Finding Text
Assistance Listing, Federal Agency, and Program Name - 93.224, Department of Health and Human Services, Health Center Program Cluster; 93.243, Department of Health and Human Services, Substance Abuse and Mental Health Services Projects of Regional and National Significance Program; 93.696, Department of Health and Human Services, Certified Community Behavioral Health Clinics
Federal Award Identification Number and Year - H8030717, H79SP083277, H79TI085241, H79SM086769; 2023 - 2024
Pass-through Entity - N/A
Finding Type - Material weakness and material noncompliance with laws and regulations
Repeat Finding - No
Criteria - Costs of compensation are allowable to the extent that total compensation for individual employees: (1) Is reasonable for the services rendered and conforms to the established written policy of the recipient or subrecipient consistently applied to both Federal and non-Federal activities; (2) Follows an appointment made in accordance with the recipient's or subrecipient's laws, rules, or written policies and meets the requirements of Federal statute, where applicable; and (3) is determined and supported through documentation (CFR 240.430)
Condition - During the current year, a lack of control procedures surrounding the review of payroll costs resulted in improper amounts of payroll to be charged to the grant. The Organization was using two different methods to charge payroll costs to grants (indirect and direct) for empoyees which is against the Organizations policy and the grant agreement
Questioned Costs - None
If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A
Identification of How Questioned Costs Were Computed - N/A
Context - There were 23 employee payroll allocations out of a sample of 81 whose payroll costs were incorrected allocated to the program
Cause and Effect - A control was lacking to ensure the payroll costs are being allocated to the programs based on the Organization's policy or grant agreement
Recommendation - We recommend a control to be implemented to ensure payroll costs are being properly allocated to grant programs
Views of Responsible Officials and Corrective Action Plan - Finance is working with IT and HR to integrate the payroll system with LSS’ accounting system to eliminate manual processes in the creation of the payroll journal entry. There will also be periodic internal audits performed to test payroll allocations.