Finding Text
Item: 2022-004 Assistance Listing Number: 14.241 Programs: Housing Opportunities for Persons with AIDS Federal Agency: U.S. Department of Housing and Urban Development Pass-Through Agencies: City of Phoenix Pass-Through Grantor Identifying Number: 144347 Award Year: July 1, 2021 ? June 30, 2022 and July 1, 2022 ? June 30, 2023 Compliance Requirement: Allowable Activities and Costs Criteria: Under cost principles established by 2 CFR 200.430, compensation for personal services includes all remuneration, paid currently or accrued, for services of employees rendered during the period of performance under the Federal award, including but not necessarily limited to wages and salaries. Condition: In our sampling of payroll expenditures charged to the program, we noted one employee's wage rate charged to the grant was not updated consistent with the employee's wage rate increase paid in their payroll. As a result, the incorrect amount of payroll costs was charged to the program (undercharged). Questioned Costs: n/a Context: In a population of over 250 payroll costs charged to the program, we conducted a non-statistical sample of 40 payroll costs charged to the program. In our sample of 40, we noted 2 of 40 payroll selections did not reflect the correct pay rate charged to the program. We noted the program was charged with an old wage rate that was lower than the actual paid rate. As a result, the program was undercharged. This is deemed to be a material weakness in internal control over compliance. Effect: The program was undercharged payroll costs totaling approximately $9. Cause: Southwest Behavioral Health Services, Inc. and Subsidiaries did not have adequate controls in place to ensure payroll costs charged to the grant properly reflected payroll changes and that amounts charged to the grant were properly supported by current wage rates. Identification as a Repeat Finding: Not a repeat finding Recommendation: Southwest Behavioral Health Services, Inc. and Subsidiaries should implement controls to ensure payroll costs charged to the grant properly reflected payroll changes and that amounts charged to the grant were properly supported by current wage rates. Views of Responsible Officials: Management of Southwest Behavioral Health Services concurs with the finding. See Corrective Action Plan.