Finding Text
(3) Findings and Questions Costs Relating to Federal Awards Finding 2025-001 Federal Program Title - Cancer Control Assitance Listing No. - 93.399 Federal Agency - Department of Health and Human Services - Passed through Marshfield Clinic Federal Award Identification - JHKBV97FZUC5 Grant Award Period - July 1, 2024 through June 30, 2025 Compliance Requirement - Allowable costs/Cost principles, Special Tests and Provisions Criteria: Section 2 CFR section 200.430(d)(2) states allowable compensation for certain employees is subject to a ceiling in accordance with Federal statute. Per NIH Grants Policy Statement, direct salaries of individuals in exces of the rate prescribed in the governing Appropriation Act for NHI will be adjusted in accordance with the legislative salary limitation. Condition found: During our testing of employee compensation of 25 employees, we identified 6 employees compensation exceeded the NIH salary cap provisions as follows: Salaries $161,894 - Fringe benefits $45,330 - Indirect costs $20,723 - Total $227,947 Further, we noted FTCH did not have adequately effective controls in place to ensure FTCH complies with the NIH salary cap provisions. Cause: In discussing these conditions FTCH management stated that based on documentation received as a passthrough entity, they were unaware of the NIH salary cap being applicable. As a result, a control related to the application of the NHI salary cap provisions was not put in place and therefore not operating effectively. Possible Asserted Effect: Failure to adhere to NIH salary cap provisions resulted in unallowable costs being applied to the grant, including salary and associated fringe benefits and indirect costs. Questioned Costs: $227,947 Repeat Finding: A similar finding was not reported in the prior year's audit. Statistical Sampling: The sample was not intended to be, and was not, a statistically valid sample. Recommendation: We recommend FTCH strengthen processes and develop internal controls to ensure FTCH is appropriately monitoring and aplying NHI salary caps. View of Responsible Official: The Organization concurs with this finding. We acknowledge that salary cap limitations were not applied correctly during the period under review and have implemented enhanced controls to prevent recurrence. These corrective actions include strengthened review procedures, augmented pre-submission compliance checks, and targeted traning for staff involved in grants and financial administration. These measurs will be fully in place by May 31, 2026 to ensure consistent and accurate application of NIH salary cap requirements gong forward. The Organization remains committed to strong financial stewardship and full compliance with all applicable Federal regulations and award terms.