Finding Text
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2023-002
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: Employee time sheets do not identify the hours charged to each federal grant, and do not identify hours worked by employees on non-federal grants.
Cause: The Organization’s time sheets are not designed so that time worked on specific federal grants and other non-federal projects, can be recorded accurately. The dependence on outsourced accounting personnel prevented management from receiving training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: The Organization is not in compliance with federal regulations regarding time and effort reporting. Employee costs charged to the federal grant cannot be compared to recorded hours for verification or to invoices submitted to the Pass-through agency for payment.
Questioned Costs: Unknown
Repeat Finding: This is a repeat finding (see prior year finding number 2022-002)
Recommendation: The Organization should hire an in-house accountant and obtain additional training on Uniform Guidance and federal grant management, to create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.