Mathiesen Memorial Health Clinic

Federal program information: Funding agencies: Indian Health Services Titles: Demonstration Projects for Indian Health Assistance Listing Number: 93.933 Award year: 2022 Award numbers: N/A Pass-Through grantors: N/A Compliance Requirements: Allowable Costs Questioned Costs: $3,438 Criteria: Uniform guidance over cost principles states that entities should apply costs consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity. Condition: For 3 of 12 employees that had payroll expenses coded to the federal grant it was noted that the pay rates were not applied consistently between the grant and the entities other funding sources. Incorrect pay rates were used when allocating the related activity to the grant. Cause and Effect: The internal controls over the allocation process were not sufficient to detect errors in the process. Employee?s salaries and wages were allocated among different funding sources based on time spent. However, in some cases the pay rates were not updated to be consistent with the employee?s actual pay. This resulted in some payroll expenses being overallocated to the grant in excess of the actual amount paid to the employee. There was approximately $3,438 in excess wages recorded against the grant. Auditors? Recommendations: The organization should establish policies and procedures to ensure that payroll allocations are being calculated and recorded based on actual pay rates to ensure that costs are incurred equitably between all funding sources.