Audit 321664

2023-001 OVERPAYMENTS TO SUBRECIPIENT Federal agency: U.S. Department of Department of Health and Human Services Federal Program Title & Assistance Listing Number: Substance Abuse and Mental Health Services Projects of Regional and National Significance -93.243 Award Period: 12/31/2022 - 12/30/2024 Type of Finding: Significant Deficiency Compliance Areas: Allowable Costs, Cash Management Questioned Costs: None Condition During our testing of subrecipient disbursements, we found that management does not require invoices from subrecipients before making disbursements. Instead, they allocate a predetermined monthly amount based on prorated subaward totals, making adjustments upon receipt of invoices and again at year-end. An error in a subrecipient's invoice led to an overpayment of $27,525 and remained uncorrected during the year. As a result, UVNR over recognized federal revenue by the same amount. An audit adjustment was made to correct both federal expenditures and revenues in 2023. Criteria An improper payment, as defined in 2 CFR §200.1, is any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Organization, federal reimbursement requests are completed monthly. Effect Overstatement of federal revenues and expenditures, respectively. The overpayment would also necessitate certain adjustments to the award amounts given to the subrecipient in the following year. Cause Management admittedly overlooked the error in the subrecipient’s submitted invoice during review.

2023-001 OVERPAYMENTS TO SUBRECIPIENT Federal agency: U.S. Department of Department of Health and Human Services Federal Program Title & Assistance Listing Number: Substance Abuse and Mental Health Services Projects of Regional and National Significance -93.243 Award Period: 12/31/2022 - 12/30/2024 Type of Finding: Significant Deficiency Compliance Areas: Allowable Costs, Cash Management Questioned Costs: None Condition During our testing of subrecipient disbursements, we found that management does not require invoices from subrecipients before making disbursements. Instead, they allocate a predetermined monthly amount based on prorated subaward totals, making adjustments upon receipt of invoices and again at year-end. An error in a subrecipient's invoice led to an overpayment of $27,525 and remained uncorrected during the year. As a result, UVNR over recognized federal revenue by the same amount. An audit adjustment was made to correct both federal expenditures and revenues in 2023. Criteria An improper payment, as defined in 2 CFR §200.1, is any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or other legally applicable requirements. According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Specific to the Organization, federal reimbursement requests are completed monthly. Effect Overstatement of federal revenues and expenditures, respectively. The overpayment would also necessitate certain adjustments to the award amounts given to the subrecipient in the following year. Cause Management admittedly overlooked the error in the subrecipient’s submitted invoice during review.