Finding 1117480 (2024-002)

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.268 Pass-through Agency: Pennsylvania Department of Health Pass-through Number: 4100090652 Award Period: July 1, 2021 - June 30, 2025 Compliance Requirement Affected: Allowable Costs Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria: 3 CFR Part 200 Subpart E General Provisions for Selected Items of Cost Section 200.430 Compensation – requires charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates determined before the services are performed alone do not qualify as support for charges to the federal awards. The Chapter’s system of internal controls should include processes to perform periodic after-the-fact reviews of interim charges made to a federal award based on budget estimates. All necessary adjustments must be made so that the final amount charged to the federal award is accurate, allowable, and properly allocated. Condition: During our testing, we noted the Chapter charges fringe benefits to the program based on an estimated allocation on the percentage of salaries as determined in the contract budget. However, we noted the Chapter does not have internal controls in place to provide a review of the actual fringe benefits incurred. Questioned Costs: No questioned costs above the $25,000 threshold have been identified. Context: During our testing, we noted the Chapter charges fringe benefits to the programs based on an estimated allocation on the percentage of salaries as determined in the contract budget. Cause: The Chapter does not have internal controls in place to provide a review of the actual fringe benefits incurred. Effect: Allocated costs that are not appropriately budgeted and invoiced could result in inaccurate reporting and misrepresentation of the program's expenses. Inaccurate reporting of expenses can result in noncompliance with federal regulations, which may lead to the requirement to return funds to the federal agency. Repeat Finding: N/A: Not a repeat finding. Recommendation: We recommend Pennsylvania Chapter, American Academy of Pediatrics establish a process for periodic after-the-fact reviews of interim charges made to federal awards based on budget estimates. Based on the review, management should make any necessary adjustments to the interim charges based on the results of the periodic reviews. This would ensure that the final amount charged to the federal award is accurate, allowable, and properly allocated. Viewed of Responsible Officials and Planned Corrective Actions: Please refer to Pennsylvania Chapter, American Academy of Pediatrics Corrective Action Plan.