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Finding 2024-003 - Activities Allowed or Unallowed and Allowable Costs/Cost Principles - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and COVID-19 - Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care and Grants for New and Expanded Services Under the Health Center Program and COVID-19 - Grants for New and Expanded Services Under the Health Center Program Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Numbers and Years: H8FCS40832 - 2021, H80CS00626 - 2022, H8CS00626 - 2023, H8LCS51759 - 2023, H8KCS49691 - 2023, H8KCS49691 - 2024 Criteria In accordance with 2 CFR Section 200.303, Internal Controls, the nonFederal entity must: (a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the nonFederal entity is managing the Federal award in compliance with federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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). Condition During our audit, we noted that there was no evidence, such as a signature, evidencing review and approval by a direct supervisor of the timesheets and time and effort reports were not done. Cause There is no formal policy requiring timesheets and time and effort reports be approved by a direct supervisor and evidence of approval retained. Effect or Potential Effect The condition could result in inaccuracies in the allocation of salaries to the federal grants or unallowable costs being charged. Questioned Costs None. Context Two exceptions from a statistically valid sample of two. Identification as Repeat Finding Yes (see prior year finding number 2023-004) Recommendation We recommend that management put in place a formal policy requiring all timesheets be approved by a direct supervisor and that evidence of that approval be retained. We also recommend a time and effort report be done for every employee and be approved by a direct supervisor and that evidence of the approval be retained. Views of Responsible Officials BCHN has put together a training program for employees to ensure that timecards are reviewed and approved by both the employee and the supervisor on a bi-weekly basis. Before payroll is processed, approvals by employees and supervisors will be checked. HR will provide a monthly time and effort report to the finance team. This report will provide total number of hours worked by each employee for each assigned cost center.