Audit 412852

SIGNIFICANT DEFICIENCY U.S. Department of Health And Human Services, ALN 93.493 Congressional Directives, Grant# 1H79FG001321-01; Grant period - September 30, 2024 to September 29, 2025; Pass-through: Substance Abuse and Mental Health Services Administration; Applicable compliance component: Allowable Costs/Cost Principles Finding 2025-001 – HopeSparks did not have adequate internal controls to ensure personnel costs charged to the federal program are supported with records that reflect personnel activity in accordance with federal requirements. Criteria: 2 CFR § 200.430 require grantees to support charges to federal awards for salaries and wages with records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated, be incorporated into the official records of the recipient or sub-recipient, reasonably reflect the total activity for which the employee is compensated by the recipient or sub-recipient, encompass federally assisted and all other activities compensated by the recipient or sub-recipient, comply with the established accounting policies and procedures of the recipient or sub-recipient, and support the distribution of the employee’s salary or wages among specific activities or cost objectives. Budget estimates alone do not qualify as support for charges to federal awards, but may be used for interim purposes. If the records do not meet the standards described, personnel activity reports may be required, including prescribed certifications, or equivalent documentation supporting the records. Condition: HopeSparks had no regular monitoring procedures to ensure personnel cost charged to the federal program are supported with documentation of the work performed. As a result, certifications were obtained seven (7) months after the close-out period. Cause: HopeSparks did not implement periodic monitoring procedures to ensure payroll expenses charged to the federal award is supported as required on a timely basis. Effect or potential effect: Without monitoring internal controls to support compliance, HopeSparks risks noncompliance to the terms and conditions of the Congressional Directives grant. A grantor may take actions for noncompliance including withholding funds, disallowance of costs, suspension and debarment, terminating the award, and denial of future funding. Identification of a repeat finding: Not a repeat finding Known questioned cost amount: None Recommendation: Implement procedures for regular monitoring of personnel activities and evaluation of work performed as it relates to personnel cost charged to a federal sponsored program. Views of responsible officials and planned corrective actions: HopeSparks acknowledges the auditor's finding that certifications of personnel activity for staff whose compensation was charged in whole or in part to the federal award were not completed on a periodic basis during the grant period, as required by 2 CFR 200.430. Going forward, HopeSparks will establish a periodic, contemporaneous certification process for personnel whose compensation is charged to federal awards, with implementation details to be finalized and incorporated into HopeSparks' written policies and procedures.