Audit 307747

Finding 2023–002 Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: Wisconsin Department of Health Services and Dane County Department of Human Services Criteria or Specific Requirement: Review and approval of all costs by a person with appropriate knowledge and authority is a requirement for ensuring costs are allowable. Condition and Context: Review and approval was not routinely documented in the fiscal year ending June 30, 2023. 8 of the 60 disbursements selected for testing were missing documentation of review and approval. 6 of the 8 were before January 1, 2023, when improvements were noted to be implemented. Cause: Routines and habits lapsed during the changes in operations, staffing and management. Effect or Potential Effect: Undocumented control procedures cannot be confirmed to have been performed. Repeat Finding: Yes Recommendation: ARC should implement procedures for documenting review and approval for all time sheets for all employees. Due to the late timing of the 6/30/22 and 6/30/23 audits, we noted evidence of Management’s implementation of the correction in the year ending June 30, 2023. Views of Responsible Officials: We concur with the recommendation, and a formalized process was implemented effective January 1, 2023. ARC implemented an electronic time record system that will require, track, and document performance of review and approval of employee's time and is monitored independently by the CFO.

Finding 2023–003 Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: Wisconsin Department of Health Services and Dane County Department of Human Services Criteria or Specific Requirement: Audits under Uniform Guidance are required to be submitted in the Federal Audit Clearinghouse within nine months of the fiscal year end. Condition and Context: Given the timing of the implementation of improvements and the performance of consecutive audits, the planning for audit of the year ending June 30, 2023 could not be started until January 2024. Consequently, ARC could not support the planning, performance and completion of the audit before 9-month period had passed. Cause: The 2023 audit started late due to the 2022 audit being completed in November of 2023. Management needed time to correct 2023 financial information that was inaccurate, caused by the turnover in accounting positions. ARC’s previous internal control system prior to recent hires did not ensure audits were routinely performed and completed. Effect or Potential Effect: The reporting requirement of Uniform Guidance is not met. Repeat Finding: Yes Recommendation: We recommend management continue to make the improvements in staffing and resources to ensure timely financial statement close and audit support. Due to the completion of the June 30, 2022 audit late calendar 2023, the audit of the year ending June 30, 2023 wasn’t able to be started with sufficient time to be issued before the 9-month requirement. Views of Responsible Officials: We concur with the recommendation. ARC has made significant enhancements to its accounting team in both experience and depth of knowledge Additionally processes and procedures to support planning, performing and completing the audit on time are utilized and have been in effect since January 1, 2023.

Finding 2023–002 Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: Wisconsin Department of Health Services and Dane County Department of Human Services Criteria or Specific Requirement: Review and approval of all costs by a person with appropriate knowledge and authority is a requirement for ensuring costs are allowable. Condition and Context: Review and approval was not routinely documented in the fiscal year ending June 30, 2023. 8 of the 60 disbursements selected for testing were missing documentation of review and approval. 6 of the 8 were before January 1, 2023, when improvements were noted to be implemented. Cause: Routines and habits lapsed during the changes in operations, staffing and management. Effect or Potential Effect: Undocumented control procedures cannot be confirmed to have been performed. Repeat Finding: Yes Recommendation: ARC should implement procedures for documenting review and approval for all time sheets for all employees. Due to the late timing of the 6/30/22 and 6/30/23 audits, we noted evidence of Management’s implementation of the correction in the year ending June 30, 2023. Views of Responsible Officials: We concur with the recommendation, and a formalized process was implemented effective January 1, 2023. ARC implemented an electronic time record system that will require, track, and document performance of review and approval of employee's time and is monitored independently by the CFO.

Finding 2023–003 Assistance Listing Number(s): 93.959 Name of Federal Program or Cluster: Block Grants for Prevention and Treatment of Substance Abuse Name of Federal Agency: Department of Health and Human Services Name of Pass-Through Entities: Wisconsin Department of Health Services and Dane County Department of Human Services Criteria or Specific Requirement: Audits under Uniform Guidance are required to be submitted in the Federal Audit Clearinghouse within nine months of the fiscal year end. Condition and Context: Given the timing of the implementation of improvements and the performance of consecutive audits, the planning for audit of the year ending June 30, 2023 could not be started until January 2024. Consequently, ARC could not support the planning, performance and completion of the audit before 9-month period had passed. Cause: The 2023 audit started late due to the 2022 audit being completed in November of 2023. Management needed time to correct 2023 financial information that was inaccurate, caused by the turnover in accounting positions. ARC’s previous internal control system prior to recent hires did not ensure audits were routinely performed and completed. Effect or Potential Effect: The reporting requirement of Uniform Guidance is not met. Repeat Finding: Yes Recommendation: We recommend management continue to make the improvements in staffing and resources to ensure timely financial statement close and audit support. Due to the completion of the June 30, 2022 audit late calendar 2023, the audit of the year ending June 30, 2023 wasn’t able to be started with sufficient time to be issued before the 9-month requirement. Views of Responsible Officials: We concur with the recommendation. ARC has made significant enhancements to its accounting team in both experience and depth of knowledge Additionally processes and procedures to support planning, performing and completing the audit on time are utilized and have been in effect since January 1, 2023.