Finding 390781 (2023-001)

Significant Deficiency

Requirement

Questioned Costs

Year

2023

Accepted

2024-04-01

Audit: 301517

Organization: Au Health System, Inc. (GA)

Auditor: Carr Riggs & Ingram LLC

AI Summary

Core Issue: Inadequate controls led to payroll expenditures being paid without proper approval for allowable costs.
Impacted Requirements: Compliance with 2 CFR 200.303 and 2 CFR 200.430(i)(1-8) for documentation of personnel expenses was not met.
Recommended Follow-Up: Implement procedures to ensure all payroll disbursements have documented review and approval of time sheets and pay rates before payment.

Finding Text

Item 2023‐001 Allowable Costs/Activities Allowed Medical Assistance Program – Assistance Listing # 93.778 U.S. Department of Health and Human Services Passed through the State of Georgia Board of Health Care Workforce Pass-through Grant No. Family Medicine (7/1/2022 – 6/30/2023) COVID-19 Provider Relief Fund – Assistance Listing # 93.498 U.S. Department of Health and Human Services Federal Assistance Identification Number – PRF20200001 Federal Award Year - 2020 Condition/Perspective – Adequate human resource controls were not in place to document that two payroll expenditures was for allowable costs and activities prior to payment, resulting in the following: • COVID-19 Provider Relief Fund – Assistance Listing # 93.498 - One out of 40 employee payroll disbursements were paid without the proper approval of the supporting time sheet. Our sample was a statistically valid sample. • Medical Assistance Program – Assistance Listing # 93.778 - One out of 20 employee payroll disbursements were paid without the proper approval of the supporting time sheet and supporting pay rate. Our sample was a statistically valid sample. Criteria – Grantees should have controls in place to ensure that grant monies are for allowable costs and allowable activities. 2 CFR 200.303 requires the non‐Federal entity to “(a) establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the non‐Federal entity is managing the Federal statutes, regulations, and the terms and conditions of the Federal award.” Grantees must follow the requirements of 2 CFR 200.430(i)(1-8) Standards for Documentation of Personnel Expenses. Cause – Lack of sufficient human resource controls to ensure there is evidence of review and approval of supporting time sheet and pay rate documentation prior to payment. Questioned Costs – Not applicable. Identification of Repeat Findings – Not a repeat finding Effect – Lack of proper review and approval could result in disallowed costs. Recommendation – We recommend the implementation of procedures necessary to ensure there is evidence of review and approval of supporting pay rate documentation and supporting time sheets of payroll disbursements prior to payment. Management’s Response – See “Corrective Action Plan”

Corrective Action Plan

Item 2023‐001 – Allowable Costs/Activities Contact person: Wendy Stephens, Senior Accounting Manager Management’s Response – Management’s controls over approval of time sheets operated effectively 97.5% of the time prior to processing of payroll. The payroll expenditures allocated to the COVID-19 Provider Relief Fund – Assistance Listing 93.498 were allocated to the Provider Relief Funding and including in reporting of expenditures based on management review of guidance provided by HRSA in determination of the portion of the payroll costs allocated as qualifying and allowable expenditures under the program. The guidance on allowable costs was determined by HRSA subsequent to disbursement of the funds by HRSA and after incurrence of the expenditures given the immediacy of the COVID-19 pandemic providing of funds and incurrence of costs. Management will perform an annual review of expenditures allocated to a grant to confirm the allowability of the costs under the respective program. Management’s controls over approval of time sheets operated effectively 97% of the time prior to processing payroll. The payroll expenditures related to the 1 time sheet not approved prior to payment of payroll are for an employee assigned to work specifically on the program funded by Assistance Listing #93.778. Management will perform an annual review of expenditures allocated to a grant to confirm the allowability of the costs under the respective program. Management expects the corrective actions described above to be complete no later than June 30, 2024.

Other Findings in this Audit

390782 2023-001

Significant Deficiency
390783 2023-001

Significant Deficiency
390784 2023-001

Significant Deficiency
390785 2023-001

Significant Deficiency
967223 2023-001

Significant Deficiency
967224 2023-001

Significant Deficiency
967225 2023-001

Significant Deficiency
967226 2023-001

Significant Deficiency
967227 2023-001

Significant Deficiency

Programs in Audit

ALN	Program Name	Expenditures
93.498	Covid-19 Provider Relief Fund	$5.06M
21.027	Covid-19 Coronavirus State and Local Fiscal Recovery Funds	$436,466
93.817	Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities	$423,689
93.778	Medical Assistance Program	$324,836
93.889	National Bioterrorism Hospital Preparedness Program	$44,862