Finding Text
Finding #2023-001 – Significant Deficiency. Applicable federal program: U. S. Department of Health and Human Services, Assistance Listing #93.959, Passed through Texas Department of Health and Human Services, Contract #’s: HHS000663700275, HHS000663700276, HHS000663700277, HHS000663700278, HHS000779800001, HHS000779800004, Contract years: 09/21 – 08/22; 09/22 – 08/23. Applicable state program: Texas Department of Health and Human Services, Contract #’s: HHS000779800001, Contract year: 09/21 – 08/22. Criteria: Allowable Costs – The Uniform Guidance §200.430 and the Texas Grant Management Standards require that charges to awards for salaries and wages must be based on records that accurately reflect the work performed. These records must 1) be supported by a system of internal control which provides reasonable assurance the charges are accurate, allowable and properly allocated; 2) reasonably reflect the total activity for which the employee is compensated; 3) comply with the established accounting policies and practices of the agency; and 4) support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one activity. Additionally, the Uniform Guidance requires costs to be necessary and reasonable for the performance of the federal award.. Condition and context: During our testing of 40 payroll transactions, we noted instances where the shift differential was not properly calculated and allocated to the grant departments. Cause: The errors in the payroll allocations to the grant occurred during the correction by the Agency for a single payroll period for individuals receiving shift differentials. Failure to follow established review policies and procedures resulted in these employees being overpaid for shift differential only. Effect: Failure to follow established internal control policies and procedures which requires reviews of payroll, could result in unallowable costs being charged to the grant cost center used for reporting costs under fee for service contracts. Recommendation: Emphasize adherence to established policies and procedures to ensure payroll, including allocations methodology, are properly followed and reviewed. Views of responsible officials and planned corrective actions: Management agrees with the finding. See Corrective Action Plan.