Finding Text
2022-003 Improve Internal Controls Over Timesheet Approvals
Federal Program Information
Federal Agency: Department of Health and Human Services, Centers for Disease Control and Prevention
Award Name(s): Injury Prevention and Control Research and State and Community Based Programs; Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises
Assistance Listing Number(s): 93.136, 93.391
Award Year: 2022
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding
Internal Control over Compliance – Significant Deficiency
Criteria or Specific Requirement
Grantees must provide reasonable assurance that federal awards are expended only for allowable activities and that the costs charged to federal awards are allowable and in accordance with the applicable cost principles. Management of the Organization is also responsible for establishing and maintaining effective internal control over compliance with federal requirements that have a direct and material effect on a federal program. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of perform¬ing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.
Condition and Context
During our audit, we tested a sample of forty payroll transactions for each assistance listing number in order to determine if charges were properly approved prior to disbursement. As a result of our testing, it was identified that three of the Executive Director’s timesheets were not approved by a knowledgeable individual under assistance listing number 93.136, and three were not approved under assistance listing number 93.391.
Cause
The Organization did not have adequate controls in place to ensure approval over all timesheets prior to disbursement and application to federal awards.
Effect or Potential Effect
Due to the weakness in internal controls noted above, there is a risk that amounts charged to federal awards could not be allowable or in accordance with applicable cost principles. No questioned costs are reported as the auditor obtained approved salary documentation and recalculated the Executive Director’s gross pay and application to federal awards without exception.
Recommendation
The Organization should address the weaknesses in internal controls noted above in order to provide reasonable assurance that federal awards are expended only for allowable activities, and that the costs charged to federal awards are allowable and in accordance with the applicable cost principles. The Organization should implement controls to ensure that all timesheets are approved to ensure allowability of the costs applied to the federal award.
Views of Responsible Official
Management agrees with the finding. Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.