Finding Text
SIGNIFICANT DEFICIENCY
2020-002 Allowable Costs
Federal Agency: U.S. Department of Health and Human Services
Federal Program Title: Technical and Nonfinancial Assistance to Health Centers
Program Assistance Listing Number: 93.224 and 93.527
Award Period: 2/1/2020 – 1/31/2021
Type of Finding: Significant Deficiency in Internal Control over Compliance and Compliance
Criteria or specific requirement: 2 CFR Subpart E
Condition: The auditor tested a sample of forty expenditures of which a payroll transaction did not have evidenced of an approved wage rate.
Questioned Costs: None
Context: Evidence of approval for the basis of a cost reimbursed by the federal award was not maintained.
Cause: Internal process and procedures were not followed as required by the Center’s internal control requirements.
Effect: Costs reimbursed by the grant were not supported by the proper authorization and approval.
Recommendation: The Center should ensure source documentation is maintained for all costs and elements of a cost calculation reimbursed by federal awards.
Views of responsible officials and planned corrective action: There is no disagreement with the audit finding from responsible officials. The passage of time and turnover in the department contributed to the oversight. Since 2020, we’ve separated Payroll functions from HR, to ensure there is a check and balance, and that all personnel changes, to include changes to wage rate changes are reviewed by HR, submitted for Leadership/Executive approval, documentation is scanned, and kept with adjustments/updates to any wages. Further, we have since transitioned all personnel files to our HRIS system, which includes payroll, to ensure there is an audit trail of every action taken.