Finding 513062 (2023-003)

Finding 2023-003 U.S. Department of Health and Human Services ALN: 93.224/93.527 Health Centers Cluster A/B - Activities allowed/Allowable costs Condition: The Organization did not properly maintain documentation to support the pay rate authorization. Criteria: Per the Uniform Guidance general provisions at 2 CFR 200.400 (d), the accounting practices of he recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs required by these cost principles, including maintaining adequate documentation to support costs charged to the Federal award. Context: In our testing of employee payroll charged to the health centers program, we observed that 2 of 40 payroll transactions selected for testing did not have a pay rate authorizations on file. Cause: The Organization could not locate the pay rate forms for two employees and could not determine if the forms were not completed or were not properly retained. Effect: There is an increased risk of unauthorized payroll being charged to the health centers program. Recommendation: Management should review its procedures for documentation of pay rate changes. We recommend the Organization periodically review a sample of employee pay rate changes to determine that support is being maintained in accordance with the cost principles of the Uniform Guidance. View of Responsible Officials: Management agrees with the finding and has prepared a corrective action plan.