Finding Text
2022-007 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost PrinciplesSignificant Deficiency in Internal Control Over ComplianceCriteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award.Condition: The Hospital?s final expenditure listing claimed payroll costs by certain departments that worked directly with COVID patients. The general ledger report that this information was generated from reports the information by department, however the payroll register does not have departmental data. Therefore, the general ledger report was not able to tie to specific department information, but it was able to tie in total.Cause: The Hospital had multiple employees working in multiple departments during the periods claimed. The Hospital?s payroll per department was calculated by the payroll system which was subsequently replaced. In the transition to the new software, a payroll register by department that shows the exact allocation of wages to various departments was not retained.Effect: Without a payroll register by department, there is a possibility that ineligible expenditures may be claimed under the program.Questioned Costs: None reported.Context: A nonstatistical sample of 60 items ($302,483) from a total population exceeding 250 items ($3,824,947) were tested for activities allowed or unallowed and allowable costs/cost principles.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that the support of payroll expenditures by department are properly retained.Views of Responsible Officials: Management agrees with the finding.