Finding Text
Criteria or Specific Requirement: In accordance with 2 CFR 200.430, compensation for personal
services must be based on records that accurately reflect the work performed and must be supported by a
system of internal controls that provides reasonable assurance that the charges are accurate, allowable,
and properly allocated.
Condition: During the testing of allowable costs, we determined that Solvista Health submitted payroll
expenditures for reimbursement that exceeded recalculated amounts based on underlying payroll records,
timesheets, and approved pay rates.
Context: Payroll expenditures submitted for reimbursement were in excess of actual payroll amounts per
the employees’ time sheets and approved pay rates.
Questioned Costs: $3,268 consisting of payroll expenditures submitted for reimbursement in excess of
actual payroll expenditures per supporting documents.
Cause: The variance appears to have resulted from a lack of sufficient internal controls over the accurate
calculation and review of payroll costs charged to the federal program. In particular, Solvista Health did
not implement a process for the review and approval for the final payroll costs submitted for
reimbursement, which resulted in errors.
Effect: Failure to submit accurately calculated payroll expenditures to the federal program, may result in
noncompliance with federal regulations over allowable costs, as well as questioned costs related to the
incorrectly submitted payroll expenditures.
Identification as a Repeat Finding: Not a repeat finding.
Recommendation: We recommend that Solvista Health implement a system of internal controls that are
designed and operating to provide an accurate calculation of payroll costs incurred under the federal
programs, including review and monitoring of process and procedures. In addition, documentation
ensuring accurate payroll costs allocated to federal programs, along with support of review and approval
of such expenditures, should be retained in accordance with federal regulations.