Finding Text
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6 G28RH46259-02-01, September 1, 2023 – August 31, 2024 Award No. 6 G28RH46259-03-01, September 1, 2024 – August 31, 2025 Award No. 4 HBIRH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Allowable Costs/Cost Principles (45 CFR 75.403) Condition – Certain costs were charged to more than one federal award program in the current period. Cause – Salaries and wages are charged to federal awards through separate manual tracking worksheets for each award. Additionally, although salaries and wages are allocated to grants in the Organization’s accounting system, the allocation only occurs at a summary level, moving all costs from administrative rather than where they were recorded. Effect or potential effect – The Organization charged payroll expenditures to more than one federal award. Questioned costs – $42,988. Questioned costs were determined by identifying all employees who appeared on more than one grant expenditure listing and reviewing the specific payroll periods charged to each award for duplicates. Questioned costs by federal award identification number are: Award No. 6 G28RH46259-02-01 – $7,401 Award No. 6 G28RH46259-03-01 – $12,752 Award No. 4 HBIRH47071-03-02 – $22,835 Context – Salaries and wages for three employees of the Organization were identified as being charged to both Health Center Program Cluster base grant (Award No. 6 H80CS00703- 23-16) and one of the awards identified above. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should consolidate tracking of salaries and wages charged to federal awards into a single listing for each pay period rather than separate worksheets for each award. The Organization should support the distribution of employees’ salaries and wages amongst federal awards to accurately reflect the work performed through the timekeeping system and payroll records. Views of responsible officials and planned corrective actions – Issues identified during the audit were indicative of an overall lack of controls and processes to ensure no double dipping occurs. The new CFO along with the newer members of the Finance Department have developed better controls and processes to ensure grant expenditures, including payroll expenses and allocations, are properly accounted for in the accounting system with adequate backup of grant draw downs. With the implementation of a new payroll system and a new accounting system in 2026, these issues should resolve themselves with oversight provided by the CFO. The Organization’s CEO, a former CFO of the organization, will continue to provide oversight for the Finance Department to ensure controls and processes are implemented.