Finding Text
2023 – 007 Federal agency: U.S. Department of Health and Human Services Federal program title: Health Centers Cluster Assistance Listing Numbers: 93.224/93.527 Award Period: Varying project and budget periods: 2/1/22 – 1/31/23, 2/1/23 – 1/31/24, 4/1/21 – 3/31/23 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: In our audit testing around payroll expenditures, the Organization was not able to provide supporting documentation of the internal control process occurring where supervisors review and approve employee timesheets with each payroll. Questioned costs: None. Context: The Organization changed its payroll system during the year, and historic timesheet data, including documentation of approval on timesheets, was not retained in the transition. Therefore in our testing of 38 payroll transactions, we were able to get support for the underlying expenses to support an eligible grant expenditure, but not able to obtain support of the internal control occurring of supervisor approval of time. Cause: Payroll system transition resulted in loss of historic documentation on time sheets and supervisor approval. Effect: Without retained documentation, the Organization is not able to support the existence of internal controls in place. Recommendation: We recommend in the future the Organization retain documentation of key control processes occurring for a reasonable retention period to be able to support control activities around grant compliance and financial reporting. View of responsible officials: No disagreement with the finding. Management will retain timesheet documentation moving forward to support control process in place.