Finding Text
2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024)
Assistance Listing Number: 93.211
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Rural Telemedicine Grants
Compliance Requirement: Allowable Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $68 known and $589 likely
Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities.
Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request.
Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award.
Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred.
Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.