Finding 2024-002 – A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles,
and C. Cash Management
Identification of the federal program:
Federal Agency: U.S. Department of Agriculture
Assistance Listing No.: 10.557 – Special Supplemental Nutrition Program for Women, Infants,
and Children (WIC)
Pass-through Entity and Award Periods: Indiana Department of Health – October 1, 2023
through September 30, 2024, and October 1, 2024 through September 30, 2025
Criteria or specific requirement (including statutory, regulatory, or other citation): Section
200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform
Guidance) states the following regarding internal control: “The non-Federal entity must:
(a) Establish, document, and maintain effective internal control over the Federal award that
provides reasonable assurance that the recipient or subrecipient is managing the Federal
award in compliance with Federal statutes, regulations, and the terms and conditions of the
Federal award. These internal controls should align with the guidance in “Standards for
Internal Control in the Federal Government” issued by the Comptroller General of the United
States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).”
Under the grant agreement, WIC grantees are required to submit claims to the State within
20 calendar days following the end of the month in which work on or for the project was
performed. The allowable costs are outlined per the grant agreement, which explicitly
indicates that salaries and fringe benefits are allowable for the personnel and positions within
the agreement.
Condition: Indiana University Health, Inc. and Subsidiaries received reimbursement for
$3,035.95 in ineligible salaries and fringe benefits expenditures under the Indiana
Department of Health Special Supplemental Nutrition Program for Women, Infants, and
Children (WIC) grant for the period October 1, 2024 through September 30, 2025. The
ineligible expenditures were submitted for reimbursement for October 2024 and related to
ineligible salaries and fringe benefits for an employee who had transferred into the WIC
program during the month. Due to the timing of the transfer, which occurred mid-month,
ineligible salaries and fringe benefits of $3,035.95 from the non-grant-funded position held
by the individual for the portion of the month prior to the transfer were erroneously included
in the request for reimbursement.
The Principal Investigator and Grants Accounting failed to exclude from the reimbursement
request the identified salaries and fringe benefits that they identified as being related to the
pay period prior to the employee’s transfer, and, as a result, ineligible expenditures were
requested for reimbursement.
Cause: Indiana University Health, Inc. and Subsidiaries’ internal control over the review of WIC
expenditures and requests for reimbursement was not operating effectively during the year
ended December 31, 2024.
Effect or potential effect: Ineligible salaries and fringe benefits expenditures were submitted
for reimbursement and reimbursed.
Questioned costs: None.
Context: Indiana University Health, Inc. and Subsidiaries were reimbursed for $3,035.95 in
ineligible salaries and fringe benefits expenditures under the WIC program during the year
ended December 31, 2024. We selected 25 monthly WIC expenditures, totaling $1,612.24,
for purposes of allowability and cash management compliance testing. For each expenditure,
we obtained and reviewed support for the expenditure eligibility under the WIC grant, and we
also traced the expenditure to the WIC claims workbook and request for reimbursement. In
performing this procedure, we identified that Indiana University Health, Inc. and Subsidiaries
had incorrectly included two pay periods of ineligible salaries and fringe benefits in the
October 2024 request for reimbursement, and, as a result, ineligible expenditures were
reimbursed.
Through discussion with management, it was determined that the ineligible expenditures related
specifically to the process for identifying inter-departmental transfers and reconciling
adjustments to salaries and fringe benefits for any ineligible salaries and fringe benefits within the pay period to the request for reimbursement.
Total federal expenditures for Assistance Listing No. 10.557 totaled $1,699,733 for the year
ended December 31, 2024.
Identification as a repeat finding, if applicable: This is not a repeat finding.
Recommendation: Indiana University Health, Inc. and Subsidiaries should ensure that the
monthly requests for reimbursement include any expenditures identified in the monthly review
and any necessary action is taken for any discrepancies identified during the preparation prior
to submission for reimbursement.
Views of responsible officials: Indiana University Health, Inc. and Subsidiaries agree that
ineligible expenditures were included in the October 2024 WIC request for reimbursement.
Management has evaluated processes and procedures and made necessary changes to
identify new or transferred employees and to ensure any ineligible salaries and fringe benefits
are not submitted for requests for reimbursement in future periods. Furthermore, Indiana
University Health, Inc. and Subsidiaries reviewed submitted salaries and fringe benefits for all
employees who transferred into the WIC program during the grant periods and concluded that
expenditures submitted for these employees were in compliance with the grant agreements