Finding 1220156 (2025-001)

Material Weakness Repeat Finding
Requirement
ABH
Questioned Costs
-
Year
2025
Accepted
2026-06-29
Audit: 405309
Organization: Memorial Hospital at Gulfport (MS)

AI Summary

  • Core Issue: Timesheets for independent contractors were not reviewed and approved by management, leading to potential unauthorized charges.
  • Impacted Requirements: Compliance with 2 CFR 200.430(i) and 2 CFR 200.303 regarding documentation and internal controls over federal grants.
  • Recommended Follow-Up: Enforce the policy for supervisory review and approval of timesheets to ensure accuracy and validity of recorded hours.

Finding Text

Finding 2025-001- Allowable Activities/Costs and Period of Performance Significant Deficiency in Internal Control over Compliance Federal Assistance Listing Number: 97.036 – COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) Federal Award Identification Number: 4528DR-MS (2020) Federal Agency: U.S. Department of Homeland Security Pass-through Entity: Mississippi Emergency Management Agency Criteria: Per 2 CFR 200.430(i), personnel costs charged to federal grants are required to be supported by documentation including time records. Per 2 CFR 200.303, a non-federal entity must establish and maintain effective internal control over Federal awards that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and terms and conditions of the Federal award. Condition: Our audit procedures over contracted personnel services disclosed that timesheets supporting the invoices from independent contractors were not reviewed and approved by a supervisor at the Hospital. Cause: The absence of proper approval for the timesheets tested appears to be lack of management oversight. Effect: Since the timesheet is the support for the invoices charged by the independent contractors, unauthorized charges can result from undocumented reviews and approvals. Questioned Costs: No questioned costs were identified due to finding only being a deficiency in internal control with no noncompliance. Perspective: Four timesheets in a sample of fifty-nine timesheets were not approved by management. The sample was not a statistically valid sample. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Hospital enforce their policy requiring supervisory review and approval for timesheets to ensure time recorded by independent contractors is valid and accurate for work performed. View of Responsible Officials: See management’s response to the finding in the accompanying Corrective Action Plan.

Corrective Action Plan

Management’s Action Plan: Management concurs with the findings. The deficiency was due to a lapse in management oversight related to the review and approval of independent contractor timesheets. To strengthen internal controls and ensure compliance with federal requirements, management has implemented corrective actions through the full implementation of a new enterprise resource planning system, Fusion. Under this process, all timecards are now entered, reviewed, and approved directly within Fusion and cannot be processed for payment unless they have been formally approved by appropriate management personnel. This ensures proper documentation, accountability, and adherence to internal control policies. Name of Person Responsible for the Plan: Katherine Hill, Manager of Accounting Jason Lynn, Vice President of Finance and Controller Anticipated Completion Date of the Plan: Completed – fully implemented with the rollout of the Fusion system (May 2025).

Categories

Internal Control / Segregation of Duties Subrecipient Monitoring Allowable Costs / Cost Principles Period of Performance Significant Deficiency Matching / Level of Effort / Earmarking

Programs in Audit

ALN Program Name Expenditures
97.036 COVID-19 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $788,833
21.027 COVID -19 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $110,942
93.898 CANCER PREVENTION AND CONTROL PROGRAMS FOR STATE, TERRITORIAL AND TRIBAL ORGANIZATIONS $21,065
97.008 NON-PROFIT SECURITY PROGRAM $6,147