Illinois Chapter of American Academy of PediatricsNon-Profit

Finding 2022-004: Allocation and Documentation of Payroll Costs Federal Agency: Department of Health and Human Services Federal Program Name: Immunization Cooperative Agreements Assistance Listing Number: 93.268 Pass-Through Agencies: Chicago Department of Public Health and Illinois Department of Public Health Pass-Through Numbers: NH23IP922613, NH23IP000722-05-06, 5H23IP000722-03, 6NH23IP00722-04-04, and NH23IP922637 Award Periods: Various terms beginning and ending between May 1, 2020 and June 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters Criteria or Specific Requirement: Under allowable cost/cost principles, an organization in receipt of federal funding is required to have a system of controls in place to safeguard assets and ensure that only allowable costs are charged to federal programs. 2 CFR Part 200 states that charges to awards for salaries and wages are to be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: In testing a sample of 16 payroll transactions, we identified the following: ? 10 of the 16 transactions were not recorded in accordance with the supporting documentation for the specific employee?s payroll allocation ? One payroll transaction did not have proper timesheet approval ? All payroll registers including these payroll transactions were not reviewed and approved prior to final payroll processing and submission Questioned costs: None Context: The Chapter is documenting its allocation payroll costs and time and efforts to the grants on a biweekly basis. However, these allocations are modified during the vouching process in order to fit within budgets and contract agreements. Therefore, the Chapter is not adhering to its internal controls in documenting time and efforts estimates used produce reasonable approximations of the activity actually performed. Cause: Procedures for the allocation of employee time in full compliance with the Uniform Guidance have not yet been fully implemented. Effect: Inaccurate payroll costs may be charged to federal programs if the Chapter does not have procedures in place to monitor and record employee time devoted to federal programs. Repeat finding: This finding is not a repeat finding. Recommendation: Management should develop a process whereby payroll costs allocated to federal grants are supported by a system of internal controls which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reasonably reflect the total activity for which the employee is compensated, and support the distribution of the employee?s wages among specific activities or cost objectives if the employee woks on more than one federally funded program. These estimates should be properly reflected during the vouchering process. Views of Responsible Official: There is no disagreement with this finding.

GSA_MIGRATION