Audit 310494

Finding 2023-001 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material Weakness in Internal Control Program: Health Center Cluster (ALN 93.224) Criteria: As detailed by 2 CFR 200.402, “The total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.” Condition: The CMHSP was unable to provide supporting documentation for some expenses charged to the grants. Cause/Effect: In previous years, the process to charge injectable supplies expenses to the grant was to allocate these expenses from Health Center program to the grant through a journal entry. During fiscal year 2023, the cost of injectable supplies paid through the Health Center program decreased significantly. However, when journal entries were prepared, a review of actual costs was not done to ensure that the expenses allocated through the journal entry were supported by appropriate documentation. Therefore, some costs charged to the grant for injectable supplies exceeded amounts that were supported by appropriate documentation. Approximately $241,151 of injectable supplies expenses charged to the grant were not supported by appropriate documentation (i.e.: invoices). Context: These unsupported injectable supplies expenses could have been completely replaced with allowable payroll and related fringe benefit expenses. Recommendation: We recommend that the CMHSP establish internal controls to ensure that all expenses charged to the grant are supported with appropriate documentation. Management’s Resp: We are in agreement with this finding.

Finding 2023-002 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Significant Deficiency in Internal Control / Noncompliance Program: Health Center Cluster (ALN 93.224) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “The total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.” Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Costs were charged to the grant in excess of approved budgets. Context: Amounts expended for 1 of 3 grant categories exceeded the approved budget for that category. Recommendation: We recommend that the CMHSP review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that only allowable costs are charged to the grant. Management’s Resp: We are in agreement with this finding.

Finding 2023-001 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Material Weakness in Internal Control Program: Health Center Cluster (ALN 93.224) Criteria: As detailed by 2 CFR 200.402, “The total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.” Condition: The CMHSP was unable to provide supporting documentation for some expenses charged to the grants. Cause/Effect: In previous years, the process to charge injectable supplies expenses to the grant was to allocate these expenses from Health Center program to the grant through a journal entry. During fiscal year 2023, the cost of injectable supplies paid through the Health Center program decreased significantly. However, when journal entries were prepared, a review of actual costs was not done to ensure that the expenses allocated through the journal entry were supported by appropriate documentation. Therefore, some costs charged to the grant for injectable supplies exceeded amounts that were supported by appropriate documentation. Approximately $241,151 of injectable supplies expenses charged to the grant were not supported by appropriate documentation (i.e.: invoices). Context: These unsupported injectable supplies expenses could have been completely replaced with allowable payroll and related fringe benefit expenses. Recommendation: We recommend that the CMHSP establish internal controls to ensure that all expenses charged to the grant are supported with appropriate documentation. Management’s Resp: We are in agreement with this finding.

Finding 2023-002 – ACTIVITIES ALLOWED OR UNALLOWED and ALLOWABLE COSTS/COST PRINCIPLES Type: Significant Deficiency in Internal Control / Noncompliance Program: Health Center Cluster (ALN 93.224) Condition: Expenditures charged to the grant were not authorized in the grant budget. Criteria: As detailed by 2 CFR 200.402, “The total cost of a Federal award is the sum of the allowable direct and allocable indirect costs less any applicable credits.” Cause: Management’s misunderstanding of costs allowed under this grant. Effect: Costs were charged to the grant in excess of approved budgets. Context: Amounts expended for 1 of 3 grant categories exceeded the approved budget for that category. Recommendation: We recommend that the CMHSP review all grant agreements to gain a thorough understanding of allowable costs and then establish internal controls to assure that only allowable costs are charged to the grant. Management’s Resp: We are in agreement with this finding.