Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.
Section III - Federal and State Award Findings and Questioned Costs U.S. Department of Health and Human Services, Grants for Capital Development in Health Centers (Assistance Listing Number 93.526); COVID-19 - Activities to Support State, Tribal, Local and Territorial (STLT) Health Department Response to Public Health or Healthcare Crises (Assistance Listing Number 93.391), Federal Communications Commission, COVID-19 - COVID-19 Telehealth Program (Assistance Listing Number 32.006), U.S. Department of Homeland Security, COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) (Assistance Listing Number 97.036) Item 2022-003 - Allowable costs Criteria In accordance with Uniform Guidance, 2 C.F.R. Part 200, Subpart E, adequate documentation must be available to support costs charged to federal awards. Purchasing processes set clear guidance, standards and procedures that must be followed by employees who have been granted the authority to make purchases per the Center's policies. Strong internal purchasing controls and processes should be developed, documented and consistent across all departments. The Center's employees should follow the established processes and policies when purchasing goods and services for and on behalf of the Center. In addition, policies and procedures for invoice processing activities and transactions should be followed to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source. Statement of Condition The Center does not have robust policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system being followed. In addition, general ledger account distributions and funding sources were not properly shown on the invoice package in accordance with the Center's policies and procedures. The Center receives funding from various governmental agencies. Each grant/contract requires the submission of expenditure reports containing information as to how the grant/contract was spent. These reports cover different periods. The chart of accounts currently used by the Center does not identify expenses by funding source. Documentation supporting the expenses charged to each grant/contract are maintained outside the general ledger on spreadsheets. Furthermore, the Center is recording all the activities for grants and contracts into one revenue and receivable account. This process makes it difficult to determine the status of individual grants or contracts revenues as well as the receivables. Questioned Costs None Context General ledger account distributions and funding sources were not properly shown on the invoice package. During the test of disbursements for our audit, it was noted that 98 samples tested out of 105 (of which 49 are related to the compliance test) were lacking the appropriate documentation to support that the expenditures were reviewed and properly coded to the correct general ledger account and funding source. The expenses tested appeared to be reasonable expenditures in accordance with the terms of the contract. Cause The Center does not have adequate policies and procedures relating to the purchasing process; thus, there is no formal and approved purchasing system for employees to adhere to. In addition, the Center does not have a system in place to track the grants and contracts by funding source in the general ledger. Lastly, the Center has formal policies and procedures for invoice processing and approval; however, the procedures were not followed. Effect Without proper purchasing policies and procedures in place, employees do not have any guidance to follow. This allows the opportunity for unauthorized expenditures to be made. In addition, without proper inclusion of general ledger account distributions and funding sources on the invoice package, there is no documented evidence that in those instances the expenditures were properly coded to the correct general ledger account and funding source. This can result in inaccurate vouchering and reporting. Lastly, the time and effort required to prepare the expenses on spreadsheets is labor intensive and time consuming. Identification as a Repeat Finding Condition is a repeat finding. See prior year finding 2021-003. Recommendation We recommend that the Center implement strong internal purchasing controls policies and procedures. An effective purchasing process can help prevent theft, fraud or irregular spending since it requires documenting all business transactions. Furthermore, we recommend the Center document the general ledger account distributions and funding sources on either the purchase request or invoice. This will ensure that expenditures are being coded and charged to the proper accounts/sources of funding. The Center should revise its chart of accounts to segregate expenses by funding source. In addition, accounting procedures will need to be implemented to separate expenses by funding source at the time of the posting to the general ledger. Once implemented, revenue and expense reports by grant/contract may be generated covering the periods required to be reported to the funding agency. This will improve the Center's accountability for grant/contract funds and ease the preparation of the required expenditure reports. Lastly, we recommend that all contracts and grants have a separate general ledger account for their respective revenues and receivables. This will allow the Center to easily monitor the status of each grant or contract service provided and properly manage its receivables. Views of Responsible Official The Center has already updated the policies in 2023 to include strong internal purchasing controls and procedures, and has fully implemented the policy going forward. In addition, the Center has already implemented a new invoice processing software to ensure that expenditures are properly tracked by coding the expenditures to the correct general ledger account and funding source.