UTAH HEALTH POLICY PROJECTNon-Profit

2021-002 (Material Weakness): Compensation of personnel documentation standards Condition The Organization requires staff to maintain daily time records, including descriptions of the work performed, which are reviewed and signed by an appropriate supervisor each pay period. The Organization makes use of budget estimates in allocating staff time to all of its available federal and non-federal funding sources. Management regularly reassesses each staff member?s time and makes adjustments to its labor allocations. However, the Organization did not adequately document its process to compare budgetary information used in creating allocations to actual information. Criteria According to 2 CFR Part 200.430, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.? Although the documentation standards indicate that ?budget estimates?may be used for interim accounting purposes, provided that the system for establishing the estimates produces reasonable approximations of the activity actually performed, and significant changes in the corresponding work activity are identified and entered into the records in a timely manner,? it also requires that ?the non-federal entity?s system of internal controls include processes to review after-the-fact interim charges made on budget estimates? and that ? all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? Effect A risk exists that final salary amounts charged to the federal grant may not be accurately allocated. Repeat Finding Finding 2020-002. Recommendation The Organization should take action to improve its document trail to support its comparison of budgetary information to actual information used in creating labor allocations. Alternatively, the Organization could create policies and procedures to allocate labor based on monthly actual time and effort, rather than using budgetary and estimated information that requires subsequent true up. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. The Organization will implement a new payroll solution that will provide the necessary tools to improve their documentation trail in creating labor allocations. They will also improve related allocation policies and procedures. Management will implement these changes in January 2022.

2021-003 (Material Weakness): Allocation method documentation Condition The Organization allocates costs that are shared among multiple federal and non-federal programs using a standard allocation that is developed on a monthly basis. The Organization makes use of budget estimates and considers future expectations in developing its standard monthly allocation. However, the Organization did not adequately document its process to evaluate allocations against actual conditions and to show a traceable relationship. Criteria According to 2 CFR 230 Appendix A, in determining allocation bases for costs, ?actual conditions shall be taken into account in selecting the base to be used. The essential consideration in selecting a method or a base is that it is the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived? or that there is a ?traceable cause and effect relationship.? Effect A risk exists that shared direct or indirect costs may not be accurately allocated to the federal grant. Repeat Finding Finding 2020-003. Recommendation The Organization should take action to improve its document trail to support its comparison of budgetary information to actual information used in creating shared cost allocations. Alternatively, the Organization could create policies and procedures to allocate shared costs based on an actual cost driver throughout the year, rather than using budgetary and estimated information that requires subsequent true up. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. In conjunction with its improvements in compensation of personnel documentation, the Organization has developed a plan for documenting the use of actual cost drivers in allocating shared costs. Management implemented and continues the new system as of January 2022.

2021-004 (Noncompliance): Reporting Errors in FFR (Federal Financial Report) Condition One of the two FFRs filed during the year contained numerical errors. Criteria The Organization is required to submit an FFR semi-annually. This report contains key summary information, such as cash receipts, cash disbursements, and total federal expenditures under the grant. Cause A significant factor contributing to this error was that the Payment Management System (PMS) was experiencing technical difficulties. The Organization contacted support representatives for PMS several times, who were not able to resolve the technical problems very quickly. Effect Inaccurate information related to the grant was temporarily reported to the federal government and the general public. Recommendation The Organization should implement procedures to ensure that all FFRs submitted to the federal government are complete and accurate. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. The Organization has revised and resubmitted the FFR containing the errors. In addition, management will evaluate its procedures related to preparing and submitting FFRs. These improvements will be implemented in 2022.

2021-005 (Noncompliance): Late Filing of FFATA Reports Condition The auditors tested all FFATA reports required to be filed by the organization during the year. We noted that all required FFATA reporting was completed, but three filings were submitted after the required deadline. Criteria During the year ended December 31, 2021, the FFATA reporting requirement was effective for the Organization. The law requires that Grant, Cooperative Agreement, and contract recipients report information related to subawards issued which have an obligation of $25,000 or greater by the end of the month following the month in which the subaward agreement or modification was fully executed. These reports are required to be submitted once each time a sub agreement or modification is fully executed for all applicable awards. Effect The information required to be reported under FFATA was not made available to the public in a timely manner. Repeat Finding Finding 2020-005. Recommendation Management should emphasize the importance of compliance with FFATA submission requirements to applicable personnel and improve policies and procedures to ensure reporting requirements are timely met. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with the findings and the auditor?s recommendations. Management has emphasized the importance of FFATA compliance and identified key control points to strengthen existing operating procedures for FFATA reporting procedures. They have designed improved internal control procedures, which were implemented in September 2021.

2020-002 (Material Weakness): Compensation of personnel documentation standards Condition The Organization requires staff to maintain daily time records, including descriptions of the work performed, which are reviewed and signed by an appropriate supervisor each pay period. The Organization makes use of budget estimates in allocating staff time to all of its available federal and non-federal funding sources. Management regularly reassesses each staff member?s time and makes adjustments to its labor allocations. However, the Organization did not adequately document its process to compare budgetary information used in creating allocations to actual information. Criteria According to 2 CFR Part 200.430, ?Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed.? Although the documentation standards indicate that ?budget estimates?may be used for interim accounting purposes, provided that the system for establishing the estimates produces reasonable approximations of the activity actually performed, and significant changes in the corresponding work activity are identified and entered into the records in a timely manner,? it also requires that ?the non-federal entity?s system of internal controls include processes to review after-the-fact interim charges made on budget estimates? and that ? all necessary adjustments be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated.? Effect A risk exists that final salary amounts charged to the federal grant may not be accurately allocated. Recommendation The Organization should take action to improve its document trail to support its comparison of budgetary information to actual information used in creating labor allocations. Alternatively, the Organization could create policies and procedures to allocate labor based on monthly actual time and effort, rather than using budgetary and estimated information that requires subsequent true up. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. The Organization plans to review its time and attendance and labor allocation documentation procedures to improve support of labor allocations. Internal control procedures will be updated in 2022.

2020-003 (Material Weakness): Allocation method documentation Condition The Organization allocates costs that are shared among multiple federal and non-federal programs using a standard allocation that is developed on a monthly basis. The Organization makes use of budget estimates and considers future expectations in developing its standard monthly allocation. However, the Organization did not adequately document its process to evaluate allocations against actual conditions and to show a traceable relationship. Criteria According to 2 CFR 230 Appendix A, in determining allocation bases for costs, ?actual conditions shall be taken into account in selecting the base to be used. The essential consideration in selecting a method or a base is that it is the one best suited for assigning the pool of costs to cost objectives in accordance with benefits derived? or that there is a ?traceable cause and effect relationship.? Effect A risk exists that shared direct or indirect costs may not be accurately allocated to the federal grant. Recommendation The Organization should take action to improve its document trail to support its comparison of budgetary information to actual information used in creating shared cost allocations. Alternatively, the Organization could create policies and procedures to allocate shared costs based on an actual cost driver throughout the year, rather than using budgetary and estimated information that requires subsequent true up. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. The Organization plans to review its shared cost allocation procedures to improve documentary support and traceability to actual cost drivers. Internal control procedures will be updated in 2022.

2020-004 (Significant Deficiency): Documentation of approval for recurring payments Condition The auditor tested a sample of transactions to evaluate the effectiveness of controls related to processing transactions charged to the major program. The auditor identified 4 out of 60 transactions which did not contain documented evidence of supervisory approval. Each of these transactions which did not contain documented evidence of supervisory approval represented monthly recurring bills such as utility bills. Criteria Supervisory approval of expenses charged to federal grants is an important internal control to help ensure that expenses are allowable costs for allowable activities and that expenses are properly allocated in accordance with the cost allocation plan. Effect The risk exists that costs could be allocated to federal grants that are not for allowable activities or expenses or that are not properly allocated in accordance with the cost allocation plan. Recommendation The Organization should implement policies and procedures to ensure that supervisory approval control procedures are consistently performed and documented, even for recurring transactions. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with this finding. The Organization plans to review its approval procedures relating to all expenses, including recurring transactions, and to improve documentary support of supervisory approvals.

2020-005 (Noncompliance): Late Filing of FFATA Reports Condition The auditors tested all FFATA reports required to be filed by the organization during the year. We noted that all required FFATA reporting was completed, but the filings were submitted after the required deadline. Criteria During the year ended December 31, 2020, the FFATA reporting requirement was effective for the Organization. The law requires that Grant, Cooperative Agreement, and contract recipients report information related to subawards issued which have an obligation of $25,000 or greater by the end of the month following the month in which the subaward agreement or modification was fully executed. These reports are required to be submitted once each time a sub agreement or modification is fully executed for all applicable awards. Effect The information required to be reported under FFATA was not made available to the public in a timely manner. Recommendation Management should emphasize the importance of compliance with FFATA submission requirements to applicable personnel and improve policies and procedures to ensure reporting requirements are timely met. View of Responsible Officials and Planned Corrective Actions Utah Health Policy Project agrees with the findings and the auditor?s recommendations. Management has emphasized the importance of FFATA compliance and identified key control points to strengthen existing operating procedures for FFATA reporting procedures. Internal control procedures will be updated in 2021.