Finding Text
Assistance Living Number 93.224 Health Center Programs
Grant Award Number H80CS00112
US Department of Health and Human Services
Finding 2023-002
Compliance Requirement: Allowable Cost/Cost Principles
Type of Finding: Material Weakness
Criteria: Uniform Guidance Allowable Costs/Cost Principles addresses activities related to payroll and personnel which should be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and are incorporated into the official records of the recipient organization.
Condition: A walkthrough of fourteen individuals was performed to review personnel files and payroll related to salary for the Organization. Of the fourteen files reviewed, two had no approved current pay rate documented, and the salary or hourly rate paid was not the rate contained in the file. Also, there was no timesheet provided to support the time charged to the federal grant for eleven of the fourteen individuals tested.
Cause: Management of the Organization’s human resources and payroll departments experienced substantial turnover during the year and personnel files were not prioritized to keep them in good order. Payroll documentation was not maintained properly. Also, new administrators were unaware that salaried employees who are paid with federal funds, must maintain documentation to support time allocated.
Effect or Potential Effect: Without proper documentation, it is not possible to support the appropriate wage rate being paid to an individual. Also, it is not possible to prove an accurate allocation of time charged to a federal grant without time sheets, in accordance with the system that was in use.
Questioned Costs: $142,546
Repeat Finding: The finding is a repeat finding (see prior year finding number 2022-005)
Recommendation: Recommend that administrators become familiar with time and effort reporting requirements. Consider the use of a checklist within each file as an additional procedure to ensure that each file contains all necessary documents and that the file has been updated for current rates of pay.
Views of Responsible Officials: Management agrees with the recommendation and will implement the use of a checklist to improve compliance.