Finding Text
Finding 2023-001 – Special Tests and Provisions – Key Personnel
Information of the federal program:
Research and Development (R&D) Cluster
Federal Grantor: U.S. Department of Health and Human Services
Pass-Through Grantor: Oregon Health & Science University
Assistance Listing No.: 93.847
Pass-Through Award Number: 1020881_STLUKES
Pass-Through Award Period: 09/03/2021-12/31/2023
Pass-Through Grantor: University of Southern California
Assistance Listing No.: 93.837
Pass-Through Award Numbers: 117726140/SCON-00003287; 117726140/SCON-00005033
Pass-Through Award Period: 03/22/2019-02/29/2024
Pass-Through Grantor: The Curators of the University of Missouri on Behalf of University of Missouri at Kansas City
Assistance Listing No.: 93.103
Pass-Through Award Numbers: 00119058/00079685
Pass-Through Award Period: 09/30/22-09/29/2025
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control: “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).”
The Uniform Guidance 2 CRF Subpart D section 200.308(c) states the following: “For non-construction Federal awards, recipients must request prior approvals from Federal awarding agencies for the following program or budget-related reasons: (2) Change in a key person specified in the application or the Federal award; (3) The disengagement from the project for more than three months, or a 25 percent reduction in time devoted to the project, by the approved project director or principal investigator.”
Condition:
Saint Luke’s Health System, Inc. (the System) did not obtain or timely obtain prior approval from Federal awarding agencies for changes in effort of key personnel specifically named in the federal award.
Cause:
Management did not have suitably designed internal controls to monitor changes in effort throughout the year and to ensure the required approval from Federal awarding agencies was obtained on a timely basis.
Effect or potential effect:
The System is not in compliance with 2 CRF Subpart D section 200.308(c) and the terms and conditions of the federal program regarding key personnel.
Questioned costs:
$25,045 was calculated as the salaries, benefits, and indirect costs expensed to the federal award for the months where the key personnel’s change in effort was more than 25% for the key personnel in question and not reported to the federal award agency.
Assistance Listing No. 93.837
Pass-Through Grantor: University of Southern California
Pass-Through Award Numbers: 117726140/SCON-00003287; 117726140/SCON-00005033
Salaries and Benefits – $17,638
Indirect Costs – $7,407
Total – $25,045
Context:
The required approval from the Federal awarding agency was not obtained or not obtained timely for a total of six key personnel (17%) out of a population of 35 key personnel specifically named in the federal awards as key personnel for whom a prior approval is required for a significant change in effort. Out of the total of six changes in effort of key personnel that were more than 25% lower than the committed effort per the agreement, there were four (11%) changes where the required approval was not obtained and there were two (6%) changes where the required approval was not obtained timely.
Total R&D Cluster program expenditures were $1,482,128 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Saint Luke’s Health System should implement an internal control over the monitoring of changes in effort of key personnel to enable compliance with prior approval requirements of the federal program.
Views of responsible officials:
Quarterly reviews of key personnel effort were instituted in December 2023 to allow for timely identification and communication of potential changes in key personnel or significant reductions of effort.