Finding 1136920 (2024-004)

Finding 2024-004 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures Information on Federal Program: Criteria or Specific Requirement (Including Statutory, Regulatory, or Other Citation): Pursuant to OMB Compliance Requirement for Assistance Listing 93.224 Health Center Program Cluster – Allowance Costs/Cost Principles – Payroll, costs charged to federal funds under Health Center Program award funds must comply with the cost principles of 45 CFR part 75, subpart E, and any other requirements or restrictions on the use of federal funding. Conditions: For five out of eight employees selected for testing covering five different payroll pay dates, MCHWC was not able to provide a pay rate change form approved by a personnel in the Human Resources department to support the employees pay rate. Questioned Costs: None. Context: Sampling was performed to draw sample selections. See condition above for context of the finding. Effect or Potential Effect: The lack of internal control over approving pay rate changes charged as payroll expenses to related grants resulted in the inability to test the relative compliance requirements under the grant provision. Cause: MCHWC does not have an adequate process in place to ensure that pay rate changes are properly approved by a personnel in the Human Resources department. Section III – Federal Awards Findings and Questioned Costs (Continued) A. Current Year Findings and Questioned Costs – Major Federal Award Program Audit (Continued) Finding 2024-004 – Allowable Costs/Cost Principles – Internal Control over Payroll Expenditures (Continued) Identification as Repeat Finding, if Applicable: Not applicable. Recommendation: We recommend that MCHWC establish proper internal controls to ensure that pay rate changes are approved by a personnel in the human resources department. View of Responsible Officials and Planned Corrective Actions: MCHWC understands and agrees with the finding. Measures have been taken or will be taken for immediate resolution and the following steps will be implemented: a) Senior Human Resource Staff will prepare Personnel Action Forms. b) Director of Human Resources will review and recommend. c) Payroll Manager will approve.