U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-01: Segregation of Duties
Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately.
Condition: Key duties and functions are not segregated among Organization personnel. This is especially a concern in the cash management, account receivable, accounts payable, and payroll functions.
Effect: Transaction could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information.
Cause: There are a limited number of personnel for certain functions and lack of board oversight.
Identification of a repeat finding: No.
Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-02: Maintenance of the General Ledger
Criteria: The Organization is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data.
Condition: The Organization currently maintains its general ledger on the cash basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board.
Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data.
Cause: There are no procedures in place to ensure records are kept on an accrual basis.
Identification of a repeat finding: No.
Recommendation: We recommend that the Organization implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-03: Approval for expenditures
Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. Approvals should be noted on all expenditures by an individual outside of the recordkeeping and custody functions to provide reasonable assurance that transactions are allowable and appropriate for the Organization.
Condition: The Organization does not consistently document an approval process on source documents for expenditure.
Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities.
Cause: There are no procedures in place to ensure source documents are consistently approved by a member of management prior to payment.
Identification of a repeat finding: No.
Recommendation: We recommend that a member of management or the Board of Directors review and authorize all disbursements, as well as travel reimbursements. This authorization should be evidenced by the initialing of each disbursement reviewed. We also recommend that care be taken to ensure the payee is not approving reimbursements to themselves and that a member of the Board approves those reimbursements.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-04: Documentation for expenditures
Criteria: The Organization is responsible for maintaining original documentation for all expenditures. Transactions for expenses should be evidenced by an invoice or other original documentation demonstrating the validity of the disbursement.
Condition: The Organization does not consistently maintain documentation for all expenditures, especially those expended with the Organization’s credit card.
Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities.
Cause: There are no procedures in place to ensure that original source documents are obtained prior to payment.
Identification of a repeat finding: No.
Recommendation: We recommend that appropriate documentation is kept for all disbursements, and that credit card receipts are obtained for each purchase and kept with the appropriate statement.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-05: Timeliness of Deposits
Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200.305. A non-Federal entity must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity.
Condition: The Organization did not deposit funds from the pass-through entity in a timely manner.
Effect: Failure to have an adequate policy and procedure regarding cash management could result in misappropriation of assets and material misstatements in financial statements.
Cause: Lack of policies and procedures regarding cash management and recording deposits.
Identification of a repeat finding: No.
Recommendation: We recommend that the Organization ensure to deposit funds received in a timely manner as to avoid misappropriation of assets and misstatements in financial statements.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-01: Segregation of Duties
Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately.
Condition: Key duties and functions are not segregated among Organization personnel. This is especially a concern in the cash management, account receivable, accounts payable, and payroll functions.
Effect: Transaction could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information.
Cause: There are a limited number of personnel for certain functions and lack of board oversight.
Identification of a repeat finding: No.
Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-02: Maintenance of the General Ledger
Criteria: The Organization is responsible for preparing annual financial statements in accordance with generally accepted accounting principles (GAAP). The records should be kept on an accrual basis to ensure accurate financial information is being reported to prevent critical financial decisions from being made on erroneous data.
Condition: The Organization currently maintains its general ledger on the cash basis throughout the year. Failure to record accruals of revenue and expenditures distorts the financial information that is provided to management and the Board.
Effect: Misleading financial information could be presented, which could lead to financial decisions being made on erroneous data.
Cause: There are no procedures in place to ensure records are kept on an accrual basis.
Identification of a repeat finding: No.
Recommendation: We recommend that the Organization implement a procedure in which records are kept on the cash basis throughout the year and accrual adjustments be made at year end.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-03: Approval for expenditures
Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. Approvals should be noted on all expenditures by an individual outside of the recordkeeping and custody functions to provide reasonable assurance that transactions are allowable and appropriate for the Organization.
Condition: The Organization does not consistently document an approval process on source documents for expenditure.
Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities.
Cause: There are no procedures in place to ensure source documents are consistently approved by a member of management prior to payment.
Identification of a repeat finding: No.
Recommendation: We recommend that a member of management or the Board of Directors review and authorize all disbursements, as well as travel reimbursements. This authorization should be evidenced by the initialing of each disbursement reviewed. We also recommend that care be taken to ensure the payee is not approving reimbursements to themselves and that a member of the Board approves those reimbursements.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-04: Documentation for expenditures
Criteria: The Organization is responsible for maintaining original documentation for all expenditures. Transactions for expenses should be evidenced by an invoice or other original documentation demonstrating the validity of the disbursement.
Condition: The Organization does not consistently maintain documentation for all expenditures, especially those expended with the Organization’s credit card.
Effect: Activities or costs that are not allowed or allowable could potentially be paid, as well as errors or intentional fraud could occur and not be detected timely by management in the normal course of their responsibilities.
Cause: There are no procedures in place to ensure that original source documents are obtained prior to payment.
Identification of a repeat finding: No.
Recommendation: We recommend that appropriate documentation is kept for all disbursements, and that credit card receipts are obtained for each purchase and kept with the appropriate statement.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report
U.S. Department of Health and Human Services
Health Resources and Services Administration
Health Care Center Program
CFDA 93.224
2023-05: Timeliness of Deposits
Criteria: The recipient is responsible for complying with audit requirements in accordance with 2 CFR 200.305. A non-Federal entity must minimize the time elapsing between the transfer of funds from the US Treasury or pass-through entity and disbursement by the non-federal entity.
Condition: The Organization did not deposit funds from the pass-through entity in a timely manner.
Effect: Failure to have an adequate policy and procedure regarding cash management could result in misappropriation of assets and material misstatements in financial statements.
Cause: Lack of policies and procedures regarding cash management and recording deposits.
Identification of a repeat finding: No.
Recommendation: We recommend that the Organization ensure to deposit funds received in a timely manner as to avoid misappropriation of assets and misstatements in financial statements.
Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 33 in this audit report.