Finding Text
Federal agency: U.S. Department of Health and Human Services
Federal program title: Health Centers Cluster
Assistance Listing Number: 93.224/93.527
Award Period: Varying project and budget periods: 2/1/21 – 1/31/22, 2/1/22 – 1/31/23, 4/1/21 – 3/31/23
Type of Finding:
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Cost principles under 2 CFR 200 also do not allow expenditures for individual's wages that exceed a federal compensation limit.
Condition: One individual's compensation charged to the federal grant had wages that exceeded federal compensation limits.
Questioned costs: $24,920 of wage-related costs exceeding federal limitation.
Context: While there was one individual with compensation exceeding federal limits charged to the Organization H8F grant, there were other eligible wage and other expenditures available that could have replaced the overage had it been corrected.
Cause: Internal control procedures were not sufficient to identify the wages exceeding federal limits prior to being charged to the federal grant.
Effect: Eligible wage expenditures were overstated due to wages that exceed federal limits for one individual. There were other available eligible expenditures sufficient to offset this overstatement, however.
Recommendation: We recommend management implement a review process to check individual's compensation charged to federal grants against annual federal limitations prior to drawdown of funds.
View of responsible officials: No disagreement with the finding. Management will implement review processes to identify individuals over federal wage limitations moving forward before being charged to federal grants.