ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-001
Noncompliance – Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award.
Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred.
Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement.
Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-002
Noncompliance - Allowable Costs/Cost Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires that charges to federal awards for personnel expenses must be based on records that accurately reflect the work performed, which must be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and reasonably reflect the total activity for every employee (salary or hourly) who charges time to the federal grant.
Condition: The Organization’s system of time and effort reporting is not designed to meet the requirements of OMB Uniform Guidance. Timesheets were not maintained by salaried employees who charged time to the federal grant.
Cause: The Organization’s staff did not receive training specific to the Standards for Documentation of Personnel Expenses contained within OMB Uniform Guidance that would have enabled them to comply with this requirement.
Effect or Potential Effect: Employee costs charged to the federal grant cannot be compared to recorded hours for verification.
Questioned Costs: None
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of time and effort reporting that will meet the Standards for Documentation of Personnel Expenses included in OMB Uniform Guidance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U. S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2022-004
Allowable Costs/Costs Principles
Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The Organization did not design, document, and implement a system of internal control over compliance that meets the requirements of OMB Uniform Guidance.
Cause: Organization’s staff did not receive training on OMB Uniform Guidance guidelines specific to internal control over compliance.
Effect or Potential Effect: There is no system in place that would prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization’s staff should obtain additional training on Uniform Guidance and federal grant management and create a system of internal control over compliance.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.