is not suspended or debarred could result in entering into a contract with an entity that is barred from performing work for the U.S. government.
Questioned Costs
None
Context
Five out of six samples of new vendors and one out of five new hires tested did not have support for exclusion searches maintained on file during fiscal year 2024.
Identification as a repeat finding
This is not a repeat finding.
Recommendation
We recommend that the Agency train its personnel in relation to the exclusion screening and proper documentation thereof and that the Agency conduct regular reviews to ensure the completeness of exclusion search documentation.
Management response
As per the Purchasing policy, new vendors are sanctioned by the Purchasing department prior to the creation of a purchase order. Compliance conducts a monthly sanction review of all vendors. We have now conducted sanction checks for the vendors that were previously missed and have reinforced the process to ensure that sanction screenings are performed for all newly added vendors moving forward.
In addition, employees whose salaries are charged to federal grants are also subject to suspension and debarment checks. The Agency ensures to actively conduct these checks in compliance with federal regulations.
Item 2024-004 - Activities Allowed or Unallowed, Allowable Costs/Cost Principles - U.S. Department of Health and Human Services, Unaccompanied Alien Children Program (Assistance Listing Number 93.676), FAIN # 90ZU0385, 90ZU0603, 90ZU0567, and 90ZU0536, for FY 2024 - Significant Deficiency
Criteria
In accordance with 2 CFR, Part 200.430(i)(1) of the Office of Management and Budget's Uniform Guidance, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, which must, among other things: (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.
Statement of Condition
During our audit, we noted that for one of the employees tested, the percentage of salary allocation per time and effort attestation form did not agree to the salary charged per the general ledger.
Cause
Inconsistent application of the internal control.
Effect
The deficiency in the Agency's controls over compliance with activities allowed or unallowed, and allowable cost/cost principles could result in unallowed payroll costs being charged to the grant.
Questioned Costs
None
Context
We selected 25 salary transactions charged to the federal program to test controls over compliance for allowable costs/activities allowed. Out of the 25 transactions tested, we noted one instance where the percentage allocation of salary per time and effort attestation form did not agree to the salary charged per the general ledger.
Identification as a repeat finding
This is not a repeat finding.
Recommendation
We recommend that the Agency strengthen their internal control policies and procedures to ensure that the allocations per the time and effort attestation forms agree with the amount charged to the grant per the general ledger.
Management response
We acknowledge the recommendation and recognize the importance of aligning time and effort attestations with the amounts charged to grants in the general ledger. We ensure that any changes to employee allocations are reflected timely in our payroll and accounting systems to maintain consistency between documentation and financial records. Additionally, we are reviewing our internal controls and procedures to identify any process gaps and reinforce communication between HR, Payroll, and Finance teams. Going forward, we will enhance oversight to ensure that updates related to employee funding sources are promptly recorded, which will help maintain accurate grant reporting and compliance with applicable regulations.