Finding Text
Finding 2024-011 Federal Agency: U.S. Department of Health and Human Services Assistance Listing: 93.224 – Health Center Program (Community Health Centers, Migrant Health Center Health Care for the Homeless, and Public Housing Primary Care). Federal Award No.: 5 H80CS04302-19-00, 6 H80CS04302-20-02, 2 H80CS04302-20-00, and H80CS04302-20-05 Area: Allowable Costs/Cost Principles Questioned Costs: $3,816 Criteria: Sections 200.403 and 200.430(g) of Title 2 of the CFR require adequately documented costs and compensation records that accurately reflect work performed. Section 200.302(b) requires financial records that identify the source and application of federal funds and permit transactions to be traced to the applicable award. Condition: 1. For 15 (25%) of 60 payroll transactions tested, from a sample totaling $62,084 and a population totaling $1,094,077, the State either (a) did not provide sufficient timekeeping support; (b) provided departmental records supporting fewer hours than the uniform timesheet; (c) had unexplained differences between regular and leave hours; or (d) did not provide support for retroactive regular pay, as follows: Condition: (continued) 2. Of the payroll transactions tested and cited above, we additionally noted the following: a. For two employees, the State did not provide the personnel action form or employment contract applicable to the tested pay period. b. For test items 9, 10, 11, 12, 13, 20, 22, 31, and 33, the general ledger did not identify which of the three Health Center awards was charged. Cause: Payroll documentation-retention controls were ineffective, and the chart of accounts was not designed to identify the specific Health Center award applicable to each transaction. a. For Conditions 1(a) through 1(d) and 2(a), payroll and personnel support was not consistently retained. b. For Condition 2(b), the chart of accounts did not include award-level coding for each Health Center award. Effect: The State did not comply with allowable-cost, compensation, and financial-management requirements. Unsupported payroll charges constitute known questioned costs of $3,816. Likely questioned costs exceeded $25,000 based on projection of the sample results. Recommendation: The State should: 1. Strengthen payroll documentation-retention and departmental monitoring controls or implement a uniform timekeeping system. 2. Require departments to submit supporting timekeeping reports to the State Treasury for secondary reconciliation. 3. Retain explanations for differences between uniform and departmental records and establish award-level codes in the chart of accounts. Identification as a Repeat Finding: Not applicable View of Responsible Officials: The State’s response and corrective action plan addressing this finding is included in the accompanying corrective action plan.