Finding Text
Federal Agency: Department of Health and Human Services
Federal Program: 93.224 Health Center Program
Identification Number: H80CS29007
Requirement: Activities Allowed or Unallowed
Type of Finding: Significant deficiency in internal control over major program
Criteria: Charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must support the distribution of the employee’s salary or wages among specific activities or cost objectives if the employee works on more than one federal award; a federal award and non-federal award; an indirect cost activity and a direct cost activity; two or more indirect activities which are allocated using different allocation bases or an unallowable activity and a direct or indirect cost activity.
Condition: An employee was charged to the federal program without the allocation of pay being supported.
Cause: Timesheets are not broken down by program, so payroll expenses are not allocated based off actual time spent on the grant program.
Effect: Failure to allocate employee pay in accordance with federal requirements could result in a loss of funding.
Context: For four out of eight pay periods tested, an employee’s pay was allocated 50% to the Health Center Program. Support could not be provided showing that this allocation was appropriate.
Recommendation: The Health Center should maintain support and rationale for all allocations of payroll costs for employees charged to federal awards. Additionally, employees should earmark their timesheets with the number of hours worked on each program.
Views of Responsible Official(s) and Planned Corrective Actions: See corrective action plan.