Finding Text
Federal Program: Section 223 Demonstration Programs to Improve Community Mental Health Services
Federal Agency: U.S. Department of Health and Human Services
Pass-Through Entity: Not Applicable
Assistance Listing Number (ALN): 93.829
Federal Award Number: H79SM083269
Federal Award Year: December 31, 2022
Criteria: 2 CFR 200.430(i)(1)(i) & (vii) state that charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award, or a federal award and non-federal award
Condition/Context: Six of the twenty-five personnel transactions that were tested did not have evidence of approval for the amount allocated to the federal program. The Organization experienced an unusually elevated level of turn-over of key personnel in business operations during the period of time that the control procedures lapsed as the individuals replacing those responsible for attaining allocation authorizations were not yet hired or fully trained in their assignments.
The sample was not a statistically valid sample.
Cause: The Organization's control process for monthly program allocation authorizations was not properly implemented during the months of May and June of 2022.
Effect: Inadequate controls over the allocation of costs could result in unallowable costs being improperly applied to the federal program.
Questioned Costs: None noted
Recommendation: The Organization should have formal written procedure to ensure that all relevant authorization and reviews have been completed before allocating costs to federal programs.
Views of responsible officials: Management agrees with the auditors' finding and will take action to implement controlling procedures over federal programs.