Finding Text
Federal program information:
Funding agency: U.S. Department of Health and Human Services
Title: Rural Health Care Services Outreach Grant
Program
Assistance listing number: 93.912
Award year: 7/1/2023 – 6/30/2024
Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award, and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Additionally, according to 2 CFR Part 200.430, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, and comply with established accounting policies and practices of the entity.
Condition: Accurate and complete records to support disbursements were not maintained for the program. We specifically noted that SFRC is currently allocating payroll costs to the program based on budget estimates. There is not a process in place to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate.
Context: Seven of seven payroll transactions tested were allocated to the program based on budget estimates.
Questioned Costs: Undeterminable
Cause: SFRC has not developed a process to compare the budget estimates to actual time and effort to ensure that budget estimates are accurate.
Effect: SFRC may not be able to demonstrate that costs charged to federal programs are allowable.
Auditor’s Recommendation: SFRC should implement a process of comparing actual time and effort of employees to SFRC’s budget estimates at least bi-annually. Alternatively, SFRC could require employees to report their actual daily time on federal awards to ensure amounts charged are accurate and properly allocated.
Management’s Response: Management is in the process of implementing a method for employees to charge their time to grants, as needed, from the payroll system.