Finding Text
Federal Agencies: Department of Health and Human Services Federal Assistance Listing Numbers: 93.224 & 93.527 Program: Health Center Program Cluster, COVID-19 Health Center Program Cluster Award/Pass-Through Entity Identifying Numbers: H80CS10606-16-00, H80CS10606-17-04, H80CS10606-17-05, H8GCS48224, H8L50900-01-00, H8NCS53911-01-04 Criteria: The Uniform Guidance in 2 CFR §200.303 requires that non-Federal entities receiving Federal awards (i.e., auditee management) establish and maintain internal control designed to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award. Per 2 CFR §200.403(e), costs must be in accordance with Generally Accepted Accounting Procedures (GAAP) to be allowable under Federal awards. Condition: During our testing of 2024 costs, we noted that 3 of the 60 payroll transactions selected for testing within the Health Center Program Cluster were incurred in 2023. This practice is not in accordance with GAAP, which require that costs be recorded in the period in which they are incurred. Cause: The Village did not have adequate policies and procedures in place to ensure that federal expenditures are properly accrued and recorded in the fiscal year in which the costs are actually incurred. Effect or Potential Effect: Failure to accrue costs in accordance with GAAP may result in expenditures being materially misstated on the SEFA that could lead to inaccurate reporting to the federal agencies. Questioned Costs: Health Center Program Cluster Known Questioned Costs: $473 Health Center Program Cluster Likely Questioned Costs: $26,444 Context: This is a condition identified per review of the Village’s compliance with specified requirements not using a statistically valid sample. Payroll costs including fringe benefits for the Health Center Program Cluster in 2024 were $1,714,998. Repeat Finding: 2023-001 Recommendation: We recommend Village implement policies and procedures to accrue for federal expenditures in the period the costs were incurred to ensure costs are being recorded in accordance with GAAP and the SEFA is representative of all federal expenditures incurred in the reporting year. Views of Responsible Officials: