Section III - Federal Award Findings and Questioned Costs Finding 2023-002 Significant Deficiency Assistance Listing: 84.351 C.A.R.E. Condition: Cleveland Play House does not have adequate documentation to support all charges to the federal program. Of the 40 payroll charges tested, 32 did not have adequate documentation. Of the 40 non-payroll charges tested, supporting documentation for 2 charges was unable to be located. In addition, management provided an Excel spreadsheet to support the charges that were made to the program rather than reporting from their financial management system that is compliant with Section 200.302. Criteria: 2 CFR 200.430(i) states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. 2 CFR 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented. In addition, Section 200.302 requires that the financial management system must provide for an identification, in its accounts, of all federal awards received and expended and the federal programs under which they were received; an accurate, current and complete disclosure of the financial results of each federal award or program; and a comparison of expenditures with budget amounts for each federal award. Cause: Due to significant organizational turnover in fiscal years 2022 and 2023, individuals were not completing timesheets to document level of effort for federal programs. Although management was verbally communicating with these individuals during the year and tracking the time they spent on the program within a spreadsheet, this is not considered adequate documentation. In addition, and also a result of the turnover, certain documentation to support non-payroll expenditures was unable to be located. Effect: Cleveland Play House did not have adequate documentation to support all costs charged to the federal program. In addition, an ineffective financial management system could lead to incorrect identification of costs charged to a federal program and an inability to substantiate that doublecharging did not occur. Repeat finding: This is a repeat finding, refer to 2022-002. Section III - Federal Award Findings and Questioned Costs (Continued) Questioned costs: Non-payroll: $267 Payroll: $49,059 Recommendation: We recommend that Cleveland Play House develop a policy and procedure to ensure that all hours submitted for federal reimbursement are supported with timesheets that are approved by a supervisor. In addition, staff should be made aware of the policy and procedures to ensure retention of documentation for non-payroll expenditures. Views of responsible officials: Management concurs with this recommendation. See also corrective action plan.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Identification of the Federal Program: Assistance Listing Number 17.259 – WIOA Youth Activities Program – U.S. Department of Labor. Pass-through Entity: New York City Department of Youth and Community Development. Award Number: 90535A / 90536A / 90537A / 90538A. Compliance Requirement: Allowable Costs/Cost Principles Criteria: Requirements per section 2 CFR Part 200.430 of the Uniform Guidance state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed and be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During our testing for the year ended June 30, 2023, we noted a lack of detail for employee’s actual hours spent on different programs. Time and effort are allocated based on budgeted amounts. Cause: Allocation to funding sources were entered into the payroll system based on budgeted estimates rather than actual time records. Effect or Potential Effect: The lack of contemporaneous documentation of employee hours worked by grant or federal program could allow the Organization to improperly allocate employee pay to federal grants. Questioned Costs: $65,379 Context: As most employees work specifically on a single program, there was only one employee that worked on multiple programs for which time spent on the program could not be substantiated. The total questioned cost allocated to the program for this person totaled $65,379. Recommendation: The Organization should implement a requirement for employees, both exempt and nonexempt, to maintain accurate records of hours worked by program. Repeat finding: Yes, 2022-003. View of Responsible Officials: The Organization concurs with the finding and the related recommendations. Management has begun to implement mandatory time and program effort records during the year ending June 30, 2024.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding 2023-002 – Internal Controls over Payroll Tracking & Recording Assistance Listing #: ALL Federal Awards: All Criteria: In accordance with the Uniform Guidance’s compensation requirements (2 CFR 200.430), payroll systems must be based on records that accurately reflect the work performed and supported by a system of internal controls that provides reasonable assurances that charges are accurate; allowable and reasonable; and properly allocated amongst programs. Condition: During our testing of 40 payroll transactions, we noted five instances where the time charged on the employee’s timesheet by program did not agree to the programs actually charged in the general ledger, and ultimately billed to the applicable grant award. Cause: The Organization summarizes employee timesheet data amongst programs on a reclass spreadsheet, which serves as the basis for entry into the general ledger. It appears there were errors when entering time from the timesheet into the reclass spreadsheet, which were not detected as a secondary review was not performed. Effect: The effect of the errors noted above did not exceed $850. Although the overall errors were immaterial, an inherent risk exists that errors could be material and not be detected and corrected without sufficient review. Questioned Costs: N/A Repeat Finding: No Recommendation: We recommend the Organization review its current processes over payroll to ensure that payroll costs are captured and recorded correctly in the financial management system. Response: We concur with the Finding. The CFO will immediately evaluate the need for additional controls to ensure accurate recording of time charged to program as reflected on the employee’s timesheet.
Finding #2023-001 Type: Significant Deficiency Federal Agency: Department of Health and Human Services Program Name: Research and Development Cluster AL Number: 93.399 Grant Name: Cancer Research of Wisconsin and Northern Michigan (CROWN) Consortium Grant Identification Number: 5UG1CA239769-03 Federal Award Year: August 1, 2021 through July 31, 2022 Compliance Requirement: Allowable Costs/Cost Principles Criteria In accordance with the documentation standards of 2 CFR section 200.430(i), costs of compensation for personal services are allowable to the extent the total compensation for individual employees: a. Is reasonable for the services rendered and conforms to the established written policy of the non-federal entity consistently applied to both federal and non-federal activities; b. Follows an appointment made in accordance with a non-federal entity’s rules or written policies and meets the requirements of federal statute, where applicable; and c. Is determined and supported as provided in 2 CFR section 200.430(i), including that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Condition Found During testwork performed over the Research and Development Cluster, for 1 of 25 payroll items selected for testing we noted that a clerical error was made for an employee’s salary as 76% of their time was allocated to the grant, instead of the actual 0.76%. As such, $12,411 of the individual’s salary allocated to the grant was deemed unallowable. There are additional known questioned costs related to fringe and indirect costs, as the base upon which those calculations were applied was misstated for the above. Cause and Possible Asserted Effect The control to reconcile the costs allocated to the grant to supporting records did not operate effectively, resulting in incorrect charges being applied to the grant. Questioned Costs Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Repeat Finding from Prior Year No Recommendation We recommend a control reconciling all costs allocated to the grant to supporting records be performed on a monthly basis. Views of Responsible Officials See attached correction plan at the end of this report.
Activities Allowed or Unallowed and Allowable Costs Material Weakness in Internal Control over Compliance Program Name: Career and Technical Education Act, Title I, Part C Federal Financial Assistance Listing Numbers: 84.048A Federal Agency: U.S. Department of Education (ED) Pass-Through Entity: California Community Colleges Chancellor’s Office Program Name: Foster Care Title IV-E Federal Financial Assistance Listing Numbers: 93.658 Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Entity: City and County of San Francisco Criteria or Specific Requirements The Uniform Guidance states that personnel costs for federal programs should represent only “reasonable amounts for activities contributing and directly related to work under an agreement”. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed (2 CFR 200.430). Condition Time and effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program, was not performed consistently or in a timely manner for the year ending June 30, 2023. Questioned Costs There were no questioned costs associated with the condition identified. Context The federal programs referenced above had a total of $1,521,228 in expenditures for the year ended June 30, 2023, of which $832,331 was associated with salaries and benefits. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District’s review of personnel charges to identify the employee costs that should and should not be charged to federal programs was not performed consistently, or in a timely manner. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs for federal program in accordance with their policies and procedures. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel charges for federal grants.
Activities Allowed or Unallowed and Allowable Costs Material Weakness in Internal Control over Compliance Program Name: Career and Technical Education Act, Title I, Part C Federal Financial Assistance Listing Numbers: 84.048A Federal Agency: U.S. Department of Education (ED) Pass-Through Entity: California Community Colleges Chancellor’s Office Program Name: Foster Care Title IV-E Federal Financial Assistance Listing Numbers: 93.658 Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Entity: City and County of San Francisco Criteria or Specific Requirements The Uniform Guidance states that personnel costs for federal programs should represent only “reasonable amounts for activities contributing and directly related to work under an agreement”. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed (2 CFR 200.430). Condition Time and effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program, was not performed consistently or in a timely manner for the year ending June 30, 2023. Questioned Costs There were no questioned costs associated with the condition identified. Context The federal programs referenced above had a total of $1,521,228 in expenditures for the year ended June 30, 2023, of which $832,331 was associated with salaries and benefits. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District’s review of personnel charges to identify the employee costs that should and should not be charged to federal programs was not performed consistently, or in a timely manner. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs for federal program in accordance with their policies and procedures. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel charges for federal grants.
Activities Allowed or Unallowed and Allowable Costs Material Weakness in Internal Control over Compliance Program Name: Career and Technical Education Act, Title I, Part C Federal Financial Assistance Listing Numbers: 84.048A Federal Agency: U.S. Department of Education (ED) Pass-Through Entity: California Community Colleges Chancellor’s Office Program Name: Foster Care Title IV-E Federal Financial Assistance Listing Numbers: 93.658 Federal Agency: U.S. Department of Health and Human Services (HHS) Pass-Through Entity: City and County of San Francisco Criteria or Specific Requirements The Uniform Guidance states that personnel costs for federal programs should represent only “reasonable amounts for activities contributing and directly related to work under an agreement”. Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed (2 CFR 200.430). Condition Time and effort reporting, or another similar internal control activity to retroactively verify employee time spent on the program, was not performed consistently or in a timely manner for the year ending June 30, 2023. Questioned Costs There were no questioned costs associated with the condition identified. Context The federal programs referenced above had a total of $1,521,228 in expenditures for the year ended June 30, 2023, of which $832,331 was associated with salaries and benefits. Effect Without effective internal controls in place over personnel costs, the District risks noncompliance for program costs that could be material. Cause The District’s review of personnel charges to identify the employee costs that should and should not be charged to federal programs was not performed consistently, or in a timely manner. Repeat Finding (Yes or No) No Recommendation The District should monitor personnel costs for federal program in accordance with their policies and procedures. The District should review personnel costs on a regular basis to ensure that costs charged are supported by allowable activities directly related to the program. Additionally, adequate supporting documentation should be retained for personnel charges for federal grants.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Number: 84.425U, 84.425W Federal Agency: U.S. Department of Education Federal Award Number: S425U210038, S425W210003 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria According to the Office of Management and Budget Uniform Guidance requirements 2 CFR §200.230(i) charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Specifically, according to 2 CFR §200.430(i)(vii) the records must 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. Condition Time and effort records were not accurately maintained for employees. Cause District management did not have adequate internal controls in place to ensure the time and effort documentation completed by the employee accurately reflected the work performed. Effect The District was not in compliance with the requirements set forth by the federal government. Context For one employee reviewed, time and effort documentation was not maintained for an employee that worked on a federal program and non‐federal program. For seven employees reviewed who work on more than one federal program, the employees' time and effort documentation only included one federal program. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should design and implement internal controls to ensure proper training on the preparation of time and effort documentation is distributed to all employees and that all time and effort documentation accurately reflects the work performed. Views of Responsible Officials See Corrective Action Plan.
Finding Number: 2023‐001 Repeat Finding: No Program Name/Assistance Listing Title: COVID‐19 Education Stabilization Fund Assistance Listing Number: 84.425U, 84.425W Federal Agency: U.S. Department of Education Federal Award Number: S425U210038, S425W210003 Pass‐Through Agency: Arizona Department of Education Questioned Costs: N/A Type of Finding: Noncompliance, Significant Deficiency Compliance Requirement: Allowable Costs/Cost Principles Criteria According to the Office of Management and Budget Uniform Guidance requirements 2 CFR §200.230(i) charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Specifically, according to 2 CFR §200.430(i)(vii) the records must 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. Condition Time and effort records were not accurately maintained for employees. Cause District management did not have adequate internal controls in place to ensure the time and effort documentation completed by the employee accurately reflected the work performed. Effect The District was not in compliance with the requirements set forth by the federal government. Context For one employee reviewed, time and effort documentation was not maintained for an employee that worked on a federal program and non‐federal program. For seven employees reviewed who work on more than one federal program, the employees' time and effort documentation only included one federal program. The sample was not intended to be, and was not, a statistically valid sample. Recommendation The District should design and implement internal controls to ensure proper training on the preparation of time and effort documentation is distributed to all employees and that all time and effort documentation accurately reflects the work performed. Views of Responsible Officials See Corrective Action Plan.
Finding Reference Number: SA2023-002 Documenting Payroll Costs Charged to Grant Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant – Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-22-MC-06-0010 COVID-19 - B-20-MW-06-0010 Criteria: 2 CFR Part 200.430(i), “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” requires that grantees adhere to the following, “Payroll systems must be based on records that accurately reflect the work performed” and “be supported by a system of internal controls that provides reasonable assurances that charges are accurate, allowable, and properly allocated...” The payroll records must be a part of the official record, reflect the employee’s total activity and show if the specific activity of the person is being paid by more than one federal award. Section 200.430(i)(viii) indicates that 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 the system for establishing the estimates produces reasonable approximations of the activity actually performed, among other requirements. Condition: We noted that the payroll costs for three employees were charged to the program based on a flat rate percentage of the payroll and benefits costs, rather than based on the actual hours worked. Although we understand the housing staff periodically reviews the estimates to ensure they were supported and did not need adjustment, there is no formal documentation of the review and conclusions reached. City staff did provide us with the annual timesheet reconciliation worksheets for two of the employees that showed that on average over fiscal year 2023, the employees spent more actual time than was allocated via the flat percentage rate to the grant program. Effect: The City is not in compliance with the payroll documentation requirements set forth in 2 CFR Part 200.430(i). Cause: We understand that grant program staff were not aware of the payroll documentation requirement. Recommendation: The City should establish procedures to ensure that payroll costs charged to the program are documented in accordance with 2 CFR Part 200.430 for the CDBG program and all federal grant programs. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding Reference Number: SA2023-002 Documenting Payroll Costs Charged to Grant Assistance Listing Number: 14.218 Assistance Listing Title: Community Development Block Grant – Entitlement Grants COVID-19 - Community Development Block Grants/Entitlement Grants-CV Federal Agency: Department of Housing and Urban Development Federal Award Identification Number: B-22-MC-06-0010 COVID-19 - B-20-MW-06-0010 Criteria: 2 CFR Part 200.430(i), “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards” requires that grantees adhere to the following, “Payroll systems must be based on records that accurately reflect the work performed” and “be supported by a system of internal controls that provides reasonable assurances that charges are accurate, allowable, and properly allocated...” The payroll records must be a part of the official record, reflect the employee’s total activity and show if the specific activity of the person is being paid by more than one federal award. Section 200.430(i)(viii) indicates that 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 the system for establishing the estimates produces reasonable approximations of the activity actually performed, among other requirements. Condition: We noted that the payroll costs for three employees were charged to the program based on a flat rate percentage of the payroll and benefits costs, rather than based on the actual hours worked. Although we understand the housing staff periodically reviews the estimates to ensure they were supported and did not need adjustment, there is no formal documentation of the review and conclusions reached. City staff did provide us with the annual timesheet reconciliation worksheets for two of the employees that showed that on average over fiscal year 2023, the employees spent more actual time than was allocated via the flat percentage rate to the grant program. Effect: The City is not in compliance with the payroll documentation requirements set forth in 2 CFR Part 200.430(i). Cause: We understand that grant program staff were not aware of the payroll documentation requirement. Recommendation: The City should establish procedures to ensure that payroll costs charged to the program are documented in accordance with 2 CFR Part 200.430 for the CDBG program and all federal grant programs. View of Responsible Officials and Planned Corrective Actions: Please see Corrective Action Plan separately prepared by the City.
Finding 2023-002 – Allowable Costs/Cost Principles Identification of the federal program: U.S. Department of Health and Human Services Medical Assistance Program (Medicaid Cluster) Assistance Listing No. 93.778 Passed through County of Sacramento Pass Through Number Pass Through Entity Grant Period 7202100-23-096 County of Sacramento (7/1/2022 – 12/10/2022) Mercy San Juan Medical Center Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At Mercy San Juan Medical Center, internal controls over the required allowability criteria with regard to payroll expense were not performed for 2 of 25 employees selected for testing. Cause: Mercy San Juan Medical Center management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 2 of 25 payroll expenditures selected for testing, Mercy San Juan Medical Center did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Mercy San Juan Medical Center. Total non-service-based payroll expenditures for Mercy San Juan Medical Center were approximately $0.3 million and represent 5% of the total Medicaid Cluster expenditures of approximately $6.5 million. Identification of a repeat finding: This is not a repeat finding. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Finding 2023-003 – Allowable Costs/Cost Principles Identification of the federal program: Health Resources and Services Administration HIV Emergency Relief Project Grants Assistance Listing No. 93.914 Pass Through Numbers Pass Through Entity Grant Period PH-002898 County of Los Angeles (1/1/2011 – 2/28/2023) PH-002375 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003746 County of Los Angeles (12/1/2012 – 6/30/2025) PH-003802 County of Los Angeles (1/1/2013 – 6/30/2025) H-208518 County of Los Angeles (4/1/2006 – 7/31/2025) PH-004205 County of Los Angeles (6/1/2020 – 2/28/2023) 8198 PREV King County Public Health (3/1/2022 – 2/28/2023) 10126 PREV King County Public Health (3/1/2022 – 2/28/2024) St. Mary Medical Center – Long Beach Bailey-Boushay House Criteria or specific requirement (including statutory, regulatory, or other citation): 2 CFR 200.303(a) requires that a 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” 2 CFR 200.430 (i) states “Standards for Documentation of Personnel Expenses (1) Charges to Federal awards for salaries and wages must be based on records that accurately reflected the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity; (iii) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities; (iv) encompass both federal assisted and all other activities compensated by the non-Federal entity on an integrated basis, but may include the use of subsidiary records as defined in the non-Federal entity’s written policy; (v) comply with the established accounting policies and practices of the non-Federal entity.” Condition: At St. Mary Medical Center – Long Beach, internal controls with regard to approving timecards were not performed for 3 of 40 employee timecards selected for testing. At Bailey-Boushay House, internal controls with regard to approving timecards were not performed for 6 out of 40 employee timecards selected for testing. Cause: St. Mary Medical Center – Long Beach and Bailey-Boushay House management did not consistently perform the necessary internal control procedures addressing the requirements of 2 CFR 200.303(a) and 2 CFR 200.430. Effect or potential effect: Unallowable and/or inaccurate payroll expenditures could be charged to the federal program. Questioned costs: None. Context: For 3 of 40 payroll expenditures selected for testing, St. Mary Medical Center – Long Beach did not properly approve the employee timecard for time charged to the grant in accordance with the practices of St. Mary Medical Center – Long Beach. For 6 out of 40 payroll expenditures selected for testing, Bailey-Boushay House did not properly approve the employee timecard for time charged to the grant in accordance with the practices of Bailey-Boushay House. Total payroll expenditures for St. Mary Medical Center – Long Beach were approximately $1.3 million and represent 32% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Total payroll expenditures for Bailey-Boushay House were approximately $1.1 million and represent 25% of the total HIV Emergency Relief Project Grants expenditures of approximately $4.2 million. Identification of a repeat finding: This is not a repeat finding for St. Mary Medical Center – Long Beach. This is a repeat finding for Bailey-Boushay House – Finding 2022-007 and 2021-008. Recommendation: We recommend management execute its processes to properly approve all time charged to federal grants in accordance with 2 CFR 200.430. Additionally, we recommend management execute and retain evidence of its internal controls over the allowability of payroll expenditures. Views of responsible officials: Management agrees with the finding and will implement corrective action in April 2024.
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”
2023-004 Lack of Documentation to Support Distribution of Wages (Significant Deficiency) Federal Agency: Department of Education Pass-through Agency: New Hampshire Department of Education Cluster/Program: Education Stabilization Fund Assistance Listing Numbers: 84.425U Passed-through Identification: #20221080 Compliance Requirement: Activities Allowed or Unallowed and Allowable Costs/Cost Principles Type of Finding: Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement: Federal regulations 2 CFR 200.303 states, the District, as a recipient of Federal funds, must establish and maintain effective internal controls 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. In addition, under 2 CFR 200.430, it states that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must (1) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, (2) be incorporated into the official records of the non-Federal entity, (3) reasonably reflect the total activity for which the employee is compensated by the non-Federal entity, not exceeding 100% of compensated activities, and (4) 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 or a federal award and non-Federal award. Condition: During our review of payroll charged to the grant, we noted one employee did not sign their semi-annual certification covering July 1st to December 31st. In speaking with the District, it was explained that the employee left the grant funded position in November 2022 before the 6 month period was completed. While the semi-annual certification was completed after the fact and signed by a supervisory official, the employee continued to be employed by the district as a substitute which allowed ample time for the employee to sign their semi-annual certification. Cause: Administrative oversight. Effect: The District did not have adequate documentation to support the time spent on activities by the employee. Questioned Costs: $5,990.73 Repeat Finding: This is not a repeat finding. Recommendation: We recommend that semi-annual certifications be completed after the fact and signed by the employee and supervisory official having firsthand knowledge of the work performed by the employee. Views of Responsible Officials: Management’s views and corrective action plan is included at the end of this report.