Finding Text
Finding 2023.002: Activities Allowed or Unallowed
Grantor: U.S. Department of Health and Human Services
Federal Program Names: Health Center Program Cluster, Health Center Program
(Community Health Centers, Migrant Health Centers,
Health Care for the Homeless, and Public Housing Primary
Care), COVID-19 Health Center Program (Community
Health Centers, Migrant Health Centers, Health Care for
the Homeless, and Public Housing Primary Care), Grants
for New and Expanded Services under the Health Center
Program, COVID-19 Grants for New and Expanded
Services under the Health Center Program.
Federal Assistance Listing Numbers: 93.224 and 93.527
Criteria
According to 2 CFR, Part 200.430(i)(1) charges to Federal awards for salaries and wages must be
based on records that accurately reflect the actual work performed, which must, among other
things: (i) be supported by a system of internal control which provides reasonable assurance that
the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official
records of the non-Federal entity; (iii) and reasonably reflect the total activity for which the
employee is compensated by the non-Federal entity.
Condition
There was no evidence that management reviewed and approved the payroll cost charged to the
major program to ensure it was an allowable cost under the Uniform Guidance, as evidenced by a
reviewer's signature on the labor report.
Cause
The Center's internal controls over payroll were not consistently followed.
Effect
Unallowable expenses could be charged to the grant.
Questioned Costs
None.
Context
Out of the 25 payroll transactions selected for testing, none of them illustrated documentation of
formal approval.
Identification as Repeat Finding
Not a repeat finding.
Recommendation
We recommend that the Organization consistently enforce its internal controls over payroll to
ensure that all labor reports are reviewed and show formal approval before payroll is submitted.
Views of Responsible Officials and Planned Corrective Actions
Management agrees with the audit finding and will implement additional controls to ensure payroll
expenditures are being formally reviewed and approved.