Finding Text
Finding 2023-002, Level of Effort, Internal Control and Noncompliance
Identification of the federal program
Assistance listing number and title: 93.493 Congressional Directives
Agency: U.S. Department of Health and Human Services
Federal award identification number (FAIN): H79FG000881, H79FG000989, H79FG000996
Federal Award Year: 2022, 2023
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 would 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).”
Each of the Notices of Award (NOA) lists a specific key personnel (also called a Project Director) at a 25% level of effort. Furthermore, the NOAs state that organizations receiving federal funds may not exceed 100% level of effort for any program staff member across all federally funded sources. Any changes to key personnel including level of effort involving separation from the project for more than three months or a 25% reduction in time dedicated to the project requires prior approval and must be submitted as a post-award amendment in eRA Commons.
Condition
Sufficient evidence was not provided evidencing that the System complied with the 25% level of effort required for the key personnel and whether there were any changes were approved by the Federal agency.
Cause
The System failed to implement controls over the level of effort requirement. Management did not retain evidence to properly support the level of effort of key personnel.
Effect or potential effect
The key personnel level of effort required by the grant was not maintained and any changes in the said level of effort was not approved by the Federal agency.
Questioned costs
None, as the key personnel’s salaries and benefits were not charged to the Federal grant in 2023.
Context
EY reviewed the three (3) NOAs under the Federal grant and identified three (3) key personnel with a 25% level of effort. Supporting documentation such as timesheet tracking or level of effort certifications was not provided. As a result, the System was unable to substantiate that the required level of effort was met. Per inquiry, management believed that they did not need to substantiate the level of effort indicated in the NOAs because the Federal agency did not require reporting of such.
Identification as a repeat finding, if applicable
Not a repeat finding.
Recommendation
Management should develop and implement internal controls to ensure that any level of effort listed in the grant award documents are documented and substantiated. Management should also obtain written communications from the Federal awarding agency for any clarifications they have on the provisions of the grant award documents.
Views of responsible officials
Management will implement effort tracking for all staff providing in-kind effort to any grant program.
Documentation of time spent will be sent to grant management team bi-weekly for review and approval.
Management will maintain electronic documentation of this review and approval in the grant files.