Finding Text
Identification of the Federal Program:Governmental Department/Agency:Department of Health and Human Services (HHS),Centers for Medicare & Medicaid ServicesAssistance Listing Number: 93.650Award Number: 1P1CMS331584-05-00Award Year: 5/01/2021 ? 12/31/2022Criteria ? The Code of Federal Regulations 200.403(g) states that for costs to be allowed under Federal awards, they must be adequately documented and there must be sufficient documentation. Additionally, 200.414(f) states that any non-Federal entity that does not have a current negotiated (including provisional) rate, may elect to charge a de minimis rate of 10% of modified total direct costs which may be used indefinitely. No documentation is required to justify the 10% de minimis indirect cost rate.Condition ? During our cash management testing, we noted indirect expenses recognized in April 2022 exceeded the elected de minimis rate of 10%. The additional expense reported was credited subsequent to year end, in July of 2022. This additional expense resulted in an over reporting and reimbursement of expenses in the April 2022.Cause ? Policies and procedures were not adhered to in certain instances to ensure that indirect costs submitted for reimbursement were meeting the appropriate guidelines.Effect ? An ineffective control system related to the charging of indirect costs to federal programs at the elected de minimis amount of 10%. Charging more than the elected 10% de minimis rate is considered noncompliance with Federal regulations and the Organization?s policy.Questioned Costs ? $3,256Context ? BDO obtained the summary of expenses submitted for reimbursement for each month of the grant year, which agreed to the amount reported on the SEFA. Each month, the indirect cost was recalculated to ensure the 10% threshold was being met. The April 2022 direct expenses were $60,381 and the indirect expenses were $9,294. If the 10% rule had been appropriately applied, the April indirect expense would have been $6,038. This resulted in an excess of approximately $3,256 expense submitted in the month of April.Repeat Finding ? This is not a repeat finding.Recommendation - We recommend that the Organization ensure its policies and procedures are followed on a consistent basis.Views of Responsible Officials and Planned Corrective Actions ? The Organization concurs with the finding and the recommendation. The Organization?s corrective action plan is described in Management?s Corrective Action Plan included at page 58 of this reporting package.