Finding 58004 (2022-001)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-07-11
Audit: 54397
Organization: Substance Abuse Services, Inc. (PA)

AI Summary

  • Core Issue: Employee time was charged to programs based on initial estimates without proper after-the-fact review.
  • Impacted Requirements: This practice violates Uniform Guidance standards for documentation of personnel expenses.
  • Recommended Follow-Up: Establish a process to review and adjust employee time charges throughout the fiscal year.

Finding Text

Finding 2022-001: Allocation of Payroll U.S. Department of Health and Human Services ? Opioid STR (ALN #93.788) Activities Allowed or Unallowed, Allowable Costs/Cost Principles Condition: During the audit, it was noted that employee time charged to multiple programs was based on an estimated percentage of time established at the beginning of the fiscal year. This methodology is allowable when an after- the ? fact review of the estimate is completed to ensure the federal award is charged the proper amount. The Organization reviews and adjusts allocations annually but makes changes on a prospective basis. Criteria: Per Uniform Guidance, 200.430 Compensation ? personal services (i) Standards for Documentation of Personnel Expenses, (viii) Budget estimates alone do not qualify as support for charges to Federal awards, but may be used for interim accounting purposes, provided that: (c)the non- Federal entity?s system of internal control includes processes to review after-the ? fact interim charges made to a Federal award based on budget estimates. Cause: The Organization?s internal control does not include a process for adjustments to estimated percentages for charging employee time. Effect: There was approximately $56,000 in payroll expense charged to the program based on estimates established at the beginning of the fiscal year but not reviewed after- the ? fact. Recommendation: We recommend the Organization develop a process for reviewing the percentages used to charge employee time during the fiscal year and update accounting records accordingly. Views of Responsible Officials: Management agrees with the finding and is implementing a daily timesheet tracking system.

Corrective Action Plan

Audit Finding associated with program - U.S. Department of Health and Human Services- Opioid STR (ALN 93.788) Activities Allowed or Unallowed, Allowable Costs/Cost Principles Finding Reference Number: 2022-001 Description of Finding: During the audit, it was noted that employee time charged to multiple programs was based on an estimated percentage of time established at the beginning of the fiscal year. This methodology is allowable when an after - the - fact review of the estimate is completed to ensure the federal award is charged the proper amount. The Organization reviews and adjusts allocations annually but makes changes on a prospective basis. Statement of Concurrence: Substance Abuse Services agrees with audit finding 2022-001. Corrective Action: The Organization's board and management are developing an efficient time tracking process for employees to designate actual time worked towards the applicable program, grant or contract. Weekly, department heads will monitor and review each employee's time logs. Following each payroll period, time will be recognized in the Organization's accounting records using actual time related to each appropriate program, grant or contract. In accordance with each program administrators (grantors) billing timeline, the Organization will process and provide supporting documentation utilizing actual time. Name of Contact Person Responsible for the Corrective Action: Contact Full Name: Denise Holden Contact Title: Chief Executive Officer Address: 100 North Cameron Street, Suite 401-E City: Harrisburg State: Pennsylvania Zip: 17101 Phone: (717) 232-8535 Anticipated Completion Date: The anticipated date for resolving the audit finding is September 15, 2023

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 58005 2022-001
    Material Weakness Repeat
  • 58006 2022-001
    Material Weakness Repeat
  • 58007 2022-001
    Material Weakness Repeat
  • 634446 2022-001
    Material Weakness Repeat
  • 634447 2022-001
    Material Weakness Repeat
  • 634448 2022-001
    Material Weakness Repeat
  • 634449 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.959 Block Grants for Prevention and Treatment of Substance Abuse $24,239
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $23,510
93.788 Opioid Str $15,890