Philadelphia Hospital and Health Care District 1199C Training and Upgrading Fund

2020-001: Payroll Grantor: U.S. Department of Education, Pass-Through Pennsylvania Department of Education Title: Adult Education - Basic Grants to States Contract #: FA064-20-0011 CFDA #: 84.002 Grant period: 07/01/19-06/30/20 SIGNIFICANT DEFICIENCY CONDITION: Timesheet reports reflecting the distribution of activity were not maintained for a salaried employee funded by the grant via a 25 percent local match, as part of requirements for the Adult Education and Family Literacy Guidelines, Section 609, Local Matching Funds, in the U.S. Department of Education Adult Education - Basic Grants to States grant. These timesheets must be documented and verifiable from the Fund records. CRITERIA: Electronic Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200-Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Section 306, Cost Sharing or Matching - Support of salaries and wages states that reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards. The reports must be signed by the individual employee, or by a responsible supervisory official having firsthand knowledge of the activities performed by the employee, that the distribution of activity represents a reasonable estimate of the actual work performed by the employee during the periods covered by the reports. Salaries and wages of employees used in meeting cost sharing or matching requirements on awards must be supported in the same manner as salaries and wages claimed for reimbursement from awarding agencies. Internal controls should be in place that provide reasonable assurance that employees are properly maintaining documented and verifiable timesheet records which are reviewed and approved by a supervisor. The timesheets should be retained in accordance with the record retention policies in place at the Fund. CAUSE: Timesheets were not prepared by the employee funded by the grant with a 25 percent local match. The internal controls surrounding review of timesheets were not effective. EFFECT: Because of the failure to ensure timesheets were prepared for employee who was meeting matching requirements on grant, there was a lack of documented and verifiable records maintained. The grant could have incorrectly covered costs for employees that would have been a local match. RECOMMENDATION: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements. In instances where there is matching of funds, the Fund should ensure that they have met all criteria as stipulated in the original grant budget. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Fund agrees with the finding and the recommended procedures have been implemented subsequent to year end. QUESTIONED COSTS - $0

2020-001 Payroll ? CFDA No. 84.002 Recommendation: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements. In instances where there is matching of funds, the Fund should ensure that they have met all criteria as stipulated in the original grant budget. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has reviewed our current policy and procedures and we will adjust the procedure to have Director confirm that prior to the submission of annual and quarterly grant reports and invoices, timesheets are reviewed to confirm that they are prepared in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements including appropriate signatures. Where there are grants with matching funds, the Fund will confirm that all criteria, including documentation via timesheets are present, confirming all criteria are met. Contributing factor to this audit finding resulted from the Public Health Emergency where remote work interrupted standard procedure. Name of contact person responsible for corrective action: Teresa Collins, Executive Director Corrective action plan has been implemented subsequent to year end.

2020-002: Payroll Grantor: U.S. Department of Labor, Pass through Pennsylvania Department of Labor & Industry, Philadelphia Works, Inc. Title: WIA Youth Activities Contract #: Y020-003, Y020-004, PW19-038 CFDA #: 17.259 Grant period: 07/01/19-06/30/20 SIGNIFICANT DEFICIENCY CONDITION: Four timesheets tested out of 50 timesheets were missing the supervisor sign off, which would denote review and approval of time spent working on grant. Of the four timesheets, both contained only the signature of the employee, but not the supervisor. CRITERIA: Electronic Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200-Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Section 430, Compensation - Personal Services - Support of salaries and wages states that reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards. The reports must be signed by the individual employee, or by a responsible supervisory official having firsthand knowledge of the activities performed by the employee, that the distribution of activity represents a reasonable estimate of the actual work performed by the employee during the periods covered by the reports. Internal controls should be in place that provide reasonable assurance that employees are properly maintaining documented and verifiable timesheet records which are reviewed and approved by a supervisor. The timesheets should be retained in accordance with the record retention policies in place at the Fund. CAUSE: Timesheets were not signed by the supervisor noting review and approval. The internal controls surrounding review of timesheets were not effective. EFFECT: The Fund should follow its developed policies and procedures in place surrounding payroll, which require program supervisor?s review and approval of program personnel timesheets. The timesheets should have physical documentation of the approval and be retained in accordance with record retention policies in effect. RECOMMENDATION: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared and reviewed in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Fund agrees with the finding and the recommended procedures have been implemented subsequent to year end. QUESTIONED COSTS - $0

2020-002 Payroll ? CFDA No. 17.259 Recommendation: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared and reviewed in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has reviewed our current procedure and will institute policy that Director reviews timesheets to confirm that they are prepared and reviewed in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements, including appropriate signatures on timesheets. Contributing factor to this audit finding resulted from the Public Health Emergency where remote work interrupted standard procedure. Name of contact person responsible for corrective action: Teresa Collins, Executive Director Corrective action plan has been implemented subsequent to year end.

2020-003: Payroll Grantor: U.S. Department of Labor, Pass-Through Pennsylvania Department of Labor & Industry, Philadelphia Works, Inc. Title: WIA Dislocated Workers Formula Grants Contract #: PW19-067 CFDA #: 17.280 Grant period: 07/01/19-06/30/20 SIGNIFICANT DEFICIENCY CONDITION: Timesheet reports reflecting the distribution of activity were not maintained for a salaried employee funded by the grant. These timesheets must be documented and verifiable from the Fund records. CRITERIA: Electronic Code of Federal Regulations, Title 2, Subtitle A, Chapter II, Part 200-Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards, Section 430, Compensation - Personal Services - Support of salaries and wages states that reports reflecting the distribution of activity of each employee must be maintained for all staff members whose compensation is charged, in whole or in part, directly to awards. The reports must be signed by the individual employee, or by a responsible supervisory official having firsthand knowledge of the activities performed by the employee, that the distribution of activity represents a reasonable estimate of the actual work performed by the employee during the periods covered by the reports. Internal controls should be in place that provide reasonable assurance that employees are properly preparing and maintaining documented and verifiable timesheet records which are reviewed and approved by a supervisor. The timesheets should be retained in accordance with the record retention policies in place at the Fund. CAUSE: Timesheets were not prepared by one employee funded by the grant. The internal controls surrounding preparation and review of timesheets were not effective. EFFECT: Because of the failure to ensure timesheets were prepared for employee who was working on grant, there was a lack of documented and verifiable records maintained. The grant could have incorrectly covered costs for employees who did not maintain timesheets. RECOMMENDATION: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared in accordance with Uniform Administrative Requirements Cost Principle and Audit Requirements for Federal Awards and related grant agreements VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTIONS: The Fund agrees with the finding and the recommended procedures have been implemented subsequent to year end. QUESTIONED COSTS - $30,037

2020-003 Payroll ? CFDA No. 17.280 Recommendation: We recommend that prior to submission of annual and quarterly grant reports and invoices, the Fund should review timesheets to determine that they are prepared in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Management has reviewed our current procedure and will institute policy that Director reviews timesheets to confirm that they are prepared and reviewed in accordance with Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards and related grant agreements, including appropriate signatures on timesheets. Contributing factor to this audit finding resulted from the Public Health Emergency where remote work interrupted standard procedure. Name of contact person responsible for corrective action: Teresa Collins, Executive Director Corrective action plan has been implemented subsequent to year end.