HORIZON HOUSE/DELAWARE, INC.

Information on Federal Program - Block Grants for Prevention and Treatment of Substance Abuse - CFDA No. 93.959 - U.S. Department of Health and Human Services - Delaware Department of Services for Children, Youth, and Their Families - Division of Prevention and Behavioral Health Services ? Sub-Award 19-15567/19-15609. Criteria ? The Code of Federal Regulations Section 200.405(d) states that if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. Condition ? During our testing of payroll expenses, we noted the following exceptions: ? Forty payroll expenses were sampled with the population defined by pay period and then by employee. One salaried employee that made up several sample selections in various pay periods had an allocation between two federally funded programs; both programs are funded under CFDA No. 93.959. The allocation support for this salaried employee did not match the allocation applied. ? As a result of the above exception, an analysis was performed for other salaried employees. It was determined that the payroll expense for a second salaried employee, who had an allocation between a federal program under CFDA No. 93.959 and several non-federal programs, had allocation support that did not match the allocation applied which resulted in the non-federal programs incurring additional cost. Cause ? Personnel action forms with an approved allocation were not timely entered into the payroll application which resulted in an inaccurate allocation recorded to each program. Potential Effect ? While the impact of the exceptions and analysis of other potential exceptions did not result in any questioned costs, the failure of controls in place to detect these exceptions could have resulted in reportable questioned costs. Context ? We tested a sample of forty payroll expenses using a statistically valid sample and found a recurring exception relating to the allocation of one salaried employee as noted in the condition. Based on the nature of the exception, an analysis was performed to determine whether similar exceptions may be present. This analysis indicated that the exception was not isolated to one salaried employee and led to the identification of a second salaried employee whose allocation was not properly supported as noted in the condition. Recommendation - We recommend that HHDI ensure its policies and procedures are followed on a consistent basis and consider incorporating new detective controls to ensure allocated costs are accurately recorded. Views of Responsible Officials ? Management agrees with the finding and recommendation set forth within and has developed a corrective action pan to address the instances of noncompliance identified and lapses in internal control.