Finding Text
Information on the Federal Program:
Assistance Listing Number: 93.686—Ending the HIV Epidemic: A Plan for America—Ryan White
HIV/AIDS Program Parts A and B.
Pass‐Through Entity: State of Mississippi.
Award Number: SG‐2199 R2.
Compliance Requirements: Activities Allowed or Unallowed
Type of Finding: Material Noncompliance and Material Weakness in Internal Control over
Compliance.
Criteria: As stated in 2 CFR 200.430, part g, subsection 1, line vii, “budget estimates (meaning, estimates determined before the services are performed) alone do not qualify as support for charges to Federal awards.” 2 CFR 200.430 specifies that charges must be based on records that accurately reflect the work performed. 2 CFR 200.430, part g, subsection 1, line iii further specifies that “these records must reasonably reflect the total activity for which the employee is compensated by the recipient or subrecipient, not exceeding 100 percent of compensated activities.”
Condition: SEE charged personnel service cost to the contract based on budgeted estimates and did not track actual hours spent on the federally funded contract for the year ended December 31, 2023.
Cause: Exempt employees need to track hours similar to non-exempt employees for federal grants.
Effect or Potential Effect: As a result of the identified control deficiencies, there is a risk that personnel service costs charged to federal awards may not accurately reflect the actual work performed. This could lead to unallowable or unsupported costs being billed to federal contracts, potentially resulting in questioned costs or noncompliance with federal regulations.
Questioned costs: $72,765
Recommendation: We recommend that SEE establish and implement standardized timekeeping procedures requiring all employees whose salaries are charged to federal contracts to submit accurate and complete timecards that reflect the actual hours worked.
Views of responsible officials and planned corrective actions: Management acknowledges the oversight in not utilizing timecards for salaried employees whose compensation is charged to federal contracts. To strengthen internal controls and ensure compliance with applicable federal regulations, management is committed to implementing corrective measures. As part of this effort, management will update existing policies and procedures, and will identify and provide targeted training for accounting personnel responsible for allocating salary charges to federal contracts.