Finding Text
Federal agency: U.S. Department of Health and Human Services
Federal program title: Block Grants for Community Mental Health Services
Assistance Listing Number: 93.958
Pass-Through Agency: n/a
Pass-Through Number(s): n/a
Award Period9/30/21-9/29/24
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Code of Federal Regulations (CFR) § 200.303(a) indicates non-federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition: Inaccurate payroll allocation calculation by management when allocating payroll costs to the federal program.
Questioned costs: $13
Context: For 1 of the 25 allowable cost transactions selected for testing, there was an error in an employee’s payroll allocation causing more payroll expense to be charged to the federal program expense than there should have been.
Cause: Error by management in payroll allocation calculation.
Effect: If payroll allocation costs are not reviewed and approved as being allowable, it could result in unallowable costs being charged to federal grants.
Repeat Finding: N/A
Recommendation: We recommend the organization enhance its internal controls to ensure payroll allocation costs are properly calculated and costs are charged to the federal program.
Views of responsible officials: Management will enhance its internal controls to ensure payroll allocation costs are properly calculated and costs are charged to the federal program properly.