2022-001 U.S. Department of Health and Human Services, Cluster 477: Temporary Assistance for Needy Families, AL No. 93.558; Community Services Block Grant, AL No. 93.569 ACTIVITIES ALLOWED/UNALLOWED; ALLOWABLE COST / COST PRINCIPLES; ELIGIBILITY Condition: Procedures and processes for gift cards did not exist to adequately capture information necessary for tracking, reporting, and monitoring gift card purchases, uses, and distribution. Gift cards were not inventoried or otherwise tracked after approved purchase complete. No subsequent documentation after purchase to track the individual card or report the eligible individual receiving the assistance. Criteria: Effective controls over gift cards are required to ensure grant funds are disbursed to eligible participants for allowable grant expenses. Controls should include procedures and processes to accurately document and monitor the purchase, access to, and distribution of gift cards to support proper safeguards, disbursement, and reporting. Cause: In response to the COVID-19 emergency and determining the best process to implement use of the gift cards through the work plan and address immediate community needs, the Organization determined gift cards to be a program supply, similar to other food related assistance provided to program participants. Effect: Controls did not exist to adequately document, track, and monitor the gift card from purchase to distribution to an eligible individual. As a result, gift cards may have been distributed to ineligible individuals, or for unallowable uses. In addition, gift cards are more susceptible to fraud, waste and abuse in the absence of adequate controls. Unallowable costs, including distribution to ineligible participants could be required to be returned. Questioned Cost and Context: Due to the absence of significant controls and lack of supporting documentation related to purchased gift cards, all gift cards purchased under the program, totaling $172,730 are considered a questioned cost. Recommendation: Procedures should be implemented to ensure proper controls over gift cards in accordance with Federal requirements. Adequate documentation should be maintained to support controls in place and purchase of gift card through distribution to an eligible individual, by the unique identifying card number. Procedures should include additional oversight and monitoring over gift cards on hand. Grantee?s Response: Management concurs. During the period under audit, turnover in program management resulted in a loss of program experience, related to gift cards. A permanent program director has was placed subsequent to year-end and has implemented several changes. Changes include additions to processes, file documentation, and controls over the various assistance types. Controls and other program processes continue to be evaluated to ensure accurate recording, tracking, reporting and monitoring of program expenses, individual program participation assistance, and assets, such as cash, gift cards, and other program supplies.
2022-001 U.S. Department of Health and Human Services, Cluster 477: Temporary Assistance for Needy Families, AL No. 93.558; Community Services Block Grant, AL No. 93.569 ACTIVITIES ALLOWED/UNALLOWED; ALLOWABLE COST / COST PRINCIPLES; ELIGIBILITY Condition: Procedures and processes for gift cards did not exist to adequately capture information necessary for tracking, reporting, and monitoring gift card purchases, uses, and distribution. Gift cards were not inventoried or otherwise tracked after approved purchase complete. No subsequent documentation after purchase to track the individual card or report the eligible individual receiving the assistance. Criteria: Effective controls over gift cards are required to ensure grant funds are disbursed to eligible participants for allowable grant expenses. Controls should include procedures and processes to accurately document and monitor the purchase, access to, and distribution of gift cards to support proper safeguards, disbursement, and reporting. Cause: In response to the COVID-19 emergency and determining the best process to implement use of the gift cards through the work plan and address immediate community needs, the Organization determined gift cards to be a program supply, similar to other food related assistance provided to program participants. Effect: Controls did not exist to adequately document, track, and monitor the gift card from purchase to distribution to an eligible individual. As a result, gift cards may have been distributed to ineligible individuals, or for unallowable uses. In addition, gift cards are more susceptible to fraud, waste and abuse in the absence of adequate controls. Unallowable costs, including distribution to ineligible participants could be required to be returned. Questioned Cost and Context: Due to the absence of significant controls and lack of supporting documentation related to purchased gift cards, all gift cards purchased under the program, totaling $172,730 are considered a questioned cost. Recommendation: Procedures should be implemented to ensure proper controls over gift cards in accordance with Federal requirements. Adequate documentation should be maintained to support controls in place and purchase of gift card through distribution to an eligible individual, by the unique identifying card number. Procedures should include additional oversight and monitoring over gift cards on hand. Grantee?s Response: Management concurs. During the period under audit, turnover in program management resulted in a loss of program experience, related to gift cards. A permanent program director has was placed subsequent to year-end and has implemented several changes. Changes include additions to processes, file documentation, and controls over the various assistance types. Controls and other program processes continue to be evaluated to ensure accurate recording, tracking, reporting and monitoring of program expenses, individual program participation assistance, and assets, such as cash, gift cards, and other program supplies.