Finding No.: 2022-003
Federal Agency: U.S. Department of Health and Human Services
AL Program: 93.323 Epidemiology and Laboratory Capacity for Infectious Diseases
Federal Award No.: NU50CK000558
Questioned Costs: $550,115
Area: Allowable Costs/Cost Principles
Criteria:
Federal program expenditures should be necessary and reasonable for the performance of the Federal
award, in accordance with allowable costs/cost principles requirements, and be directly related to,
and in accordance with, program intent and objectives.
Condition 1:
For 13 (or 48%) of 27 non-payroll transactions tested, aggregating $1,844,265 of $2,468,210 in total
non-payroll program expenditures, the following deficiencies were noted:
Item #
Encumbrance/
Voucher # Cost Center # COVID Non-COVID Total
1 A25947 FK7608 $ 508 $ - $ 508
2 C15643 FL7615 65,304 - 65,304
3 C14915 FL7615 60,136 - 60,136
4 C16301 FL7615 21,852 - 21,852
5 C14911 FL7615 28,228 - 28,228
6 F00421 FL7615 2,561 - 2,561
7 C15761 FL7615 140,000 - 140,000
8 783849 FL7616 118,476 - 118,476
9 772535 FL7616 17,302 - 17,302
10 015030 FN7603 - 32,215 32,215
11 012629 FN7614 20,000 - 20,000
12 012612 FN7605 - 2,581 2,581
13 012613 FN7610 - 39,008 39,008
$ 474,367 $ 73,804 $ 548,171
Item # 1 pertains to airfare cost for a technician to install IT equipment at Ebeye hospital. Cost
allocation to the program was not supported.
Item # 2 pertains to IT equipment for which there was inadequate documentation to support cost
allocation to the program.
Item #s 3 through 5 pertain to construction-related costs which are specifically prohibited by the
grant.
Condition 1, continued:
Item # 6 pertains to a laptop purchased for use by a Procurement and Supply Division employee.
There was inadequate documentation to support charging the program for this purchase.
Item # 7 pertains to security services for which there was inadequate documentation to support cost
allocation to the program.
Item # 8 pertains to Ministry of Health and Human Services (MOHHS) communication expenditures
for which there was inadequate documentation to support cost allocation to the program.
Item #s 9 through 13 pertain to MOHHS utility expenditures for which there was inadequate
documentation to support cost allocation to the program.
Condition 2: For 3 (or 33%) of 9 payroll transactions tested, aggregating $12,595 of $412,500 in
total payroll program expenditures, the following deficiencies were noted:
Employee # 247926 was paid $50 (or 8 hours) for leave for pay period ended 7/30/2022;
such cost was not supported by an approved leave form.
Hazardous pay of $700 (check # 229052) was not supported by documented approval
authorizing cost allocation to the program for
general fund.
Employee # 97944 was paid $1,194 for overtime for pay-period ended 10/23/2021;
documented approval for such cost allocation to the program was not provided.
The above are expenditures under COVID cost centers and resulted in reportable questioned costs
of $1,944 because the projected questioned cost exceeds the $25,000 threshold.
Cause:
RepMar did not effectively monitor the validity and allowability of expenditures.
Effect:
RepMar is in noncompliance with allowable costs/cost principles requirements. The reportable
questioned cost is $476,311 (COVID) and $73,804 (non-COVID).
Recommendation:
RepMar management should strengthen monitoring controls so that expenditures are verified for
validity and allowability.
Views of Responsible Officials:
We agree with the finding and provide details in our Corrective Action Plan.