Oregon Primary Care Association

Finding 2019-001 ? Inadequate Support for Payroll Time Study Spreadsheet Type of Finding: Significant deficiency in internal control over compliance and an instance of allowable costs/cost principles noncompliance Federal Awarding Agency: U.S. Department of Health and Human Services ? Office of Health Resources and Service Administration Federal Program: Technical and Non-Financial Assistance to Health Centers ? CFDA 93.129 Questioned Costs: None Criteria: Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 430 ? Compensation ? personal services, Part (i), Standards for Documentation of Personnel Expenses (1) requires that charges to the federal award for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that charges are accurate, allowable, properly allocated, and supported by adequate documentation. Condition: During testing of personnel expenses, it was noted that there was inadequate documentation supporting the time study spreadsheet. This time study spreadsheet is used to determine all employees? allocation for time spent on federal and non-federal programs based on actual hours worked for the pay period studied. It was noted that the employee hours reflected on the time study spreadsheet did not agree to the underlying time sheets. The underlying time sheets are the evidence of the actual hours an employee worked including supervisory approval. The accounting records did not include documentation to support approval or review of the differences between the time sheets and the time study spreadsheet. Cause: The internal controls in place with the intent to ensure that charges are accurate and properly allocated and supported by adequate documentation did not provide adequate support for the differences between the hours worked per the time study spreadsheet and the hours worked per the employees? time sheets. Effect of conditions: There could be errors in the amounts charged to the federal award for personnel expenses when there isn?t a system in place to ensure that the time study spreadsheet accurately reflects actual hours worked. Prevalence: Internal control design deficiency. Repeat Finding: No. Context: In performing procedures over the allocated payroll costs, we identified inconsistencies between the hours worked reflected in the time study spreadsheet and the hours worked reflected in the employees? time sheets. There were 2 time studies conducted during the year, and we identified discrepancies between the time sheets and the time study spreadsheet in both time studies conducted. Recommendation: We recommend that the Organization implement a process whereby the Organization verifies that the hours reflected in the time study spreadsheet be reviewed to ensure that the hours per the time sheets agree to the hours per the time study spreadsheet. We recommend that the review be documented by supervisor approval of the employee hours reflected on the time study spreadsheet. This documentation can be achieved through use of time study approval form and authorized by the supervisor of each employee. If there are acceptable differences between hours per the time sheets and hours per the time study spreadsheet, we recommend that the reason for these differences be documented and signed by the employee and supervisor. This can be documented on the same approval form. Management Response: Due to the timing of our payroll process, there are times in which exempt employees need to complete their time sheets in advance, and as exempt employees the hours entered are less significant than non-exempt employees. The Time Studies are completed, generally, after the time period being studied, therefor the Time Studies present a more accurate picture of the hours worked in various grants or contracts. Management agrees with the recommendation to have an updated process and will implement the Corrective Action Plan below.

Finding 2019-001 ? Inadequate Support for Payroll Time Study Spreadsheet Corrective Action Plan Responsible Person(s): Neil Kolikof, Senior Accountant is responsible for the Corrective Action Plan (CAP). Corrective Action Plan: A standard operating procedure (SOP) has been put in place to ensure that both the time sheets and the time studies are accurate and reflect the same amount of hours in both reports. Instructions are sent prior to the month that the time study is to be performed. All work days and grants are automatically populated on the time study. The following are required on the time study: ? Employee name ? Hours entered only for the days that worked, enter ?0? hours for days off entering the reason in the notes column of why you didn?t work, i.e. sick, vacation, holiday, ODO, etc. ? The hours must equal the amount of hours? allocation to specific funding streams ? The hours entered onto the Time Study must equal the amount of hours entered on employee time sheet. Anticipated Completion Date: The SOP was put into place in May 2019 and will be effective for the upcoming time study, currently planned for August 2019.

GSA_MIGRATION

GSA_MIGRATION