Finding 1104735 (2024-001)

Finding 2024-001 – Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Identification of the federal program: Federal Grantor: United States Department of Treasury Assistance Listing No.: 21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds Pass-Through Grantor: Michigan Health & Hospital Association Ascension Ministry Market: Michigan Pass-Through Award Number: SLFRP0127 Pass-Through Award Period: 12/01/2021-09/30/2023 Criteria or specific requirement (including statutory, regulatory, or other citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The 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 or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Condition: Timecards for employees submitted to substantiate funding for the federal program were not consistently reviewed and approved at Ascension, Michigan. Cause: Timecards were processed without manager approval at Ascension, Michigan. Effect or potential effect: Expenses may be charged to the federal award that are not in compliance with the federal or pass-through grant agreement. Questioned costs: $0 Context: For 14 (totaling $24,083) of 35 (totaling $60,085) (40%) payroll timecards sampled for the Michigan location during the fiscal year, the employee’s timecard did not have evidence of review and approval by the employee’s manager. For Assistance Listing No. 21.027, total payroll costs for the Michigan location were $5,625,000, representing 77% of total federal expenditures of $7,292,682 reported in the schedule of expenditures of federal awards (SEFA) for the year ended June 30, 2024. Identification as a repeat finding, if applicable: The finding is a repeat finding from the prior year (2023-002). Recommendation: Ascension, Michigan should reinforce the importance of adhering to its internal controls over the review and approval of timecards. Views of responsible officials: Ascension, Michigan will reinforce the importance of timely approval of timecards for those participating in grant activities. For this grant, Ascension, Michigan was allowed to identify eligible expenditures retrospectively; thus, grant-specific approval processes were not performed. All expenditures submitted for reimbursement were validated for adherence to the terms and conditions of the award.