Finding Text
Allowable Activities and Costs
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Health Centers Cluster
Assistance Listing Number: 93.224 and 93.527
Federal Award Identification
Number: H80CS00824-22 and H80CS00824-23
Award Periods: May 1, 2023 – April 30, 2024, May 1, 2024 – April 30, 2025
Type of Finding: Immaterial noncompliance and significant deficiency in internal control
over compliance
Criteria:
A grantee's system of internal control should include processes to review after-the-fact interim charges
made to a federal award based on budget estimates. 45 CFR 75.430(i)(1). In addition, CFR 200.430
indicates costs of compensation are allowable to the extent that they satisfy the specific requirement of
determining and supporting the salary and wages based on records that accurately reflect the work
performed. Salaries and wages charged to a grant should be tagged/identified by employee to ensure
expenses are not counted or charged twice.
Condition:
During the testing of payroll expenses charged to the grant, it was noted that a formula error resulted in
the incorrect calculation of payroll expense for a particular employee. The Organization’s review did
not identify that the wages being charged to the grant were inconsistent with the amount actually paid
to the identified employee.
Questioned Costs:
$757.
Context:
The above condition impacted three (3) of sixty (60) transactions selected for testing, all of which
related to the same employee.
Cause:
The Organization’s process for tracking and aggregating wages charged to the grant was dependent
upon a VLOOKUP formula based on the employee’s last name. As a result of there being two
employees with the same last name, the formula returned the first such employee from the payroll
records. This resulted in the incorrect calculation of payroll expense for the employee selected for
testing.
Effect:
The amount of wages charges to the grant could be different from the actual amount of wages paid to
the employee.
Repeat Finding:
Yes.
Recommendation:
We recommend the Organization implement a comprehensive and thorough process to review all
wages charged to federal and state grant prior to initiating a drawdown request or submitting a
reimbursement request to the grantor. As part of this, the Organization should implement a process to
review changes to salary and wage information as changes are made or identified.