Finding Text
Finding #2023-001 – Material Weakness and Other Noncompliance. Applicable federal programs: U. S. Department of Health and Human Services, Direct Federal Funding, Cooperative Agreement to Support Navigators in Federally-facilitated Exchanges, Assistance Listing #93.332, Contract #NAVCA210403-02-02, Contract year: 08/27/22 – 08/26/23, Contract #NAVCA210403-03-00, Contract year: 08/27/23 – 08/26/24. U. S. Department of Health and Human Services, Passed through Texas Health and Human Services Commission, Block Grants for Prevention and Treatment of Substance Abuse, Assistance Listing #93.959, Contract #HHS000539700204 YPI, Contract year: 09/01/22 – 08/31/23, Contract #HHS000539700204 YPS, Contract year: 09/01/22 – 08/31/23, Contract #HHS000539700204 YPU, Contract year: 09/01/22 – 08/31/23. Criteria: Allowable costs – The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 requires that charges to awards for salaries and wages 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 that 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. Without sufficient controls, costs may be inappropriately charged to a federal funding stream. Condition and context: Time and effort reporting is based on the amount reflected in the budget rather than actual time spent on the program. Additionally, the allocation of certain costs are impacted as they are charged to the program based on the direct salary percentages. Repeat of finding #2022-001. Cause: Prior to the audit finding reported to management in May 2023, management had a lack of understanding regarding the requirements for charging payroll costs caused improper reporting of time incurred on the federal awards. Management is working to implement new controls and procedures to fully comply with time and effort reporting as required by Uniform Guidance. Effect: Failure to establish controls for adherence with the Uniform Guidance for allowable costs may result in unallowed costs charged to the program. Questioned costs: Unknown. Recommendation: Provide training to ensure that salaries and wages charged to federal programs are supported by personnel activity reports based on actual time worked. Views of responsible officers and planned corrective action: Management agrees with the finding. See Corrective Action Plan.