Finding Text
2024-004 Allowable Costs/Cost Principles
Program Information
Federal Organization U.S Department of Health and Human Services
Assistance Listing
Numbers
93.224 & 93.527 Health Center Program Cluster
Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197
Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards Subpart E sets for the specific cost principles
to be followed when expending federal funds.
Condition The Organization charged expenditures that were not necessary and reasonable for
performance of the award to the federal grants. The Organization charged salaries in
excess of the federal limits to grants. The Organization claimed the same expenditure
for reimbursement under multiple grants. The Organization did not maintain
sufficient supporting records for all of the expenditures reimbursed with federal
awards.
This finding appears to be a systemic problem
Cause The Organization’s internal controls did not include proper review of transactions
charged to federal programs to ensure that the goods or services received were
necessary for the performance of the award, and that the transactions were supported
by the appropriate documentation. In addition, expenditures were not properly tracked
by grant, which allowed for the same costs to be charged to multiple awards.
Effect The Organization may allocate unallowable costs to the federal awards.
Questioned Costs $534,222
Context In a sample of sixty invoices tested, eight were found to be for expenditures that were
not consistent with the allowable cost principles. We identified $283,128 of
expenditures that were not necessary for the performance of the award due to the
goods or services not yet being provided. In addition, we identified $56,685 of
expenditures for which the Organization could not provide supporting documentation,
$152,678 of salaries that were charged to multiple programs and $38,021 of
expenditures that were either recorded multiple times or were already charged to
another program. In addition, one employee had $3,710 of wages in excess of the
federal thresholds charged to federal programs.
Recommendation We recommend the Organization implement a system to track and document all
expenditures of federal awards in the financial management system and that
supporting documentation for all federal expenditures, whether payroll or
procurement transactions, be maintained. In addition, we recommend the
Organization implement controls sufficient to monitor the system to ensure it is
properly designed and effective.
Views of responsible
officials and planned
corrective action
Management is in agreement with this finding and will take corrective action as
outlined below.