Finding Text
Federal program information:
Funding agency: U.S. Department of Health and Human Services
Title: Medical Assistance Program, COVID-19 Block Grants for
Prevention and Treatment of Substance Abuse
ALN: 93.778, 93.959
Award period: July 1, 2022 – June 30, 2024
Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be
adequately documented. Additionally, the 2 CFR Part 200.430 requires that charges to Federal
awards for salaries and wages must be supported by a system of internal control which provides
reasonable assurance that the charges are accurate, allowable, and properly allocated.
Condition: Employee benefits expenditures charged to the programs do not agree to supporting
documentation, such as employee benefit provider premiums invoices. Additionally, the pay rate
paid to an employee was different from their approved pay rate. Lastly, an employee received
eight hours of birthday pay (as allowed under ABHS’s personnel policies) in two different pay
periods.
Context: Nine of 25 employee benefit expenditures tested did not agree with employee benefit
provider premium invoices. One of 25 employees tested was paid at a rate different from their
approved pay rate. One of 25 employees tested received eight hours of birthday pay in two
different pay periods.
Questioned Costs: $358 for the Medical Assistance Program and $0 for the COVID-19 Block
Grants for Prevention and Treatment of Substance Abuse program.
Cause: The employer portion of employee benefit premiums are preloaded into the accounting
system each year to be allocated to the different business units/programs at ABHS. ABHS does
not have a process in place to subsequently reconcile these expenditures to the employer benefits
provider premium invoices and/or employee benefit election forms. There was also a lack of
review of approved pay rates and leave requests during 2023.
Effect: ABHS may not be able to demonstrate that the costs charged to federal programs are
allowable.
Auditor’s Recommendations: ABHS should implement a reconciliation process to ensure that
employee benefit expenditures charged to federal programs agree with employee benefit
provider premiums invoices and/or employee benefit election forms.41
Management’s Response: ABHS acknowledges the finding related to employer benefits. As a
corrective measure, we have initiated a comprehensive review of our current systems and
identified key areas that require immediate upgrades. With the adoption of these upgrades, ABHS
will perform an interim review of the expenditures recorded in the accounting system compared
to the invoices.