Finding 2022-004: Salaries and Wages (Allowable Costs)
Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages
must be based on records that accurately reflect the work performed. These records must:
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, not exceeding 100% of compensated activities;
iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an
integrated basis, but may include the use of subsidiary records as defined in the non-Federal
entity’s written policy;
v. Comply with the established accounting policies and practices of the non-Federal entity;
vi. [Reserved]
vii. Support the distribution of the employee’s salary or wages among specific activities or cost
objectives if the employee works on more than one Federal award; a Federal award and non-
Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities
which are allocated using different allocation bases; or an unallowable activity and a direct or
indirect cost activity.
viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not
qualify as support for charges to Federal awards.”
Condition: During our testwork, we determined that SAMU did not adequately document employee
time spent on the Federal program versus other programs. In addition, we noted one instance in which
an employee offer letter was not available for examination.
Cause: SAMU does not require that all employees complete timesheets documenting time spent on
the Federal award versus other awards. Additionally, SAMU does not have effective internal controls in
place to ensure that employee salary documentation is retained.
Effect or Potential Effect: SAMU could inadvertently charge time to the Federal award that was not
truly spent working on the Federal award. This could result in the Federal Government over-paying for
salaries associated with the award.
Questioned Costs: Indeterminable.
Context: We noted that employees selected for testing did not have completed, detailed timesheets to
indicate time spent on the Federal award versus other programs. We also noted instances in which an
employee offer letter and employee transition letter were not available for examination.
Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that SAMU implement formal time tracking policies to require all
employees to complete a detailed timesheet in order to track actual time spent on various programs.
All timesheets should have evidence of both employee and supervisory approval. Additionally, we
recommend that SAMU ensure all salary records for employees are retained.
Finding 2022-005: Cash Management and Reporting
Criteria: Under 2 CFR 200.303, organizations that receive federal funding are required to “establish
and maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: No evidence of independent secondary level of review or approval is performed relating to
program reports; additionally, no evidence of review/approval for financial reports or reimbursement
request could be provided. While management asserts that a review and approval of program
reporting, financial reporting and reimbursement requests is taking place, there is no audit trail that
shows the evidence of the control occurring.
Cause: Management did not have effective internal controls in place to ensure that a secondary level
of review of approval is clearly documented, which indicates who performed the control, and when the
control was performed.
Effect or Potential Effect: Without established controls over reporting and reimbursement requests,
there is a reasonable possibility that SAMU would not detect noncompliance in the normal course of
performing duties and correct them in a timely manner.
Questioned Costs: None.
Context: Our audit procedures consisted of testwork performed over cash receipts and draw down
requests from the Federal Government as well as program reports submitted. We consider our sample
to be representative of the population. The condition appears to be systemic in nature.
Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management of SAMU implement procedures and control
processes to incorporate and document an independent review and approval, evidenced by a
signature/initialing and date of the review and approval taking place prior to submission to the funder.
Finding 2022-006: Procurement
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are not
necessarily limited to, the following: Rationale for the method of procurement, selection of contract
type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II
Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition
of property or services required under a Federal award must be conducted in a manner providing full
and open competition consistent with the standards of this section and §200.320. The non-Federal
entity must have written procedures for procurement transactions.
These procedures must ensure that all solicitations incorporate a clear and accurate description of the
technical requirements for the material, product, or service to be procured. Such description must not,
in competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are
specific circumstances in which noncompetitive procurement can be used. Noncompetitive
procurement can only be awarded if one or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the
micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that SAMU did not clearly document
the rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. In addition, we noted that vendors did not always have a
signed contract in place to outline the price and nature of services to be provided to SAMU.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in
the Criteria section above, as well as SAMU's internal procurement policy.
Questioned Costs: None.
Context: We noted that items selected for testing did not document the rationale for the method of
procurement, selection of contract type, contractor selection or rejection, and the basis for the contract
price. In addition, there were instances in which vendors selected for testing did not have a signed
contract in place with SAMU.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend SAMU retain sufficient procurement documentation to meet the
requirements noted in the Criteria section above.
Finding 2022-007: Suspension and Debarment
Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These
regulations restrict awards, subawards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or
activities. The non-Federal entity must verify that the person with whom you intend to do business is
not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that
person; or (c) Adding a clause or condition to the covered transaction with that person.
Condition: During our testing over Suspension and Debarment, we determined that SAMU did not
perform screenings on potential or current vendors, suppliers, contractors or employees that were paid
with Federal funds. Cause: SAMU does not have a formal internal policy with respect to screening vendors, suppliers,
contractors and employees in order to adhere to compliance over suspension and debarment.
Effect or Potential Effect: Failure to screen potential and current vendors, suppliers, contractors and
employees increases the potential that Federal funds be inadvertently provided to parties deemed to
be suspended or disbarred by the United States Government.
Questioned Costs: None.
Context: We noted that vendors, suppliers, contractors and employees selected for testing did not
have a formally documented Suspension and Debarment check conducted prior to engagement.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend that management develop and implement a formal policy on
suspension and debarment. This policy should include a threshold for when vendors, suppliers,
contractors and employees should be screened. All screenings should be conducted prior to signing a
contract or issuing payment. We recommend that SAMU notify all employees of this policy and ensure
that it is enforced during the upcoming fiscal year.
Finding 2022-004: Salaries and Wages (Allowable Costs)
Criteria: According to 2 CFR Section 200.430(i) charges to Federal awards for salaries and wages
must be based on records that accurately reflect the work performed. These records must:
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, not exceeding 100% of compensated activities;
iv. Encompass federally-assisted and all other activities compensated by the non-Federal entity on an
integrated basis, but may include the use of subsidiary records as defined in the non-Federal
entity’s written policy;
v. Comply with the established accounting policies and practices of the non-Federal entity;
vi. [Reserved]
vii. Support the distribution of the employee’s salary or wages among specific activities or cost
objectives if the employee works on more than one Federal award; a Federal award and non-
Federal award; an indirect cost activity and a direct cost activity; two or more indirect activities
which are allocated using different allocation bases; or an unallowable activity and a direct or
indirect cost activity.
viii. Budget estimates (i.e., estimates determined before the services are performed) alone do not
qualify as support for charges to Federal awards.”
Condition: During our testwork, we determined that SAMU did not adequately document employee
time spent on the Federal program versus other programs. In addition, we noted one instance in which
an employee offer letter was not available for examination.
Cause: SAMU does not require that all employees complete timesheets documenting time spent on
the Federal award versus other awards. Additionally, SAMU does not have effective internal controls in
place to ensure that employee salary documentation is retained.
Effect or Potential Effect: SAMU could inadvertently charge time to the Federal award that was not
truly spent working on the Federal award. This could result in the Federal Government over-paying for
salaries associated with the award.
Questioned Costs: Indeterminable.
Context: We noted that employees selected for testing did not have completed, detailed timesheets to
indicate time spent on the Federal award versus other programs. We also noted instances in which an
employee offer letter and employee transition letter were not available for examination.
Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that SAMU implement formal time tracking policies to require all
employees to complete a detailed timesheet in order to track actual time spent on various programs.
All timesheets should have evidence of both employee and supervisory approval. Additionally, we
recommend that SAMU ensure all salary records for employees are retained.
Finding 2022-005: Cash Management and Reporting
Criteria: Under 2 CFR 200.303, organizations that receive federal funding are required to “establish
and maintain effective internal control over the Federal award that provides reasonable assurance that
the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations,
and the terms and conditions of the Federal award. These internal controls should be in compliance
with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller
General of the United States or the “Internal Control Integrated Framework”, issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: No evidence of independent secondary level of review or approval is performed relating to
program reports; additionally, no evidence of review/approval for financial reports or reimbursement
request could be provided. While management asserts that a review and approval of program
reporting, financial reporting and reimbursement requests is taking place, there is no audit trail that
shows the evidence of the control occurring.
Cause: Management did not have effective internal controls in place to ensure that a secondary level
of review of approval is clearly documented, which indicates who performed the control, and when the
control was performed.
Effect or Potential Effect: Without established controls over reporting and reimbursement requests,
there is a reasonable possibility that SAMU would not detect noncompliance in the normal course of
performing duties and correct them in a timely manner.
Questioned Costs: None.
Context: Our audit procedures consisted of testwork performed over cash receipts and draw down
requests from the Federal Government as well as program reports submitted. We consider our sample
to be representative of the population. The condition appears to be systemic in nature.
Identification as a Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that management of SAMU implement procedures and control
processes to incorporate and document an independent review and approval, evidenced by a
signature/initialing and date of the review and approval taking place prior to submission to the funder.
Finding 2022-006: Procurement
Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain
effective internal control over the Federal award that provides reasonable assurance that the non-
Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the
terms and conditions of the Federal award. These internal controls should be in compliance with
guidance in Standards for Internal Control in the Federal Government issued by the Comptroller
General of the United States or the internal Control Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
Additionally, according to 2 CFR §200.318 Procurement standards, the non-Federal entity must
maintain records sufficient to detail the history of procurement. These records will include, but are not
necessarily limited to, the following: Rationale for the method of procurement, selection of contract
type, contractor selection or rejection, and the basis for the contract price. Title 2, Subtitle A Chapter II
Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition
of property or services required under a Federal award must be conducted in a manner providing full
and open competition consistent with the standards of this section and §200.320. The non-Federal
entity must have written procedures for procurement transactions.
These procedures must ensure that all solicitations incorporate a clear and accurate description of the
technical requirements for the material, product, or service to be procured. Such description must not,
in competitive procurements, contain features which unduly restrict competition. The description may
include a statement of the qualitative nature of the material, product or service to be procured and,
when necessary, must set forth those minimum essential characteristics and standards to which it
must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in
accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are
specific circumstances in which noncompetitive procurement can be used. Noncompetitive
procurement can only be awarded if one or more of the following circumstances apply:
1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the
micro-purchase threshold (see paragraph (a)(1) of this section);
2. The item is available only from a single source;
3. The public exigency or emergency for the requirement will not permit a delay resulting from
publicizing a competitive solicitation;
4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive
procurement in response to a written request from the non-Federal entity; or
5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that SAMU did not clearly document
the rationale for the method of procurement, selection of contract type, contractor selection or
rejection, and the basis for the contract price. In addition, we noted that vendors did not always have a
signed contract in place to outline the price and nature of services to be provided to SAMU.
Cause: Management did not have effective internal controls in place to ensure that procurement
requirements were adequately documented and retained.
Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in
the Criteria section above, as well as SAMU's internal procurement policy.
Questioned Costs: None.
Context: We noted that items selected for testing did not document the rationale for the method of
procurement, selection of contract type, contractor selection or rejection, and the basis for the contract
price. In addition, there were instances in which vendors selected for testing did not have a signed
contract in place with SAMU.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend SAMU retain sufficient procurement documentation to meet the
requirements noted in the Criteria section above.
Finding 2022-007: Suspension and Debarment
Criteria: Under 2 CFR §200.213, Non-Federal entities are subject to the non-procurement debarment
and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. These
regulations restrict awards, subawards, and contracts with certain parties that are debarred,
suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or
activities. The non-Federal entity must verify that the person with whom you intend to do business is
not excluded or disqualified, by (a) Checking SAM Exclusions; or (b) Collecting a certification from that
person; or (c) Adding a clause or condition to the covered transaction with that person.
Condition: During our testing over Suspension and Debarment, we determined that SAMU did not
perform screenings on potential or current vendors, suppliers, contractors or employees that were paid
with Federal funds. Cause: SAMU does not have a formal internal policy with respect to screening vendors, suppliers,
contractors and employees in order to adhere to compliance over suspension and debarment.
Effect or Potential Effect: Failure to screen potential and current vendors, suppliers, contractors and
employees increases the potential that Federal funds be inadvertently provided to parties deemed to
be suspended or disbarred by the United States Government.
Questioned Costs: None.
Context: We noted that vendors, suppliers, contractors and employees selected for testing did not
have a formally documented Suspension and Debarment check conducted prior to engagement.
Identification as a Repeat Finding, if Applicable: Not applicable.
Recommendation: We recommend that management develop and implement a formal policy on
suspension and debarment. This policy should include a threshold for when vendors, suppliers,
contractors and employees should be screened. All screenings should be conducted prior to signing a
contract or issuing payment. We recommend that SAMU notify all employees of this policy and ensure
that it is enforced during the upcoming fiscal year.