FAC Explorer

Finding 393005 (2023-001)

Significant Deficiency
Requirement
LNP
Questioned Costs
-
Year
2023
Accepted
2024-04-11
Audit: 303323
Organization: Baystate Medical Center, Inc. (MA)
Auditor: Deloitte

AI Summary

  • Core Issue: Significant deficiencies in internal controls over compliance for the Research and Development Cluster were identified, impacting the accuracy and timeliness of financial reporting.
  • Impacted Requirements: Compliance with Section 200.302-303 of the U.S. CFR, which mandates proper documentation and internal controls for federal awards, was not met.
  • Recommended Follow-Up: Assess and redefine roles in the Sponsored Programs Administration, develop and maintain clear policies, and implement a centralized documentation system to enhance compliance and control effectiveness.

Finding Text

Finding 2023‐001—Significant Deficiency in Internal Controls over Compliance: Research and Development Cluster Program—Research and Development Cluster (R&D) Criteria—Compliance with the financial management and internal control requirements outlined in Title 2 below, exhibited the following U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Sections 200.302‐303 (“Section 200.302‐303”) is required for all federal awards. Section 200.302‐303 outlines the various requirements around documentation and internal controls. Condition and Context—Baystate Health’s internal controls over R&D allowable costs, special tests and provisions, and amounts reported on the schedule of expenditures of federal awards (SEFA) in accordance with Section 200.302‐303 were not appropriately designed and implemented, or operated, effectively. Specifically, during the 2023 audit, the following conditions were identified:  In instances, controls, as described below, exhibited the following: o Certain roles and responsibilities within the Sponsored Programs Administration (SPA) were inadequately defined and not understood by control owners o inconsistent documentation evidencing review over R&D compliance requirements o lack of a central repository for documentation related to the performance of internal control procedures and compliance with grant requirements  For five out of 40 National Institute of Health salary cap selections related to special tests and provisions, the monthly review of the summary report by grant activity was not adequately and consistently performed. The summary report is editable by end users and the review performed was not precise enough to identify formula errors in the calculations; or key personnel who were incorrectly excluded from the report.  The review of indirect costs and fringe benefits on the SPA intake form was not precise enough to identify errors in a timely manner. The SPA form includes key grant data and is used in the initial setup of new grants to input indirect cost and fringe benefit rates in the general ledger system. For two out of 16 selections of indirect costs and fringe benefit amounts errors were not identified on a timely basis and were corrected in a subsequent period.  The review and preparation of the SEFA for R&D grants was not timely and precise enough to ensure accuracy. This resulted in a lack of accuracy of grant award information presented on the SEFA; as well as the inclusion of grant expenses pertaining to prior fiscal periods on the current year’s SEFA since they were not identified timely in the prior years. Approximately $39 thousand in R&D expenditures related to prior fiscal years was included on the 2023 SEFA as they were not identified timely in prior fiscal years. These control deviations when considered in the aggregate are indicative of a significant deficiency in the design, implementation, and operating effectiveness of the internal controls. Questioned Costs—none Cause—Personnel responsible for internal controls over compliance related to R&D were not adequately aware of the documentation requirements of Section 200.302‐303. Additionally, the internal control framework is not clearly defined and relies heavily on manual control processes that are highly susceptible to human error. Reviews were not performed a precise enough level and on a timely basis. Effect—Failures in internal controls have the potential to result in instances of noncompliance with R&D grant requirements. Recommendation— The delay in completing the September 30, 2023, Uniform Guidance audit procedures as well as the deficiencies in internal controls identified during the audit related to R&D indicates that the controls over compliance for R&D should be assessed and, where necessary, corrective action needs to be taken to enable Baystate Health to produce appropriate supporting documentation on a timely basis and maintain appropriate internal controls over all compliance requirements. Specifically, we recommend that:  The roles and responsibilities of the individuals involved in the SPA should be challenged to ensure that all critical functions are addressed; the distribution of responsibilities is appropriate; and positions include an element of cross‐training. The capabilities of the individuals and the level of resources should be assessed to make sure that they are consistent with the responsibilities assigned.  Policies and procedures should be developed, documented and maintained/updated for all significant grant‐related activities. On‐going monitoring should take place to assure that such policies and procedures are executed accurately. Internal controls could be enhanced by standardizing best practices and providing ongoing training regarding federal requirements over compliance and documentation.  A system should be implemented to maintain documentation related to internal controls and compliance requirements for federal grants in such a way that this documentation is easily accessible and clearly interpretated.  The process for calculating and reviewing salary cap requirements should be revised to include a check that the reports reviewed as part of the control process are complete and accurate.  Controls should be implemented consistently to facilitate a timely review of indirect cost and fringe benefit rates at the initial set‐up of the activity within the general ledger.  A more thorough closing process should be performed to review information included on the SEFA and to record grant‐related expenses timely to minimize the risk of recognizing out‐of‐period expenses for SEFA reporting.

Categories

Reporting Allowable Costs / Cost Principles Special Tests & Provisions

Other Findings in this Audit

  • 392991 2023-001
    Significant Deficiency
  • 392992 2023-001
    Significant Deficiency
  • 392993 2023-001
    Significant Deficiency
  • 392994 2023-001
    Significant Deficiency
  • 392995 2023-001
    Significant Deficiency
  • 392996 2023-001
    Significant Deficiency
  • 392997 2023-001
    Significant Deficiency
  • 392998 2023-001
    Significant Deficiency
  • 392999 2023-001
    Significant Deficiency
  • 393000 2023-001
    Significant Deficiency
  • 393001 2023-001
    Significant Deficiency
  • 393002 2023-001
    Significant Deficiency
  • 393003 2023-001
    Significant Deficiency
  • 393004 2023-001
    Significant Deficiency
  • 393006 2023-001
    Significant Deficiency
  • 393007 2023-001
    Significant Deficiency
  • 393008 2023-001
    Significant Deficiency
  • 393009 2023-001
    Significant Deficiency
  • 393010 2023-001
    Significant Deficiency
  • 393011 2023-001
    Significant Deficiency
  • 393012 2023-001
    Significant Deficiency
  • 393013 2023-001
    Significant Deficiency
  • 393014 2023-001
    Significant Deficiency
  • 393015 2023-001
    Significant Deficiency
  • 393016 2023-001
    Significant Deficiency
  • 393017 2023-001
    Significant Deficiency
  • 393018 2023-001
    Significant Deficiency
  • 393019 2023-001
    Significant Deficiency
  • 393020 2023-001
    Significant Deficiency
  • 393021 2023-001
    Significant Deficiency
  • 393022 2023-001
    Significant Deficiency
  • 393023 2023-001
    Significant Deficiency
  • 393024 2023-001
    Significant Deficiency
  • 393025 2023-001
    Significant Deficiency
  • 393026 2023-001
    Significant Deficiency
  • 393027 2023-001
    Significant Deficiency
  • 393028 2023-001
    Significant Deficiency
  • 393029 2023-001
    Significant Deficiency
  • 393030 2023-001
    Significant Deficiency
  • 393031 2023-001
    Significant Deficiency
  • 393032 2023-001
    Significant Deficiency
  • 393033 2023-001
    Significant Deficiency
  • 393034 2023-001
    Significant Deficiency
  • 393035 2023-001
    Significant Deficiency
  • 393036 2023-001
    Significant Deficiency
  • 393037 2023-001
    Significant Deficiency
  • 393038 2023-001
    Significant Deficiency
  • 393039 2023-001
    Significant Deficiency
  • 393040 2023-001
    Significant Deficiency
  • 393041 2023-001
    Significant Deficiency
  • 393042 2023-001
    Significant Deficiency
  • 393043 2023-001
    Significant Deficiency
  • 393044 2023-001
    Significant Deficiency
  • 393045 2023-001
    Significant Deficiency
  • 393046 2023-001
    Significant Deficiency
  • 393047 2023-001
    Significant Deficiency
  • 393048 2023-001
    Significant Deficiency
  • 393049 2023-001
    Significant Deficiency
  • 969433 2023-001
    Significant Deficiency
  • 969434 2023-001
    Significant Deficiency
  • 969435 2023-001
    Significant Deficiency
  • 969436 2023-001
    Significant Deficiency
  • 969437 2023-001
    Significant Deficiency
  • 969438 2023-001
    Significant Deficiency
  • 969439 2023-001
    Significant Deficiency
  • 969440 2023-001
    Significant Deficiency
  • 969441 2023-001
    Significant Deficiency
  • 969442 2023-001
    Significant Deficiency
  • 969443 2023-001
    Significant Deficiency
  • 969444 2023-001
    Significant Deficiency
  • 969445 2023-001
    Significant Deficiency
  • 969446 2023-001
    Significant Deficiency
  • 969447 2023-001
    Significant Deficiency
  • 969448 2023-001
    Significant Deficiency
  • 969449 2023-001
    Significant Deficiency
  • 969450 2023-001
    Significant Deficiency
  • 969451 2023-001
    Significant Deficiency
  • 969452 2023-001
    Significant Deficiency
  • 969453 2023-001
    Significant Deficiency
  • 969454 2023-001
    Significant Deficiency
  • 969455 2023-001
    Significant Deficiency
  • 969456 2023-001
    Significant Deficiency
  • 969457 2023-001
    Significant Deficiency
  • 969458 2023-001
    Significant Deficiency
  • 969459 2023-001
    Significant Deficiency
  • 969460 2023-001
    Significant Deficiency
  • 969461 2023-001
    Significant Deficiency
  • 969462 2023-001
    Significant Deficiency
  • 969463 2023-001
    Significant Deficiency
  • 969464 2023-001
    Significant Deficiency
  • 969465 2023-001
    Significant Deficiency
  • 969466 2023-001
    Significant Deficiency
  • 969467 2023-001
    Significant Deficiency
  • 969468 2023-001
    Significant Deficiency
  • 969469 2023-001
    Significant Deficiency
  • 969470 2023-001
    Significant Deficiency
  • 969471 2023-001
    Significant Deficiency
  • 969472 2023-001
    Significant Deficiency
  • 969473 2023-001
    Significant Deficiency
  • 969474 2023-001
    Significant Deficiency
  • 969475 2023-001
    Significant Deficiency
  • 969476 2023-001
    Significant Deficiency
  • 969477 2023-001
    Significant Deficiency
  • 969478 2023-001
    Significant Deficiency
  • 969479 2023-001
    Significant Deficiency
  • 969480 2023-001
    Significant Deficiency
  • 969481 2023-001
    Significant Deficiency
  • 969482 2023-001
    Significant Deficiency
  • 969483 2023-001
    Significant Deficiency
  • 969484 2023-001
    Significant Deficiency
  • 969485 2023-001
    Significant Deficiency
  • 969486 2023-001
    Significant Deficiency
  • 969487 2023-001
    Significant Deficiency
  • 969488 2023-001
    Significant Deficiency
  • 969489 2023-001
    Significant Deficiency
  • 969490 2023-001
    Significant Deficiency
  • 969491 2023-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
97.036 Disaster Grants - Public Assistance (presidentially Declared Disasters) $18.01M
93.498 Provider Relief Fund $16.26M
93.969 Pphf Geriatric Education Centers $969,825
93.788 Opioid Str $441,594
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $425,666
93.884 Grants for Primary Care Training and Enhancement $321,039
93.283 Centers for Disease Control and Prevention_investigations and Technical Assistance $305,269
20.616 National Priority Safety Programs $300,101
21.027 Coronavirus State and Local Fiscal Recovery Funds $298,704
16.575 Crime Victim Assistance $276,506
93.155 Rural Health Research Centers $249,246
16.320 Services for Trafficking Victims $219,774
93.387 National and State Tobacco Control Program (b) $205,682
93.866 Aging Research $193,018
93.917 Hiv Care Formula Grants $165,000
93.393 Cancer Cause and Prevention Research $151,086
16.817 Byrne Criminal Justice Innovation Program $147,762
93.940 Hiv Prevention Activities_health Department Based $146,270
93.247 Advanced Nursing Education Grant Program $124,653
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $108,051
93.107 Area Health Education Centers Point of Service Maintenance and Enhancement Awards $107,688
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $103,606
93.310 Trans-Nih Research Support $77,632
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $74,973
93.889 National Bioterrorism Hospital Preparedness Program $73,364
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $54,698
17.268 H-1b Job Training Grants $50,000
93.242 Mental Health Research Grants $37,834
93.840 Translation and Implementation Science Research for Heart, Lung, Blood Diseases, and Sleep Disorders $36,346
93.838 Lung Diseases Research $34,429
93.865 Child Health and Human Development Extramural Research $33,754
93.837 Cardiovascular Diseases Research $32,645
17.259 Wia Youth Activities $32,617
93.279 Drug Abuse and Addiction Research Programs $30,074
93.394 Cancer Detection and Diagnosis Research $25,786
93.399 Cancer Control $25,296
93.350 National Center for Advancing Translational Sciences $18,857
93.395 Cancer Treatment Research $11,864
93.226 Research on Healthcare Costs, Quality and Outcomes $11,424
93.213 Research and Training in Complementary and Integrative Health $10,985
16.738 Edward Byrne Memorial Justice Assistance Grant Program $10,939
12.420 Military Medical Research and Development $2,079
93.286 Discovery and Applied Research for Technological Innovations to Improve Human Health $2,046
93.855 Allergy, Immunology and Transplantation Research $1,714
93.RD Innovative Methods to Evaluate the Role of Influenza Vaccines in Attenuating Severe Disease in Adults $1,696
93.172 Human Genome Research $1,369
93.860 Emerging Infections Sentinel Networks $1,185
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $306
93.145 Aids Education and Training Centers $-4,665
93.817 Hospital Preparedness Program (hpp) Ebola Preparedness and Response Activities $-10,399