Finding 479184 (2023-001)

Finding 2023-001 Internal Control Over Allowable Costs/Activities Federal Agency: U.S. Department of Health and Social Services Federal Program: Comprehensive Behavioral Health Treatment and Recovery ALN: 93.959 Award Numbers: 162-268-24008 (State of Alaska Pass through award), B08TI085791 (Federal Award Identification Number) Award Year: 2024 Type of Finding: Significant deficiency in internal control over compliance and noncompliance. Condition/Context: During our testing of internal controls over payroll transactions for compliance, we noted two (2) payroll transactions for the same employee where the employee was not paid the correct wage rate. This resulted in the employee being underpaid. Criteria: Adequate internal controls over payroll transactions should be in place to ensure that the personnel files are complete and updated as necessary, for approved pay rates. Cause: Lack of internal control over review of payrate changes. Effect or Potential Effect: Not updating personnel files as changes occur can result in a misstatement of expenditures due to employees being paid incorrectly or charged to funding sources for which their payroll is an unallowable cost. Questioned Costs: None reported. Repeat Finding: This is not a repeat finding and we consider it to be an isolated incident. Recommendation: We recommend the Organization adheres to its internal control polices to ensure adequate and accurate reporting of payroll transactions. Management response: Management concurs with finding, see corrective action plan.