Finding Text
Health Center Program Cluster – Assistance Listing Nos. 93.224 and 93.527
U.S. Department of Health and Human Services
Award No. 6 H80CS00751-22-03, April 1, 2023 – March 31, 2024
Community Health Center Program – State Identifying No. 435.151301
Wisconsin Department of Health
Agreement No. 435100-G24-3919588107-90, July 1, 2023 – June 30, 2024
Criteria or Specific Requirement – Period of Performance – Federal: 45 CFR 75.309. State: 2 CFR 200.430.
Condition – Costs charged to the grant award were incurred prior to the start of the period of performance.
Questioned Costs – Federal: $103,466. State: $5,195. Questioned costs were determined by identifying salaries and wages incurred prior to the beginning of the period of performance based on payroll periods and pay dates. Questioned costs by federal or state award identification number are:
• Assistance Listing No. 93.527 Award No. 6 H80CS00751 – $103,466
• Agreement No. 435100-G24-3919588107-90 – $5,195
Context – Salaries and wages from the first pay period paid during the period of performance was charged to the federal and state awards. For Award No. 6 H80CS00751 within Health Center Program Cluster (HCP), payroll paid on April 7, 2023, was charged to the federal award, while 100% of payroll costs were incurred as of March 31, 2023. For Agreement No. 435100-G24-3919588107-90 within Wisconsin Department of Health Community Health Center Program (CHCG), payroll paid on June 14, 2023, was charged to the state award, while 50% of payroll costs were incurred as of June 30, 2023.
Effect – The Organization charged salaries and wages incurred prior to the beginning of the period of performance in both HCP and CHCG.
Cause – Salaries and wages are charged to federal and state awards based on payroll documentation summarized monthly based on pay date rather than accrual-based salary and wage expense.
Identification as a repeat finding, if applicable – Not a repeat finding
Recommendation – The Organization should implement cut-off procedures to ensure grant expenditures are captured on the accrual-basis consistent with period of performance compliance requirements and generally accepted accounting principles. To more easily accomplish this, the Organization should identify allowable salaries and wages by payroll period rather than from payroll data summarized monthly by pay date.
Views of responsible officials and planned corrective actions – Upon identification of costs incurred prior to the beginning of the period of performance, the Organization identified allowable costs incurred within the period of performance and previously charged to program income in order to reallocate grant expenditures without creating other instances of noncompliance (such as cash management). Although the initial support provided to auditors contained instances of expenditures incurred prior to the beginning of the period of performance, expenditure justification has been updated to reflect corrections and all subsequent grant expenditure detail has been reviewed to ensure no recurrence in the subsequent period.
The Organization has also reviewed our internal processes for cut-off procedures related to grant expenditures. We will implement additional internal controls at the end of the grant and the beginning of the grant to ensure accuracy of the salaries being posted are in the correct period of performance. We are also working with our accounting software vendor and payroll vendor to automate the allocation of grant salaries based on time and effort of each individual rather than after-the-fact allocations to grants. This will reduce the need to maintain manual spreadsheets to track staff by lining up grant expenditures with pay periods instead of monthly allocations. Further, relevant staff participated in a training focused on CHC grants management matters in December 2024 and will continue to look for learning opportunities to support and challenge compliance matters.