Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Criteria -Provider Relief Funds (PRF) provide relief funds to eligible providers of health care services and support for health care related expenses or lost revenues attributable to coronavirus. In accordance with 2 CFR 200.403, costs must be adequately documented as well as necessary and reasonable for the performance of the federal award. Per 2 CFR 200.303, a non-Federal entity must 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. Condition and Context -KPMG identified 7 of 40 contract labor samples where the pay rate used in submitting allowable expenditures under the grant exceeded the amount actually paid to the contract labor company. The value of the errors was $844 and the value of the samples tested was $46,240. Possible Cause and Effect- .In reporting expenses under the grant, BayCare utilized internally generated time reports to identify qualified individuals for reimbursement. Such individuals were contractor laborers who were actually paid by a third party. BayCare tracked contract labor time in its time keeping system and then submitted the hours worked to the contract labor companies to pay the individuals. BayCare was subsequently invoiced for reimbursement of such labor costs. Due to constantly fluctuating market conditions, pay rates for contract labor were changing frequently which resulted in differences between the BayCare time keeper system and the third party invoice. While BayCare performed a review to ensure all expenditures submitted under the grant were allowable, such review relied on the accuracy of the underlying information from its time system. Although the amount of hours being billed by the contract labor firm were reviewed by BayCare, there is a missing control related to reviewing the accuracy of the pay rate. The effect is that potentially unallowable costs are submitted to the granting agency. Questioned Costs -Known questioned costs of $844. Statistically Valid Sample -The sample was not intended to be, and was not, a statistically valid sample. Repeat of Prior Finding- Yes, repeat of prior year finding 2021-002. Recommendations -BayCare should reconcile its contract labor invoices received from third parties to the internal time reports used as a basis for submitting allowable costs under the terms of the grant. Alternatively, BayCare should consider using invoice level reports to ensure the amounts included for reimbursement match the expenditures actually incurred. View of Responsible Official - Management agrees with the noted finding.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-002 Criteria or Specific Requirement: The Code of Federal Regulations Section 200 subpart E outlines the allowability of cost provisions, including indirect costs. Specifically, 2 CFR 200.403(d) states that costs should be accorded consistent treatment to be allowable, and 200.405 defines allocable costs. Condition: During our review of allowable expenses, it was noted that indirect costs were based on the grant budget and not supported by an indirect cost pool. Cause: The Organization has not implemented a cost allocation policy to track indirect costs. Effect or Potential Effect: Indirect expenses were charged to grants and allowability was unable to be determined. Questioned Costs: $40,242. Context: All cost charged as indirect cost to the research and development cluster were based on the grant budget and not supported by allocable costs. Repeat Finding: No Recommendation: We recommend the Organization implement methodology to track overhead expenses, pool them, and allocate to each grant using a reasonable basis for allocation. Views of responsible officials: Management agrees with the finding and will implement a process to pool its overhead costs and allocate them accordingly.
Finding 2022-003: Reportable Finding Considered a Significant Deficiency ? Disbursement cutoff Program Name: Market Access Plan Assistance listing #: 10.601 Federal Awarding Agency: U.S. Department of Agriculture Award Number: 12-4336-0-3-999 Compliance Requirement: Allowable Costs/Principles Criteria: According to 2 CFR 200.403, costs must meet a set of criteria in order to be allowable under the federal award, including being determined in accordance with generally accepted accounting principles (GAAP). According to GAAP, expenses must be recognized in the period incurred. Condition: During our testing of allowable cost principles compliance, out of 40 selections, we noted one that was partially expensed in the incorrect year. Cause: The invoice for this selection included services performed in both fiscal year 2022 and 2023, but the entire invoice balance was expensed in 2022. Effect: The auditee was not in compliance with allowable cost principles outlined in of 2 CFR 200.403 resulting in program expenses being recognized in the incorrect year. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization adopt procedures for more detailed review of invoices prior to recognizing expenses. Invoices should be reviewed in detail to determine when the services were performed to therefore recognize the expense appropriately, rather than recognizing invoices upon receipt or upon payment. Views of Responsible Officials and Corrective Action Plan (unaudited): See corrective action plan.
Criteria or specific requirement: A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity (2 CFR sections 200.308, 200.309, and 200.403(h)). A period of performance may contain one or more budget periods. Condition: We identified two instances in which expenses charged to the grant were outside of the period of performance. Context: We selected 30 items from the entire Continuum of Care expenditure population for the year ended December 31, 2022. Of the 30 items selected for testing, two items were identified in which the underlying charge occurred prior to the period of performance. Effect: Amounts were inappropriately charged to the grant. Questioned costs: Amounts incorrectly charged to the grant totaled $32.27, less than the questioned costs threshold of $25,000. Cause: For one of the transactions that was identified that had been charged outside the period of performance, the employee responsible for entering the expense and determining whether it should be included or excluded from the grant reimbursement request was later placed on a performance improvement plan due to errors in data entry. For both transactions, as of December 31, 2022, the grant award had not been closed out, and therefore had not yet been subject to the Organization?s control to review expenses charged in detail and remove those outside of the period of performance. Repeat finding: No. Recommendation: We recommend more training be provided to employees responsible for reviewing grant expenses as well as over the various compliance requirements to ensure expenses are only charged when within the period of performance. We further recommend management tighten up the review process to ensure expenses that are outside the period of performance are noted at the time of the initial review. Views of responsible officials and planned corrective actions: Contracts charged for expenses outside of the period of performance have been credited for ineligible expenses. Share has provided additional training to accounting staff about the allowability of expenses being based on both contract criteria and the period of performance. Additionally, training was provided on key identifiers that could flag an exception in allowability based on period of performance, and how to catch this in the review of expenses. Additionally, training was provided on general ledgers transactions that require further review for period of performance allowability during monthly review of expenses prior to preparing invoices. Training included this being a specific area of focus for review during periods when a contract terms and a new contract starts. This training will be provided to all new accounting staff and will be incorporated as refresher trainings if upon review contract and grant administrator expense reviews identify this as being a continued issue by staff performing expense data entry.
2022-002: Significant Deficiency Emergency Solutions Grant Program ? 14.231 ? Allowable Costs / Activities Criteria The ?Basic Guidelines? section of 2 CFR Part 200, Subpart E Section 200.403, requires charges to federal awards to be necessary and reasonable for the performance of the federal award and be allocable thereto under these principles. Condition The Organization paid more than the invoice amount for one transaction. Cause The Organization did not have sufficient procedures in place to ensure that only necessary and reasonable costs were charged to this program. Effect The Organization charged costs to this federal program that were not necessary and reasonable for this federal program. Questioned Costs $4,532 Context A sample of 5 transactions were selected for testing this federal program to determine if the finding issued in the prior year has been resolved. For one transaction tested, the amount paid exceeded the invoice amount due to oversight. Repeat Finding Yes Recommendation The Organization should implement procedures to ensure that only necessary, reasonable costs and incurred costs are charged to the program. Views of Responsible Officials and Planned Corrective Actions The Organization agrees with the recommendation and will implement immediately.
2022-002 Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2889, 2022 Compliance Requirement Affected: Allowable Costs and Allowable Activities Award Period: Year Ended December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: According to Uniform Guidance 2 CFR 200.403, costs reported under one federal program should not be included as a cost of any other federally financed program in either the current or a prior period. Condition: Federal expenditures were reported under two federal grant programs. Questioned Costs: $385,015 Context: During our testing, it was noted that there were costs reported under the SLFRF grant that were also being reported under other federally funded human service programs. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: Lack of oversight by management. Effect: Ineligible costs are being reported on the Schedule of Expenditures of Federal Awards. Repeat Finding: No. Recommendation: We recommend that the County include consideration of any expenditures that may be part of other federal programs as part of their review. Views of responsible officials: There is no disagreement with the audit finding.
2022-002 Federal Agency: U.S. Department of the Treasury Federal Program Name: COVID-19 Coronavirus State and Local Fiscal Recovery Funds (SLFRF) Assistance Listing Number: 21.027 Federal Award Identification Number and Year: SLFRP2889, 2022 Compliance Requirement Affected: Allowable Costs and Allowable Activities Award Period: Year Ended December 31, 2022 Type of Finding: Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria or Specific Requirement: According to Uniform Guidance 2 CFR 200.403, costs reported under one federal program should not be included as a cost of any other federally financed program in either the current or a prior period. Condition: Federal expenditures were reported under two federal grant programs. Questioned Costs: $385,015 Context: During our testing, it was noted that there were costs reported under the SLFRF grant that were also being reported under other federally funded human service programs. The sample size was based on guidance from chapter 11 of the AICPA Audit Guide, Government Auditing Standards and Single Audits. Cause: Lack of oversight by management. Effect: Ineligible costs are being reported on the Schedule of Expenditures of Federal Awards. Repeat Finding: No. Recommendation: We recommend that the County include consideration of any expenditures that may be part of other federal programs as part of their review. Views of responsible officials: There is no disagreement with the audit finding.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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). 2 CFR, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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). 2 CFR, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Finding 2022-001: Internal control deficiency and noncompliance over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions related to amounts reimbursed for the project worksheet. Identification of the federal program: Assistance Listing Number 97.036: ? COVID-19 ? Disaster Grants ? Public Assistance (Presidentially Declared Disasters) ? U.S. Department of Homeland Security ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) ? Federal award year ? January 20, 2020 to July 1, 2022 ? Pass-through entity ? California Governor?s Office of Emergency Services Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 ? Internal controls. 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). 2 CFR, Part 200, Section 200.84 ? Questioned costs states a questioned cost as either (a) which resulted from a violation or possible violation of a statute, regulation, or the terms and conditions of a Federal award, including for funds used to match Federal funds; (b) where the costs, at the time of the audit, are not supported by adequate documentation; or (c) where the costs incurred appear unreasonable and do not reflect the actions a prudent person would take in the circumstances. 2 CFR, Part 200, Section 200.403 ? Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: ? (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles ? (g) Be adequately documented The Office of Management and Budget Compliance Supplement states the Federal Emergency Management Agency (FEMA) evaluates the eligibility of all costs claimed by the applicant. Not all costs incurred as a result of the incident are eligible. Costs must be: ? Directly tied to the performance of eligible work ? Adequately documented ? Reduced by all applicable credits ? Authorized and not prohibited under federal, state, territorial, tribal, or local government laws or regulations ? Consistent with applicant?s internal policies, regulations, and procedures that apply uniformly to both federal awards and other activities of the applicant ? Necessary and reasonable to accomplish the work properly and efficiently The Office of Management and Budget Compliance Supplement states the entity is required to certify that reported costs were incurred in performance of eligible work, that the approved work was completed, that the project is in compliance with the provisions of the FEMA-State Agreement, all grant conditions were met, and that payments for that project were made in accordance with the applicable payment provisions. Condition: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we observed management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were actual paid expenditures. This resulted in an overstatement of the amount reimbursed by FEMA. Cause: Management did not have effective internal controls in place to ensure expenditures reported for reimbursement in the FEMA project worksheet were based on actual paid expenditures. Effect or potential effect: Management was reimbursed by FEMA for expenditures that were not based on the final paid expenditure. Questioned costs: $904,020 ? Assistance Listing Number 97.036 ? Federal award identification number: o Application title ? 549687 ? Sutter Health Materials Northern California o Application number ? PA-09-CA-4482-PW-01727(0) The questioned costs were computed by calculating the difference between the expenditures submitted to FEMA in the amount of $70,825,974 and the actual paid expenditures in the amount of $69,921,954 resulting in $904,020. Context: During our testing over activities allowed or unallowed, allowable costs/cost principles, period of performance, and special tests and provisions, we obtained a listing of expenditures submitted for reimbursement to FEMA for the tested project worksheet and observed 561,641 expenditures in the listing for a total value of $70,825,974. We selected a sample of 40 for testing over activities allowed or unallowed and allowable costs/cost principals, a sample of 80 for testing over period of performance, and 1 project worksheet for testing over all compliance requirements. There were 12 out of 120 selections where the expenditures submitted to FEMA were not based on the actual paid expenditures. Management performed an analysis of all expenditures submitted to FEMA and determined the actual paid expenditures amounted to $69,921,954 compared to the expenditures submitted to FEMA in the amount of $70,825,974 resulting in an overstatement of the amount reimbursed by FEMA of $904,020. Management?s control regarding the review of the project worksheet did not identify these expenditures that were not based on actual paid expenditures. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement effective internal controls to ensure expenditures reported for reimbursement in FEMA project worksheets are based on actual paid expenditures. Management should refund the questioned costs to FEMA and work with FEMA to determine the extent of additional courses of action. Management should ensure this is performed through the closeout process of the project worksheet with FEMA. Views of responsible officials: Management will develop and implement an additional layer of review in future FEMA project worksheet submissions to ensure expenditures reported for reimbursement are based on actual paid expenditures. Management will work with FEMA to refund the total overpayment of $904,020 and discuss the extent of additional courses of action. Management will ensure this is performed through the closeout process of the project worksheet with FEMA.
Unallowable Costs Significant Deficiency U.S. SMALL BUSINESS ASSOCIATION (SBA) ALN #: 59.077 Federal Award Identification #: COVID-19 Community Navigator Pilot Program (SBAHQ22CNP0036) Condition: The Organization charged and was reimbursed for grant expenses that were not paid. There also is not a clear trail from source document to expenditures charged to the federal grant. Criteria: CFR 200.302, 200.403 Questioned Costs: $17,984 Context: Out of $253,139 of non-payroll expenses charged to the grant and reimbursed, $17,984 was not yet paid to program beneficiaries. Cause: Financial management system is not adequate to track grant funds and expenses from source document to grant reimbursement. Effect: Potential for over charging the grant for expenses not allocable to the program or charging the same expense to multiple funding sources. Identification as repeat finding, if applicable: Not Applicable Recommendation: We recommend that the Organization track grant funds through a general ledger project designation to provide an audit trail from source document to grant revenue and allowable grant expenditures. We also recommend that the program beneficiaries be paid or the funds reimbursed be returned to the SBA. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Finding 2022-003 ? Allowable Costs (Significant Deficiency and Non-compliance) Information on the Federal Program: US Department of Treasury Coronavirus State and Local Fiscal Recovery Funds (ARPA) Assistance Listing No. 21.027 and US Department of Treasury Emergency Rental Assistance Program (ERA) Assistance Listing No. 21.023 Criteria: 2 CFR 200.403 establishes factors affecting allowability of costs. This includes costs being adequately documented. Condition/Context: During our ARPA testing, we selected 25 non-payroll disbursements. Of those 25, 18 disbursements were for client assistance. Of those 18, three disbursement amounts did not agree to the amounts in the supporting documentation. During our ERA testing, we selected 15 payroll disbursements where all or part of the employee?s pay was allocated to the program. Of the 15, two amounts allocated did not agree to the supporting documentation. Cause: The client assistance payments made with ARPA funds are to be calculated based on past due rent plus one additional month of rent. The amounts paid on behalf of the client did not agree to the amounts in the supporting documentation. In one instance the renter was paid more than the supporting documentation indicated they were eligible for and two instances the renter was paid less. Employee time was allocated 100% to the ERA program but the timesheets for these pay periods reflected time for other programs in addition to ERA, so the total pay amount should not have been charged to ERA. In addition, one of the pay periods used to calculate the reimbursement amount was more than the employee was actually paid that period. Effect: LSA is not in compliance with allowable cost documentation requirements. Questioned Costs: None reported Recommendation: We recommend LSA strengthen its policies and procedures surrounding the process of calculating assistance payments to ensure accurate amounts are disbursed and LSA is in compliance with all required documentation and disclosure requirements. Views of Responsible Officials: See Management?s View and Corrective Action Plan included at the end of the report.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.431 - Compensation - Fringe Benefits: ?The cost of fringe benefits in the form of employer contributions or expenses for social security; employee life, health, unemployment, and worker's compensation insurance (except as indicated in ? 200.447); pension plan costs (see paragraph (i) of this section); and other similar benefits are allowable, provided such benefits are granted under established written policies. Such benefits, must be allocated to Federal awards and all other activities in a manner consistent with the pattern of benefits attributable to the individuals or group(s) of employees whose salaries and wages are chargeable to such Federal awards and other activities, and charged as direct or indirect costs in accordance with the non-Federal entity's accounting practices.? Per 2 CFR Section 200.430 - Compensation ? Personnel Services: ?Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (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, but may be used for interim accounting purposes, provided that: a. The system for establishing the estimates produces reasonable approximations of the activity actually performed. b. Significant changes in the corresponding work activity (as defined by the non-Federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and c. The non-Federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? In addition, per 2 CFR Section 200.403 regarding all direct costs: ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. (b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. (c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. (d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. (e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. (f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period. (g) Be adequately documented.? Condition: We noted that Safe & Sound allocated fringe benefits during 2022 based on a flat percentage of salaries charged to the grant based on a methodology determined during the budget making process. The methodology was isolated to charges of fringe benefits. In addition, shared costs (e.g., insurance and occupancy) during 2022 were charged on a monthly basis as one twelfth of the total budgeted amount for the year. The methodology was isolated to certain shared costs. Safe & Sound does not have a process in place to true-up certain costs charged based on budget during interim periods to actual amounts. Context: Total fringe benefits charged to the grant were $38,534. Total shared costs charged to the grant were $16,536. Cause: Safe & Sound did not have policies and procedures in place to review and reconcile the budgeted amounts of fringe benefits or shared costs charged to the actual expenditures incurred. Effect or Potential Effect: Without adequate controls in place to ensure costs based on budgeted totals are reasonable and reconcile to the actual time spent on the program, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement. Safe & Sound is entitled to under the terms of the grant. Questioned Costs: $55,070 Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound implement policies and procedures to review for any necessary budget to actual adjustments, and we recommend that sufficient documentation be maintained to support any adjustments made as required by 2 CFR 200.430. In addition, we recommend training be provided to staff on requirements of their federal grants. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to ensure a true up between budget and actual is completed and ensure all actuals are properly supported.
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.110 Program: Maternal and Child Health Federal Consolidated Programs Pass-Through Entity Identifying Numbers: N/A Criteria: The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR Section 200.414: ?In addition to the procedures outlined in the appendices in paragraph (e) of this section, any non-Federal entity that does not have a current negotiated (including provisional) rate, except for those non-Federal entities described in appendix VII to this part, paragraph D.1.b, may elect to charge a de minimis rate of 10% of modified total direct costs (MTDC) which may be used indefinitely. No documentation is required to justify the 10% de minimis indirect cost rate. As described in ? 200.403, costs must be consistently charged as either indirect or direct costs, but may not be double charged or inconsistently charged as both. If chosen, this methodology once elected must be used consistently for all Federal awards until such time as a non-Federal entity chooses to negotiate for a rate, which the non-Federal entity may apply to do at any time.? As defined by 2 CFR Section 200.1: ?Modified Total Direct Cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs, and with the approval of the cognizant agency for indirect costs.? Condition: We noted that the calculation for indirect costs utilized the incorrect base which was not the MTDC. Context: Safe & Sound utilizes the de minimis indirect rate of 10% of MTDC. The condition was identified in a recalculation of indirect costs based on MTDC for 2022. Cause: Safe & Sound did not have policies and procedures in place to ensure indirect cost rate is calculated based on the appropriate base, MTDC. Effect or Potential Effect: Without adequate controls in place to ensure indirect costs are calculated based on MTDC, Safe & Sound could incorrectly charge expenditures to the federal program, or not request appropriate reimbursement Safe & Sound is entitled to under the terms of the grant. Questioned Costs: Below reporting threshold. Identification as a Repeat Finding: Not Applicable. Recommendation: We recommend that Safe & Sound implement policies and procedures to review indirect cost calculations based on MTDC and provide training to staff. Views of Responsible Officials: Management agrees with the finding. Management will implement policies and procedures to appropriately calculate indirect costs.
Finding 2022-006: Internal Controls over Compliance B. Allowable Costs/Cost Principles related to the Payroll Process U.S. DEPARTMENT OF JUSTICE Children Exposed to Violence ? Assistance Listing No. 16.818 Criteria: Controls over payroll processes should be in place to allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements in a timely manner. Per CFR Part 200.403, factors affecting allowability of costs, costs must be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity and be adequately documented in order to be allowable under federal awards. Condition: During 2022, there was a general lack of controls over payroll processes noted for direct payroll costs charged to the Children Exposed to Violence federal program: ? For one employee, the pay rate used to calculate payroll charged to the federal program for one pay period selected for testing did not match the authorized pay rate included in the employee?s human resources records. ? Timecards were not available for any employees for one pay period selected for testing. ? Payroll was not properly allocated to the federal program based on supporting employee timecards between July 10, 2022 and December 31, 2022. Cause: This condition was caused by a combination of a lack of staffs? physically present at the Youthprise office during the year, a lack of staff and oversight of finance department activities, and due to the turnover of finance staff during 2022, as discussed in finding 2022- 002 above. Additionally, during 2022 Youthprise switched payroll processing providers. The one pay period tested which lacked timecards occurred during the payroll provider transition. The improper allocation of time occurred after the new payroll processing provider transition was complete. Effect: By not having effective internal controls over payroll processes, there is a risk that misstatements and unallowable costs charged to federal programs could occur and not be detected in a timely manner. Context: A sample of four pay periods totaling $12,889 was selected for audit from a population of twenty six pay periods totaling $107,968. Although there was a lack of internal controls over the payroll process as noted above, Youthprise was able to substantiate that the total payroll costs charged to the program were allowable and that no overcharges to the federal program occurred. Our sample was a statistically valid sample. Questioned Costs: $0 Identification of Repeat Finding: Not a repeat finding. Recommendation: We recommend Youthprise develop and implement internal controls to ensure sufficient oversight is maintained over its payroll processes to prevent or detect and correct misstatements on a timely basis. Views of Responsible Officials and Corrective Action Plan: The discrepancies in payroll reporting were identified by Youthprise during 2023. Management discovered that reports downloaded from the third-party processor were not accurately coding salary based on timecard reports submitted by some of its employees. Youthprise is working with its Human Resources consultant, who is working with the 3rd party payroll processor, to correct the reporting issues going forward. Youthprise will review its internal controls going forward to ensure sufficient oversight is maintained over its payroll processes to prevent or detect and correct misstatements on a timely basis.
Criteria: 2CFR 200.403, Factors affecting allowability of costs, states that in order for a cost to be allowable under Federal awards it must be accorded consistent treatment. 2CFR 200.412 states that each item of cost for the same purpose must be treated consistently in like circumstances as either a direct or an indirect cost in order to avoid double-charging of Federal awards. Appendix IV to Part 200 4, Direct Allocation Method, all costs are treated as direct costs except general administration and general expenses. Under this method indirect costs consist exclusively of general administration and general expenses. 2CFR 200.425, Audit services, states the audit costs of auditing a non-federal entity that is exempted from having an audit conducted under the Single Audit Act and subpart F of this part because its expenditures under Federal awards are less than $750,000 during the non-Federal entity?s fiscal year are unallowable. 2CFR200.432, Conferences, defines allowable conferences as those necessary and reasonable for successful performance under the Federal award. Condition: A portion of the audit fee for the December 31, 2021 audit was charged as a direct expense ($423). The Council was not required to have a Single Audit for 2021, so this would not be considered allowable. A portion of the fees to send the finance director and a Board member to a conference ($750) were charged as a direct expense. Neither of these attendees were involved in the direct performance of the Federal program, so this would not be considered allowable. Costs for QuickBooks accounting software and payroll services, HR related software, and website costs ($4,047) were charged as direct costs. These are general administration expenses that should have been classified as indirect costs. Further, costs were not treated consistently within the accounting system. A portion of the audit costs, conference fees and software/computer costs were recorded as direct costs to the Federal program and a portion were recorded as indirect costs to other programs. The Organization did not have internal controls in place to meet the costs principles contained in the Uniform Guidance due to the issue discussed in Comment 2022-001. Cause: The Organization was not aware the grants received were Federal awards and they were not familiar with the cost principles contained in the Uniform Guidance. They were relying on the budget accepted by the Agency that passed them the awards. Effect: Since the 10% de minimis indirect cost rate was used, any unallowable costs that were reported as direct costs would cause the calculated indirect costs to be overstated. The grantor could request that any direct costs considered unallowable be repaid. Context: The unallowable costs noted were a minor portion of the direct costs charged to the Federal program. The program was charged approximately $463,000 of direct costs. Approximately 83% ($384,000) of the direct costs were wages, benefits and independent contractor fees for providers that worked directly for the Opiod STR program and direct rent for the program space. No exceptions we noted during our testing of these. The remaining 17% of the direct costs (approximately $79,000) were for a variety of expenses. We separated these items into 2 categories: recurring/annual charges allocated to the program of approximately $24,000 and other various costs. We tested the Organization?s allocation methodology for the identifiable recurring/annual costs. The results of this testing identified items that should have been classified as general administration indirect costs, as described above, which amounted to approximately $4,500. Testing was also done on the other various direct costs. There were 177 of these items totaling approximately $55,000. We tested a sample of 20 of these items. $750 of directly allocated costs for a conference were considered unallowable out of this testing. Questioned Costs: As a result of our testing, we concluded that the potentially unallowable costs and change in the indirect calculation would not be significantly different than the amounts discussed above and would not approach the $25,000 threshold for questioned costs. As a result, no costs have been questioned. Recommendation: We recommend that personnel involved in grant management and recordkeeping receive training on the Uniform Guidance cost principles and other pertinent Federal regulations. We recommend that a system and review process be implemented to insure that all costs are treated consistently and classified properly and that costs charged to Federal awards are appropriate. The Organization should follow the cost principles when designing budgets for future programs.
Assistance Listing Number, Federal Agency, and Program Name - 20.106, Federal Aviation Administration, Airport Improvement Program Federal Award Identification Number and Year - 3-26-0039-068-2022; 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - The Uniform Guidance cost principles described in 2 CFR Part 200, Subpart E, apply to the Airport Improvement Program. Except as otherwise authorized by statute, costs must be determined except for state and local governments or as otherwise provided for in the Code of Federal Regulations (2 CFR 200.403). Condition - Unallowable costs incurred prior to the period of performance under the grant agreement were submitted and reimbursed by the granting agency. Additionally, these costs were initially included on the schedule of expenditures of federal awards. Questioned Costs - $139,625 Identification of How Questioned Costs Were Computed - The questioned costs were determined by totaling all invoices charged to the grant for costs incurred prior to the period of performance and not eligible for reimbursement. Context - The questioned costs of $139,625 charged to the grant related to the same project approved by the granting agency; however, these costs fell outside of the stipulated project period within the grant application and were designated to be covered by the Authority's local match requirement. Cause and Effect - Internal control procedures relative to the identification of federal expenditures to be charged to the grant did not operate effectively. This resulted in the unallowable costs charged to the grant and the Authority's schedule of expenditures of federal awards to be inaccurate prior to corrections made by management. Recommendation - We recommend that the Authority enhance review procedures prior to submission of grant reimbursements to ensure that costs were incurred in the period of performance under the grant. Views of Responsible Officials and Planned Corrective Actions - The personnel responsible for submitting reimbursement requests will review grant agreements with the personnel responsible for applying for the grants upon their award. Worksheets created for reimbursement and reporting will be reviewed against the grant schedules for accuracy.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Criteria - The Uniform Guidance in 2 CFR Section 200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. In addition, per 2 CFR Section 200.403, ?Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards: (a)Be necessary and reasonable for the performance of the Federal award and be allocablethereto under these principles. (b)Conform to any limitations or exclusions set forth in these principles or in the Federal awardas to types or amount of cost items. (c)Be consistent with policies and procedures that apply uniformly to both federally-financedand other activities of the non-Federal entity. (d)Be accorded consistent treatment. A cost may not be assigned to a Federal award as a directcost if any other cost incurred for the same purpose in like circumstances has been allocatedto the Federal award as an indirect cost. (e)Be determined in accordance with generally accepted accounting principles (GAAP), except,for state and local governments and Indian tribes only, as otherwise provided for in this part. (f)Not be included as a cost or used to meet cost sharing or matching requirements of any otherfederally-financed program in either the current or a prior period. (g)Be adequately documented.? Condition ? In our examination of the program?s indirect cost charges, we noted that APS did not charge the appropriate indirect cost of $81,916 for the months of May through July 2022 to the program. Consequently, an adjustment was recorded to correct the SEFA. Cause ? Management did not adhere to their internal policies and procedures to ensure that all federal transactions are charged to the programs and that the SEFA is complete and accurate. Effect or potential effect ? The SEFA may not be fairly presented, in all material respects, in relation to the basic financial statements taken as a whole. In addition, the lack of adherence to the established internal controls policies and procedures can lead to noncompliance with federal statutes, regulations, and provisions of grant agreements. Questioned Costs ? None. Context ? This is a condition identified per review of APS? compliance with specified requirements using a statistically valid sample. Recommendation ? We recommend that APS strengthen their policies and procedures to ensure the completeness and accuracy of the SEFA. Views of Responsible Officials - APS concurs with this finding. APS?s corrective action is described in the Management?s Corrective Action Plan included below.
Assistance Listing Number(s): 21.027 Name of Federal Program or Cluster: Coronavirus State and Local Fiscal Recovery Funds Name of Federal Agency: Department of the Treasury Name of Pass-through Entity: The Salvation Army of Dane County Award Period: 12/01/2021 - 04/30/2022 Criteria or Specific Requirement: According to 2 CFR section 200.403(h), a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance. Condition: YWCA charged costs incurred after the period of performance to the award. Four individually important items totaling $56,117 and a sample of ten charges totaling $10,952 were selected for testing from a population of 73 charges totaling $108,448. The testing found one charge totaling $2,964 that was incurred after the award period ended. Cause: YWCA did not properly design policies and procedures to ensure period of performance is timely reviewed and approved. In addition, YWCA experienced turnover in the CFO position, which is responsible for reviewing and approving period of performance.Effect or Potential Effect: Costs incurred before or after the period of performance may be disallowed. Repeat Finding: No. Recommendation: YWCA should establish written policies and procedures to provide for timely and appropriate review and approval for period of performance. Views of Responsible Officials: YWCA agrees with the finding and is establishing policies and procedures to provide for timely and appropriate review and approval of period of performance. This is expected to be completed by September 2023.
Finding 2022-002 - Controls Over Payroll Expenditures (Material Weakness) Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed. Condition and Context: A summary of allowable charges for the grant was prepared for submission. Differences were noted when comparing the summary to timecards. Within the sample of 45, we noted that 31 timecards did not have a documented review. From the sample, we noted that the pay advice form, which reflects pay rate changes, for 2 employees did not indicate signature by an approver and only indicated the requestor?s signature. The employees? new pay rate as indicated on the pay advice form was reflected in the payroll expenditure. Additionally, within the sample of 45, we noted 1 employee that did not have a pay advice form or contract to support the pay rate. We noted the following control items: ? 31 out of 45 timecards tested did not have documented review. ? 2 out of 45 employees tested did not have pay advice forms signed by both the requestor and reviewer. Only the requestor signed the form. ? 1 out of 45 employees tested did not have a pay advice form or other supporting documentation for the pay rate. Effect: Payroll expenditures could be inaccurately charged to the federal grant. Cause: The lack of documented timecard and pay rate approval were an oversight. Questioned Costs: None Recommendation: We recommend the Corporation maintain documented approval of all timecards and pay rate increases. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.
Finding 2022-002 - Controls Over Payroll Expenditures (Material Weakness) Criteria: 2 CFR 200.403 establishes principles and standards for determining costs for federal awards carried out through grants, cost reimbursement contracts, and other agreements with state and local governments. To be allowable, under federal awards, cost must meet certain criteria: a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles. b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items. c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost. e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part. f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally financed program in either the current or a prior period. g) Be adequately documented. h) Cost must be incurred during the approved budget period. Additionally, 2 CFR 200.303 indicates that non-Federal Entities receiving Federal awards must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. The Corporation should have controls in place to document that salaries and overtime paid with federal funds were allowable. Timecards supporting hours worked should be approved and pay rates reviewed. Condition and Context: A summary of allowable charges for the grant was prepared for submission. Differences were noted when comparing the summary to timecards. Within the sample of 45, we noted that 31 timecards did not have a documented review. From the sample, we noted that the pay advice form, which reflects pay rate changes, for 2 employees did not indicate signature by an approver and only indicated the requestor?s signature. The employees? new pay rate as indicated on the pay advice form was reflected in the payroll expenditure. Additionally, within the sample of 45, we noted 1 employee that did not have a pay advice form or contract to support the pay rate. We noted the following control items: ? 31 out of 45 timecards tested did not have documented review. ? 2 out of 45 employees tested did not have pay advice forms signed by both the requestor and reviewer. Only the requestor signed the form. ? 1 out of 45 employees tested did not have a pay advice form or other supporting documentation for the pay rate. Effect: Payroll expenditures could be inaccurately charged to the federal grant. Cause: The lack of documented timecard and pay rate approval were an oversight. Questioned Costs: None Recommendation: We recommend the Corporation maintain documented approval of all timecards and pay rate increases. Views of responsible officials and planned corrective actions: Management agrees with the finding and has prepared a corrective action plan.