Lutheran Social Services of Southern California

Significant Deficiency ? Allowable Costs Finding 2019-003 ? Payroll Federal CFDA Number ? 93.778 Program Name ? Medical Assistance Program Criteria: Only time worked on the Medical Assistance Program can be charged directly to that program. Condition: Marcum selected 40 employees for payroll testing. Upon receiving support for these selections, 1 employee who was selected for testing for pay period 3/31/2019 was not employed during that time. However, upon review of the payroll register, this employee was processed through the payroll system as active, despite never receiving actual payment for the period. The payroll costs associated with this employee was charged to the Medical Assistance Program in error. The total amount of payroll expense that was incorrectly charged to the program was $256.01. Cause: The payroll for this employee was unintentionally processed through the payroll system for this pay period and the employee never received actual payment. Questioned Costs: $256.01 Context: Management believes this finding represents an isolated error in payroll processing that caused the Organization to charge unallowable costs to the program. The payroll system was made aware of this error and is in the process of correcting. Reported as a Finding in Prior Year: No Recommendation: Verify employee status prior to processing payroll for each payroll period. Views of Responsible Officials Planned Corrective Action: See management?s response to findings and corrective action plan included with this package.

Finding 2019-003 ? Allowable Costs Description of Finding: $256 of payroll costs were incorrectly charged to the Medical Assistance Program grant Statement of Concurrence or Nonconcurrence: Lutheran Social Services of Southern California agrees with the finding and is putting a corrective action plan in place as outlined below: Corrective Action: Management believes this finding represents an isolated error in the payroll processing that caused the agency to charge unallowable costs to the program. The payroll provider has been made aware of this error and is in the process of correcting it. Expected Completion: September 30, 2020