Audit 369727

2024 – 003 Internal Control over Payroll Expenditures Federal Agency: Health Resources and Services Administration Federal Program Name: Advance Nursing Education Assistance Listing Number: 93.247 Federal Award Identification Number and Year: T5949632 2024 Award Period: 08/01/2023 – 7/31/2027 Question Costs: None Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Payroll expenditures charged to the grant did not agree to amounts reported on the time cards for 5 of the 40 payroll transactions selected for testing. Additionally, payroll expense for a new employee hired during the year was charged to the grant for a pay period prior to the employee's start date. Criteria or specific requirement: Total salaries charged to Federal awards (including extra service pay) are subject to the Standards of Documentation as described by 2 CFR §200.430(i). Per this section, salaries and wages charged to Federal awards must be based on records that accurately reflect the work performed. These records must:  Be incorporated into the organization’s official records;  Reasonably reflect the total activity for which the employee is compensating across all grant related and non-grant related activities (100% effort);  Support the distribution of employee salary across multiple activities or cost objectives (for example, effort spent on multiple federal awards, spent on general/or administrative activities, vacation, sick leave, leave without pay, etc.);  Utilize an "after-the-fact" review of the employees’ actual hours worked during the reporting period for identifying and correcting significant changes (as defined by the organization’s written policies). Effect: Lack of appropriate “after-the-fact” review and documentation resulted in incomplete support for the grant expenditures at a point in time but not in aggregate and increases the risk of payroll errors, noncompliance with federal cost principles, and misallocation of federal funds. Cause: Controls were not operating effectively to ensure review, identification, and correction of identified errors are completed prior to the drawdown process. Repeat Finding: No. Recommendation: CLA recommends that the Clinic implement a process for monitoring and review of all expenditures reimbursed by federal awards. CLA also recommends a more robust process to track, record, and document time and effort on an employee basis for amounts that are to be reimbursed by federal awards. Views of responsible officials and planned corrective actions: With the addition of personnel, the finance team has been restructured to allow for a more streamlined month-end of process. As part of the month-end process we have implemented more collaborative and robust communication between the grants management and finance teams to ensure accuracy in our grant management process.