2023-001- Internal Control over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs and Cost Principles
Information on the Major Federal Program
U.S. Department of Health and Human Services Center for Disease Control and Prevention
Assistance Listing Number: 93.988
Assistance Listing Name: Cooperative Agreements for State-Based Diabetes Control Programs and Evaluation of Surveillance Systems
Grant Award Number(s): 1 NU58DP007372-01-00
Award Period: June 30, 2023 to June 29, 2028
Criteria or Specific Requirement –
The Uniform Guidance 2 CFR Section 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal control to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award.
In addition, per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally- financed program in either the current or a prior period.
g) Be adequately documented.
h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).”
Furthermore, according to the Uniform Guidance (2 CFR Part 200), specifically §200.430(i), “charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. The records must also be supported by the approval of an individual with firsthand knowledge of the work performed.
Condition - During our audit, within the tested sample of seven timesheets out of a population of twenty-six, three timesheets for employees charged to the federal program did not have proper approval in the system. The lack of signed approval indicates that the timesheets were not reviewed and approved by an individual with knowledge of the work performed, as required under the Uniform Guidance. ADA has documented expenditure policies and procedures. However, the review and approval process did not operate as designed.
Cause – ADA did not adhere to its internal policies and procedures to ensure timesheets were properly reviewed and approved.
Effect or Potential Effect – Without adequate internal controls in place to ensure costs are properly verified and approved, ADA could unallowably and inaccurately charge salary and wages expenditures to the federal program.
Questioned Costs – None
Context - This is a condition based on testing of ADA’s compliance. Based on tested samples, we noted four out of seven sampled timesheets were not properly approved in the system. The samples were selected using a non-statistical method.
Repeat Finding - This finding is not a repeat finding.
Recommendation - BDO recommends that ADA adhere to its documented policies and procedures to ensure all timesheets are reviewed and approved by authorized personnel with knowledge of the work performed. ADA should also provide training to all employees involved in the timesheet preparation and approval process to ensure compliance with the Uniform Guidance requirements.
Views of Responsible Officials: The findings were primarily related to a change that ADA made to the Human Resources Information System. Going forward, ADA will adhere to our documented policies and procedures to ensure all timesheets are reviewed and approved by authorized personnel with knowledge of the work performed. Additionally, we will provide training to all employees involved in the timesheet preparation and approval process to ensure compliance with the Uniform Guidance requirements.
2023-002 - Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Procurement, Suspension and Debarment
Information on the Major Federal Program(s)
U.S. Department of Health and Human Services Center for Disease Control and Prevention
Assistance Listing Number: 93.261
Assistance Listing Name: Scaling the National Diabetes Prevention Program Preventing Type 2 Diabetes Among People at High Risk
Grant Award Number(s): 6 NU58DP006364-05-05
Award Period: September 30, 2021 to September 30, 2023
Criteria or Specific Requirement –
In accordance with 2 CFR §200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
In accordance with §200.213 and §180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with §180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under §180.135.
Condition - During our testing of the procurement, suspension and debarment compliance requirements, we identified one procurement sample (out of a total of 1 procurement) that did not have documentation in the vendor/ procurement file to document that the debarment attestation from the vendor was provided and obtained prior to entering into contract with the vendor. The attestation statements directly from the vendor concluded that the vendor was not suspended or debarred. This is considered a finding as ADA did not follow its policy to maintain documentation in the vendor files (with a time stamp).
Cause - ADA did not adhere to its documented policies and procedures for ensuring proper suspension and debarment validations were performed before entering into a contract.
Effect or Potential Effect - Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government.
Questioned Costs - None.
Context - This is a condition based on testing of ADA’s compliance with specified requirements. The sample was selected using a non-statistical method.
Repeat Finding - This is not a repeat finding.
Recommendation - We recommend management ensure that suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its documented policy.
Views of Responsible Officials - The finding related to a vendor that was in place and performing work in advance of inclusion as a covered transaction. Going forward, ADA will ensure that suspension and debarment regulations are followed. ADA will also ensure that all required procurement documentation is maintained in conjunction with its documented policy.
2023-001- Internal Control over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs and Cost Principles
Information on the Major Federal Program
U.S. Department of Health and Human Services Center for Disease Control and Prevention
Assistance Listing Number: 93.988
Assistance Listing Name: Cooperative Agreements for State-Based Diabetes Control Programs and Evaluation of Surveillance Systems
Grant Award Number(s): 1 NU58DP007372-01-00
Award Period: June 30, 2023 to June 29, 2028
Criteria or Specific Requirement –
The Uniform Guidance 2 CFR Section 200.303 requires non-Federal entities receiving Federal awards establish and maintain internal control to reasonably ensure compliance with Federal statues, regulations, and the terms and conditions of the Federal award.
In addition, per 2 CFR Section 200.403, “Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under Federal awards:
a) Be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles.
b) Conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items.
c) Be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity.
d) Be accorded consistent treatment. A cost may not be assigned to a Federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the Federal award as an indirect cost.
e) Be determined in accordance with generally accepted accounting principles (GAAP), except, for state and local governments and Indian tribes only, as otherwise provided for in this part.
f) Not be included as a cost or used to meet cost sharing or matching requirements of any other federally- financed program in either the current or a prior period.
g) Be adequately documented.
h) Cost must be incurred during the approved budget period. The Federal awarding agency is authorized, at its discretion, to waive prior written approvals to carry forward unobligated balances to subsequent budget periods pursuant to § 200.308(e)(3).”
Furthermore, according to the Uniform Guidance (2 CFR Part 200), specifically §200.430(i), “charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated”. The records must also be supported by the approval of an individual with firsthand knowledge of the work performed.
Condition - During our audit, within the tested sample of seven timesheets out of a population of twenty-six, three timesheets for employees charged to the federal program did not have proper approval in the system. The lack of signed approval indicates that the timesheets were not reviewed and approved by an individual with knowledge of the work performed, as required under the Uniform Guidance. ADA has documented expenditure policies and procedures. However, the review and approval process did not operate as designed.
Cause – ADA did not adhere to its internal policies and procedures to ensure timesheets were properly reviewed and approved.
Effect or Potential Effect – Without adequate internal controls in place to ensure costs are properly verified and approved, ADA could unallowably and inaccurately charge salary and wages expenditures to the federal program.
Questioned Costs – None
Context - This is a condition based on testing of ADA’s compliance. Based on tested samples, we noted four out of seven sampled timesheets were not properly approved in the system. The samples were selected using a non-statistical method.
Repeat Finding - This finding is not a repeat finding.
Recommendation - BDO recommends that ADA adhere to its documented policies and procedures to ensure all timesheets are reviewed and approved by authorized personnel with knowledge of the work performed. ADA should also provide training to all employees involved in the timesheet preparation and approval process to ensure compliance with the Uniform Guidance requirements.
Views of Responsible Officials: The findings were primarily related to a change that ADA made to the Human Resources Information System. Going forward, ADA will adhere to our documented policies and procedures to ensure all timesheets are reviewed and approved by authorized personnel with knowledge of the work performed. Additionally, we will provide training to all employees involved in the timesheet preparation and approval process to ensure compliance with the Uniform Guidance requirements.
2023-002 - Internal Control over Compliance and Compliance with Procurement, Suspension and Debarment Procurement, Suspension and Debarment
Information on the Major Federal Program(s)
U.S. Department of Health and Human Services Center for Disease Control and Prevention
Assistance Listing Number: 93.261
Assistance Listing Name: Scaling the National Diabetes Prevention Program Preventing Type 2 Diabetes Among People at High Risk
Grant Award Number(s): 6 NU58DP006364-05-05
Award Period: September 30, 2021 to September 30, 2023
Criteria or Specific Requirement –
In accordance with 2 CFR §200.318(a), General Procurement Standards, the non-federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable federal law and the standards identified in General Procurement Standards. Additionally, §200.318(i) states that the non-federal entity must maintain records sufficient to detail the history of the procurement. These records are required to include but are not necessarily limited to the following: rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.
In accordance with §200.213 and §180.300, Suspension and Debarment, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Non-federal entities must either check for exclusions in the System for Award Management (SAM); collect a certification from the entity, or add a clause or condition to the covered transaction with the entity prior to entering into a covered transaction with a non-federal entity. In addition, in accordance with §180.415(b), non-federal entities cannot renew or extend covered transactions (other than no-cost time extension) with any excluded person, or under which an excluded person is a principal, unless the non-federal entity obtains an exception under §180.135.
Condition - During our testing of the procurement, suspension and debarment compliance requirements, we identified one procurement sample (out of a total of 1 procurement) that did not have documentation in the vendor/ procurement file to document that the debarment attestation from the vendor was provided and obtained prior to entering into contract with the vendor. The attestation statements directly from the vendor concluded that the vendor was not suspended or debarred. This is considered a finding as ADA did not follow its policy to maintain documentation in the vendor files (with a time stamp).
Cause - ADA did not adhere to its documented policies and procedures for ensuring proper suspension and debarment validations were performed before entering into a contract.
Effect or Potential Effect - Failure to timely verify that a vendor is not suspended or debarred could result in transactions involving unreasonable costs or result in unintentionally entering a contract with an entity that is barred from performing work for the Federal government.
Questioned Costs - None.
Context - This is a condition based on testing of ADA’s compliance with specified requirements. The sample was selected using a non-statistical method.
Repeat Finding - This is not a repeat finding.
Recommendation - We recommend management ensure that suspension and debarment regulations are followed. We also recommend management ensure all required procurement documentation is maintained in conjunction with its documented policy.
Views of Responsible Officials - The finding related to a vendor that was in place and performing work in advance of inclusion as a covered transaction. Going forward, ADA will ensure that suspension and debarment regulations are followed. ADA will also ensure that all required procurement documentation is maintained in conjunction with its documented policy.