Finding Text
Finding 2023-006: Financial and Programmatic Reporting
Information on the Federal Program: Assistance Listing Number 93.788
Criteria or Specific Requirement: HIPS is required to comply with applicable statutes, regulations,
and the terms and conditions of the Federal awards pertaining to financial and programmatic reporting
requirements.
Condition: HIPS incorrectly calculated the de minimis indirect rate on financial reports submitted
during the year. We also noted certain financial programmatic reports did not have sufficient
documentation to support timely submission of required reports on the awards under audit.
Cause: The de minimis rates on financial reports reviewed were not correct due to formula errors on
the modified direct cost base used for the calculation on reports submit. Reporting deadlines for proved
challenging to meet due to the turnover of key staff and the administrative burdens associated with
gathering the data necessary to complete the reports. Reports submissions for certain awards did not
have supporting documentation for the date of submission due to the information not being available in
the system that the reports are submit to. Lastly, we noted certain awards were approved prior to the
end of the reporting period due to administrative limitations on review and approval of reports.
Effect or Potential Effect: Noncompliance with financial and programmatic reporting requirements
could potentially result in the withholding of future payments, award suspension or termination, and
ineligibility of future awards.
Questioned Costs: None
Context: The exceptions noted during the audit pertained to all Department of Human and Health
Services (HHS) awards under audit for the year ended September 30, 2023.
Identification as a Repeat Finding, if Applicable: Not applicable
Recommendation: HIPS should recalculate the de minimis indirect rate in accordance with the
applicable cost principles as outlined in 2 CFR 200.414 (if applicable) or other relevant guidance based
on the award agreements. HIPS should ensure that any miscalculations are promptly corrected, and
any indirect costs calculation formulas are adjusted on future reports. Furthermore, HIPS should
implement internal controls to regularly verify the correct application of the de minimis rate to avoid
similar errors in the future. HIPS should implement a system to track and ensure the timely submission
of all financial and programmatic reports as required by the award agreements. This includes reviewing
the terms and conditions of each award to identify mandatory reporting requirements, and establishing
internal controls or to ensure accurate and timely reporting. Submission of reports should be retained
internally for documentation purposes.