Audit 5456

Finding 2022-002 Allowable Cost Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Technical and Nonfinancial Assistance to Health Centers Program Assistance Listing Number: 93.129 Award Period: 7/1/2021 – 6/30/2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: 2 CFR Subpart E Condition: The auditor tested a sample of forty expenditures of which two payroll transactions did not have evidenced of an approved wage rate. Questioned Costs: None Context: Evidence of approval for the basis of a cost reimbursed by the federal award was not maintained. Cause: Internal process and procedures were not followed as required by the Association’s internal control requirements. Effect: Costs reimbursed by the grant were not supported by the proper authorization and approval. Recommendation: The Association should ensure source documentation is maintained for all costs and elements of a cost calculation reimbursed by federal awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding from responsible officials that two out of forty wage rate authorization forms requested were not located. Other documentation was submitted that supported the wage rates, including results of a salary survey performed by an HR consulting company. Actions taken in response to finding: In response to the finding, the Association generated detailed pay rate change history reports from the payroll system for these two employees and took a random sample of pay history for three other employees. Nothing unusual was identifiable. The Association will ensure source documentation is maintained for all federal award cost reimbursements by taking the following actions: -At least two Association leadership staff members will review all payroll changes and save documentation in secure, electronic personnel files and payroll processing files. -An improved human resources information and payroll system with more robust time tracking, reporting and document storage features is being implemented. -Detailed requirements for payroll changes will be added to revised finance and human resources policies and procedures (currently under revision).

Finding 2022-002 Allowable Cost Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Technical and Nonfinancial Assistance to Health Centers Program Assistance Listing Number: 93.129 Award Period: 7/1/2021 – 6/30/2022 Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance Criteria or specific requirement: 2 CFR Subpart E Condition: The auditor tested a sample of forty expenditures of which two payroll transactions did not have evidenced of an approved wage rate. Questioned Costs: None Context: Evidence of approval for the basis of a cost reimbursed by the federal award was not maintained. Cause: Internal process and procedures were not followed as required by the Association’s internal control requirements. Effect: Costs reimbursed by the grant were not supported by the proper authorization and approval. Recommendation: The Association should ensure source documentation is maintained for all costs and elements of a cost calculation reimbursed by federal awards. Views of responsible officials and planned corrective action: There is no disagreement with the audit finding from responsible officials that two out of forty wage rate authorization forms requested were not located. Other documentation was submitted that supported the wage rates, including results of a salary survey performed by an HR consulting company. Actions taken in response to finding: In response to the finding, the Association generated detailed pay rate change history reports from the payroll system for these two employees and took a random sample of pay history for three other employees. Nothing unusual was identifiable. The Association will ensure source documentation is maintained for all federal award cost reimbursements by taking the following actions: -At least two Association leadership staff members will review all payroll changes and save documentation in secure, electronic personnel files and payroll processing files. -An improved human resources information and payroll system with more robust time tracking, reporting and document storage features is being implemented. -Detailed requirements for payroll changes will be added to revised finance and human resources policies and procedures (currently under revision).