Audit 405801

Finding 2025-002: Time Allocations 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 prior to December 2024 to programs which did not accurately represent the time worked. 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. Cause: The review of the payroll allocation entry and process was not sufficient to catch errors or differences from the timesheets completed by staff. Effect or Potential Effect: HIPS could inadvertently mischarge salaries and wages to its various programs. Questioned Costs: None. Context: Although the majority of payroll allocations were supported by appropriate documentation, these six exceptions suggest a need for improved controls over time and effort reporting to prevent isolated errors from becoming more systemic issues. We did note that new procedures implemented by management after December 2024 resulted in no payroll allocation variances after that period. Identification as a Repeat Finding, if Applicable: Yes (2024-004) 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.

Finding 2025-003: Financial 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 reporting requirements. Condition: We noted certain financial reports did not have timely submissions of required reports on the awards under audit.Cause: Reporting deadlines 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. Report 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 submitted to. Effect or Potential Effect: Noncompliance with financial 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, 2025. Identification as a Repeat Finding, if Applicable: Yes (2024-005) Recommendation: HIPS should implement a system to track and ensure the timely submission of all financial 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 to ensure accurate and timely reporting. Submission of reports should be retained internally for documentation purposes.