Finding Text
Finding 2022-001 Information on the Federal Program: Federal Agency: United States Department of Health and Human Services Assistance Listing No.: Research and Development Cluster (various Assistance Listings) Award Periods: Various Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): The Uniform Guidance 2 CFR Section 200.303 states, ?The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).? 45 CFR Part 75 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, Appendix IX to Part 75 ? Principles for Determining Costs Applicable to Research and Development Under Grants and Contracts with Hospitals, states: ?Charges for salaries and wages of individuals other than members of the professional staff will be supported by daily time and attendance and payroll distribution records. For members of the professional staff, current and reasonable estimates of the percentage distribution of their total effort may be used as support in the absence of actual time records. In order to qualify as current and reasonable, estimates must be made no later than one month (though not necessarily a calendar month) after the month in which the services were performed. Estimates determined before the performance of services, such as budget estimates on a monthly, quarterly, or yearly basis do not qualify as estimates of effort spent.? Section III ? Federal Award Findings and Questioned Costs (continued) Condition: Charges of salaries and wages to the R&D Cluster were not consistently reviewed by a knowledgeable individual or not certified timely. In addition, certain individuals? effort certification did not account for 100% of their effort (R&D and institutional). Cause: The Organization does have not internal controls in place to monitor that 100% of effort is certified, and the effort is certified timely and reviewed and approved by a knowledgeable individual. Effect or Potential Effect: Charges for salaries and wages were charged to the R&D Cluster for individuals who did not certify their effort or 100% of their effort. In addition, the lack of internal controls over the review and approval of effort certification could result in unallowable charges for salaries and wages to be charged to the program. Questioned Costs: None Context: We selected a sample of 40 salaries and wages totaling $68,789 for the year ended December 31, 2022. We concluded effort certifications did not include 100% effort and were not reviewed and approved for 20 selections ($40,817). We also noted one instance ($1,965) which was not reviewed and approved timely. Total salaries and wages, fringe benefits, and indirect costs related to the R&D Cluster were $2,786,348 for the year ended December 31, 2022. Total R&D expenditures recorded on the Schedule of Expenditures of Federal Awards (the Schedule) are $3,323,540 for the year ended December 31, 2022. Section III ? Federal Award Findings and Questioned Costs (continued) Identification as a Repeat Finding, if Applicable: This is a repeat finding; see 2021-002. Recommendation: The Organization should implement internal controls to require individuals to certify 100% of their effort on a monthly basis to ensure that salaries and wages are based on actual efforts spent. The Organization should design and implement internal controls to review and approve the effort certified by an individual with knowledge of the employee?s effort on a timely basis. Management?s Response: The Office of Sponsored Research (OSR) committed in the 2020 Corrective Action Plan to implement a paper format effort certification process beginning March 2022. This process was fully implemented by the end of fiscal 2022. Also in 2022, Advocate Aurora Research Institute employees were transferred and integrated under one financial system. The integration of this system supports the monitoring of 100% of total effort. The OSR will also continue to utilize a paper effort certification process. The OSR team will generate effort certification form, distribute the effort certification form to the appropriate team member for manual or electronic signature and obtain a secondary approval signature from an individual who has first-hand knowledge of the team member?s activities. All completed effort certification forms will be verified and initialed by a third individual. Effort certification logs will be maintained to ensure that all effort certifications are completed within 30 days. Completed effort certification forms will be maintained within OSR.