Finding Text
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries/wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During testing, we identify payroll charges that were unsupported by timesheets. The error identified during testing indicates that timesheets were not adequately reviewed and approved prior to payroll processing. Questioned costs: None. Context: Of the seven samples selected for testing, we noted that one sample had a variance between the hours reported on the timesheet compared to the hours paid out on the payroll register. Cause: The Association did not have effective internal controls in place to ensure that payroll charges were supported by actual hours worked. Effect: The Association could expend federal funding for unallowable activities and costs related to payroll. Funding could be used by employees in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring timesheets and payroll registers to be reviewed and approved, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.