FAC Explorer

Finding 1132588 (2024-001)

Significant Deficiency Repeat Finding
Requirement
LNP
Questioned Costs
-
Year
2024
Accepted
2025-04-28
Audit: 354818
Organization: Baystate Medical Center, Inc. (MA)
Auditor: Deloitte & Touche LLP

AI Summary

  • Core Issue: Significant deficiencies in internal controls over compliance for the Research and Development Cluster were identified, indicating a lack of effective design and implementation.
  • Impacted Requirements: Compliance with Title 2 U.S. CFR Part 200, specifically Sections 200.302-303, was not met due to inadequate documentation, undefined roles, and ineffective reviews.
  • Recommended Follow-Up: Assess and redefine roles in Sponsored Programs Administration, develop and maintain comprehensive policies, and ensure timely documentation to strengthen internal controls.

Finding Text

Finding 2024-001—Significant Deficiency in Internal Controls over Compliance: Research and Development Cluster Program—Research and Development Cluster (R&D) Criteria—Compliance with the financial management and internal control requirements outlined in Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Sections 200.302-303 (“Section 200.302-303”) is required for all federal awards. Section 200.302-303 outlines the various requirements around documentation and internal controls. Condition and Context—Baystate Health’s internal controls over R&D allowable costs, special tests and provisions, and subrecipient monitoring in accordance with Section 200.302-303 were not appropriately designed and implemented or operated effectively. Specifically, during the 2024 audit, the following conditions were identified: • In instances, controls, as described below, exhibited the following: o Certain roles and responsibilities within the Sponsored Programs Administration (SPA) were inadequately defined and not understood by control owners o inconsistent documentation evidencing review over R&D compliance requirements o lack of a central repository for documentation related to the performance of internal control procedures and compliance with grant requirements o ineffective review of key personnel labor distributions o Insufficient internal review of grant budgets concerning the indirect cost rate and salary cap authorized for individual federal awards • The testing of internal controls over subrecipient monitoring identified an absence of underlying documentation. For three out of nine subrecipient selections there were no records maintained to document the completion and outcomes of the subrecipient risk assessment. For nine out of nine subrecipient selections there was no documentation retained evidencing Baystate Health’s review of subrecipient’s most recent audit information, or of Baystate Health’s review of the subrecipients’ compliance with registration, suspension and debarment requirements. • Testing of annual salary distribution requirements for key personnel documentation identified three out of 60 selections where the records were incomplete. These three selections account for two key personnel working within the oncology group. It was further identified that the total salary allocation of approximately $177 thousand for a total of four key personnel in the oncology group for fiscal year ended September 30, 2024, lacked underlying support substantiating the amounts allocated to federal grants. • The SPA intake form includes key grant data and is used for updating indirect cost rates in the general ledger system. For one out of 12 selections of indirect costs, testing identified that the indirect cost rate in the accounting system was outdated. The SPA intake form was initiated for the indirect cost rate changes but was not internally submitted in a timely manner. Consequently, the actual indirect cost was allocated at a lower rate than authorized. • Documentation evidencing internal review of monthly labor distribution and budget to actual reports was not maintained. Additionally, this monthly review failed to detect key personnel whose effort form was not properly set up for certification purposes. Seven out of 120 special tests selections were identified to have missing effort forms. These seven selections represent three key personnel actively working on federal grants. Management further identified a total of 89 key personnel lacking effort forms, among which 37 key personnel have actively contributed efforts to federal awards. • For 20 out of 60 National Institute of Health salary cap selections related to special tests and provisions, the salary cap rate used for the calculation of salary cap for individual personnel was outdated and did not align with the authorized salary cap rate in the grant agreement. This results from ineffective review of grant budgets for updated rate information. These control deviations when considered in the aggregate are indicative of a significant deficiency in the design, implementation, and operating effectiveness of the internal controls. Questioned Costs—none New Finding—No, repeat finding reference number 2023-001 Cause—Personnel responsible for internal controls over compliance related to R&D were not adequately aware of the documentation requirements of Section 200.302-303. Additionally, the internal control framework is not clearly defined and relies heavily on manual control processes that were inconsistently implemented and documented. Reviews were not performed at a precise enough level and on a timely basis. Effect—Failures in internal controls have the potential to result in instances of noncompliance with R&D grant requirements. Recommendation— The deficiencies in internal controls identified during the audit related to R&D indicates that the controls over compliance for R&D should be assessed and, where necessary, corrective action needs to be taken to enable Baystate Health to produce appropriate supporting documentation on a timely basis and maintain appropriate internal controls over all compliance requirements. Specifically, we recommend that: • The roles and responsibilities of the individuals involved in the SPA should be challenged to ensure that all critical functions are addressed; the distribution of responsibilities is appropriate; and positions include an element of cross‐training. The capabilities of the individuals and the level of resources should be assessed to make sure that they are consistent with the responsibilities assigned. • Policies and procedures should be developed, documented and maintained/updated for all significant grant-related activities. On-going monitoring should take place to assure that such policies and procedures are executed accurately. Internal controls could be enhanced by standardizing best practices and providing ongoing training regarding federal requirements over compliance and documentation. • A system should be implemented to maintain documentation related to internal controls and compliance requirements for federal grants in such a way that this documentation is easily accessible and clearly interpretated. • The process for calculating and reviewing salary cap requirements should be revised to include a check that the reports reviewed as part of the control process are complete and accurate. • Controls should be implemented consistently to facilitate a timely review of indirect cost rates at the time of initial execution and revision of grant budgets within the general ledger.

Categories

Subrecipient Monitoring Allowable Costs / Cost Principles Procurement, Suspension & Debarment Special Tests & Provisions

Other Findings in this Audit

  • 556099 2024-001
    Significant Deficiency Repeat
  • 556100 2024-001
    Significant Deficiency Repeat
  • 556101 2024-001
    Significant Deficiency Repeat
  • 556102 2024-001
    Significant Deficiency Repeat
  • 556103 2024-001
    Significant Deficiency Repeat
  • 556104 2024-001
    Significant Deficiency Repeat
  • 556105 2024-001
    Significant Deficiency Repeat
  • 556106 2024-001
    Significant Deficiency Repeat
  • 556107 2024-001
    Significant Deficiency Repeat
  • 556108 2024-001
    Significant Deficiency Repeat
  • 556109 2024-001
    Significant Deficiency Repeat
  • 556110 2024-001
    Significant Deficiency Repeat
  • 556111 2024-001
    Significant Deficiency Repeat
  • 556112 2024-001
    Significant Deficiency Repeat
  • 556113 2024-001
    Significant Deficiency Repeat
  • 556114 2024-001
    Significant Deficiency Repeat
  • 556115 2024-001
    Significant Deficiency Repeat
  • 556116 2024-001
    Significant Deficiency Repeat
  • 556117 2024-001
    Significant Deficiency Repeat
  • 556118 2024-001
    Significant Deficiency Repeat
  • 556119 2024-001
    Significant Deficiency Repeat
  • 556120 2024-001
    Significant Deficiency Repeat
  • 556121 2024-001
    Significant Deficiency Repeat
  • 556122 2024-001
    Significant Deficiency Repeat
  • 556123 2024-001
    Significant Deficiency Repeat
  • 556124 2024-001
    Significant Deficiency Repeat
  • 556125 2024-001
    Significant Deficiency Repeat
  • 556126 2024-001
    Significant Deficiency Repeat
  • 556127 2024-001
    Significant Deficiency Repeat
  • 556128 2024-001
    Significant Deficiency Repeat
  • 556129 2024-001
    Significant Deficiency Repeat
  • 556130 2024-001
    Significant Deficiency Repeat
  • 556131 2024-001
    Significant Deficiency Repeat
  • 556132 2024-001
    Significant Deficiency Repeat
  • 556133 2024-001
    Significant Deficiency Repeat
  • 556134 2024-001
    Significant Deficiency Repeat
  • 556135 2024-001
    Significant Deficiency Repeat
  • 556136 2024-001
    Significant Deficiency Repeat
  • 556137 2024-001
    Significant Deficiency Repeat
  • 556138 2024-001
    Significant Deficiency Repeat
  • 556139 2024-001
    Significant Deficiency Repeat
  • 556140 2024-001
    Significant Deficiency Repeat
  • 556141 2024-001
    Significant Deficiency Repeat
  • 556142 2024-001
    Significant Deficiency Repeat
  • 556143 2024-001
    Significant Deficiency Repeat
  • 556144 2024-001
    Significant Deficiency Repeat
  • 556145 2024-001
    Significant Deficiency Repeat
  • 556146 2024-001
    Significant Deficiency Repeat
  • 1132541 2024-001
    Significant Deficiency Repeat
  • 1132542 2024-001
    Significant Deficiency Repeat
  • 1132543 2024-001
    Significant Deficiency Repeat
  • 1132544 2024-001
    Significant Deficiency Repeat
  • 1132545 2024-001
    Significant Deficiency Repeat
  • 1132546 2024-001
    Significant Deficiency Repeat
  • 1132547 2024-001
    Significant Deficiency Repeat
  • 1132548 2024-001
    Significant Deficiency Repeat
  • 1132549 2024-001
    Significant Deficiency Repeat
  • 1132550 2024-001
    Significant Deficiency Repeat
  • 1132551 2024-001
    Significant Deficiency Repeat
  • 1132552 2024-001
    Significant Deficiency Repeat
  • 1132553 2024-001
    Significant Deficiency Repeat
  • 1132554 2024-001
    Significant Deficiency Repeat
  • 1132555 2024-001
    Significant Deficiency Repeat
  • 1132556 2024-001
    Significant Deficiency Repeat
  • 1132557 2024-001
    Significant Deficiency Repeat
  • 1132558 2024-001
    Significant Deficiency Repeat
  • 1132559 2024-001
    Significant Deficiency Repeat
  • 1132560 2024-001
    Significant Deficiency Repeat
  • 1132561 2024-001
    Significant Deficiency Repeat
  • 1132562 2024-001
    Significant Deficiency Repeat
  • 1132563 2024-001
    Significant Deficiency Repeat
  • 1132564 2024-001
    Significant Deficiency Repeat
  • 1132565 2024-001
    Significant Deficiency Repeat
  • 1132566 2024-001
    Significant Deficiency Repeat
  • 1132567 2024-001
    Significant Deficiency Repeat
  • 1132568 2024-001
    Significant Deficiency Repeat
  • 1132569 2024-001
    Significant Deficiency Repeat
  • 1132570 2024-001
    Significant Deficiency Repeat
  • 1132571 2024-001
    Significant Deficiency Repeat
  • 1132572 2024-001
    Significant Deficiency Repeat
  • 1132573 2024-001
    Significant Deficiency Repeat
  • 1132574 2024-001
    Significant Deficiency Repeat
  • 1132575 2024-001
    Significant Deficiency Repeat
  • 1132576 2024-001
    Significant Deficiency Repeat
  • 1132577 2024-001
    Significant Deficiency Repeat
  • 1132578 2024-001
    Significant Deficiency Repeat
  • 1132579 2024-001
    Significant Deficiency Repeat
  • 1132580 2024-001
    Significant Deficiency Repeat
  • 1132581 2024-001
    Significant Deficiency Repeat
  • 1132582 2024-001
    Significant Deficiency Repeat
  • 1132583 2024-001
    Significant Deficiency Repeat
  • 1132584 2024-001
    Significant Deficiency Repeat
  • 1132585 2024-001
    Significant Deficiency Repeat
  • 1132586 2024-001
    Significant Deficiency Repeat
  • 1132587 2024-001
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $5.26M
21.027 Coronavirus State and Local Fiscal Recovery Funds $1.93M
16.575 Crime Victim Assistance $1.06M
93.969 Pphf Geriatric Education Centers $780,620
93.387 National and State Tobacco Control Program $727,456
93.837 Cardiovascular Diseases Research $668,454
93.884 Primary Care Training and Enhancement $413,136
93.283 Centers for Disease Control and Prevention Investigations and Technical Assistance $404,280
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $375,836
16.320 Services for Trafficking Victims $322,602
93.865 Child Health and Human Development Extramural Research $280,763
20.616 National Priority Safety Programs $241,395
93.917 Hiv Care Formula Grants $232,841
93.866 Aging Research $226,934
17.268 H-1b Job Training Grants $198,070
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $142,370
93.242 Mental Health Research Grants $132,723
16.817 Byrne Criminal Justice Innovation Program $127,520
93.226 Research on Healthcare Costs, Quality and Outcomes $125,150
93.940 Hiv Prevention Activities Health Department Based $118,849
93.393 Cancer Cause and Prevention Research $117,761
93.110 Maternal and Child Health Federal Consolidated Programs $115,543
93.247 Advanced Nursing Education Workforce Grant Program $100,634
93.107 Area Health Education Centers $92,441
93.224 Health Center Program (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $90,307
93.121 Oral Diseases and Disorders Research $89,918
93.266 Health Systems Strengthening and Hiv/aids Prevention, Care and Treatment Under the President's Emergency Plan for Aids Relief $86,767
93.788 Opioid Str $86,614
11.040 Distressed Area Recompete Pilot Program $77,844
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $74,999
17.259 Wioa Youth Activities $47,765
93.310 Trans-Nih Research Support $46,568
32.011 Affordable Connectivity Outreach Grant Program $42,372
47.084 Nsf Technology, Innovation, and Partnerships $34,782
93.398 Cancer Research Manpower $34,672
93.860 Emerging Infections Sentinel Networks $25,736
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $25,694
93.172 Human Genome Research $25,413
93.838 Lung Diseases Research $24,985
93.399 Cancer Control $13,512
93.350 National Center for Advancing Translational Sciences $13,456
93.279 Drug Use and Addiction Research Programs $7,527
93.855 Allergy and Infectious Diseases Research $5,867
93.395 Cancer Treatment Research $2,900
93.840 Translation and Implementation Science Research for Heart, Lung, Blood Diseases, and Sleep Disorders $2,295
16.738 Edward Byrne Memorial Justice Assistance Grant Program $1,232