Talbert House Health Center DBA Centerpoint HealthNon-Profit

Criteria: 2 CFR 200.430 established that all salaries and wages charged to Federal awards must be supported by a system of internal controls that provides reasonable assurance that the personnel costs incurred are accurate, allowable, and properly allocated. This includes a system to demonstrate that total compensation paid to individual employees is reasonable according to the work performed. Condition: During audit procedures, we tested 40 payroll costs charged to the ALN 93.224 Health Center Program Cluster. Time and effort reporting could not be located for any of the charges which documented the distribution of the employee’s salary and wages among specific grants by work performed. Cause: The Organization changed payroll systems during the year and did not implement procedures to properly track time and effort under the new system. Effect: The federal award may be overcharged or undercharged if actual effort differs from time charged to the award. Questioned Costs: $2,208,169 Context/Sampling: A sample of 40 payroll transactions were selected for testing representing $111,753 in payroll charges. A timecard was obtained for all selected transactions which verified that the employees worked the hours to support the charges to the grant. While the timecards reflected total hours worked, none of the timecards tested included detail that reflected the time spent working on the specific federal award. The sample was not, and was not intended to be, a statistically valid sample. Repeat Finding: No Recommendation: Management should establish policies and procedures that are consistent with the Uniform Guidance administrative requirements with regards to compensation and allowable costs which includes ensuring time and effort charges are based on records that accurately reflect the work performed. Views of Responsible Officials and Planned Corrective Action: There is no disagreement with the audit finding.