Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
There was a lack of sufficient internal controls documentation evidencing management’s review and approval of the amounts submitted on the monthly financial and quarterly performance reports required by the Ohio Department of Health (ODH).
Cause:
Internal controls over the review of the reports were not documented sufficiently to evidence there were no errors in the reporting of the data.
Effect or potential effect:
Reports submitted to ODH may contain errors and not be supported by the books and records of Akron Children’s.
Questioned costs:
None
Context:
Akron Children’s submitted twelve monthly financial reports and four quarterly reports to the ODH in 2023. Management did not retain sufficient evidence supporting the review and approval of the financial reports prior to submission to ODH.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year, 2022-003.
Recommendation:
When executing the established controls over the review and approval of the reports, management should document and retain evidence of the control procedures performed for all reports submitted.
Views of responsible officials:
Akron Children’s implemented a review checklist and sign-off process to document controls for the review of the monthly financial reports submitted to the granting agency in 2023. This checklist and sign-off process will be extended to all federal grants with periodic performance reporting in 2024.
Identification of the federal program:
Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA)
Pass-Through Entities: None
Assistance Listing No: 93.493 Congressional Directives
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
There was a lack of internal controls over management’s review and approval of documents submitted to the HRSA portal prior to submission.
Cause:
Akron Children’s did not have internal controls over the review of the documents submitted to HRSA to ensure the documentation uploaded was complete and accurate.
Effect or potential effect:
Reports submitted to HRSA may contain errors and not be supported by the books and records of Akron Children’s.
Questioned costs:
None
Context:
Akron Children’s submitted five reports to HRSA in 2023. Management did not retain sufficient evidence supporting the review and approval of the reports prior to submission to HRSA.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
When executing the established controls over the review and approval of the reports, management should document and retain evidence of the control procedures performed for all reports submitted.
Views of responsible officials:
Akron Children's will implement a review and sign-off process for all documentation to be submitted for federal grant requirements.
Identification of the federal program:
Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA)
Pass-Through Entities: None
Assistance Listing No: 93.493 Congressional Directives
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
Management did not have a formal, documented internal control in place to review the allowability of the expenses to be allocated to the grant.
Cause:
Management did not have in place a formal, documented internal control to review the allowability of expenses to be charged to the grant.
Effect or potential effect:
A lack of internal controls over the review and approval of expenditures could result in unallowable expenses being charged to the federal award.
Questioned costs:
None.
Context:
We obtained email communication among Akron Children’s personnel discussing the types of costs to be submitted (construction costs) and that the general contractor expenses could be used. However, once these costs had been identified to be charged to the grant, management did not document a review of the allowability of these transactions.
Total expenditures reported on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2023 were $2,000,000.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Akron Children’s should put in place internal control procedures and retain evidence of review of expenditures charged to the grant to ensure the expenses are allowable.
Views of responsible officials:
Akron Children's will implement a more detailed review and documentation process for allowable expenses prior to determining expenses that are eligible for federal grant reimbursement.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Section 200.318(i) of the Uniform Guidance states the following regarding general procurement standards: “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will 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.”
Section 200.320(a)(1)(iii) of the Uniform Guidance states the following regarding formal procurement methods to be followed: “The non-Federal entity is responsible for determining and documenting an appropriate micro-purchase threshold based on internal controls, an evaluation of risk, and its documented procurement procedures.”
Section 200.320(a)(2)(i) refers to small purchases as: “The acquisition of property or services, the aggregate dollar amount of which is higher than the micro-purchase threshold but does not exceed the simplified acquisition threshold. If small purchase procedures are used, price or rate quotations must be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity.”
Condition:
For most of 2023, Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the Uniform Guidance requirements within Section 200.320 in that the requirements for price or rate quotations from an adequate number of sources for small purchases between the micro purchase and simplified acquisition thresholds are not defined. Akron Children’s updated the procurement policy to align with the Uniform Guidance requirements in November 2023.
Cause:
The small purchase procurement threshold within Akron Children’s Procurement Policy for Federal Grant Agreements and Contracts did not align with the procurement thresholds established under Uniform Guidance Section 200.320, until the policy was updated in November 2023.
Effect or potential effect:
Akron Children’s procurement policies were not designed in accordance with Section 2.00.320(a). As such, Akron Children’s purchases may not have been in accordance with the Uniform Guidance procurement standards.
Questioned costs:
None
Context:
Akron Children’s updated its procurement policy in November 2023. Procurements prior to this date may not have followed the required Uniform Guidance.
Total Federal expenditures for the programs were $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-001, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Akron Children’s should review and update its federal procurement policies to align with the procurement standards.
Views of responsible officials:
Akron Children's remediated this finding in November 2023 with the update and issuance of a modified Procurement Policy for Federal Grant Agreements and Contracts that aligns with the standards of Uniform Guidance.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response, 93.493 Congressional Directives, and 21.027 COVID-19 Coronavirus State and Local Recovery Funds
Award Period: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
The Uniform Guidance 2 CFR Section 200.213 states, “Non-federal entities are subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR Part 180. These regulations restrict awards, subawards, and contracts with certain parties that are debarred, suspended or otherwise excluded from or ineligible for participation in Federal assistance programs or activities”.
Condition:
We identified the following matters during our testing of suspension and debarment control processes:
a) A third-party vendor performed the suspension and debarment validation process for Akron Children’s. The third-party vendor does not have a SOC 1 (System and Organization Controls) Report. For most of 2023, Akron Children’s relied on the suspension and debarment checks performed by the third-party vendor for results concluding no match without completing a validation control to ensure the results provided by the third party were accurate.
b) Akron Children’s did not retain the supporting documentation of the reconciliation of the vendor list that is received from the third-party vendor that is used to perform the suspension and debarment checks after the suspension and debarment checks are performed to ensure the listing is complete and agrees to the vendor list provided by Akron Children’s to the third-party vendor.
Cause:
Akron Children’s did not have policies and procedures that require a validation of the third-party’s controls be performed to ensure that the suspension and debarment checks performed by the third-party vendor aligned with the governmental suspension and debarment database when the search resulted in no match.
In addition, Akron Children’s did not have policies and procedures in place to require that documentation is retained to support the reconciliations performed between the vendor list sent to the third-party vendor and the results provided by the third-party vendor.
Effect or potential effect:
Akron Children’s screening for suspension and debarment through the third-party vendor results may not be accurate.
By failing to retain the documentation of the reconciliation of vendor files to the third-party vendor search results, sufficient evidence was not retained to prove that the reconciliation took place.
As a result, there was not sufficient evidence to validate the appropriate internal controls took place to prevent Akron Children’s from transacting with a vendor that was suspended or debarred, which was ultimately charged to a federal program.
Questioned costs:
None.
Context:
The federal portion of expenditures subject to suspension and debarment represents approximately 84% of total federal expenditures for the programs of $10,888,195 for the year ended December 31, 2023.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year – 2022-002, as it relates to 93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response.
Recommendation:
Management should add controls to validate the accuracy of the suspension and debarment search results performed by the third-party vendor when the search results in no match.
Views of responsible officials:
Akron Children's remediated these findings in the fourth quarter of 2023 by:
1) Implementing a periodic independent review of a sample of vendors sent to the third-party vendor to ensure that the processes employed by third-party vendor are accurate.
2) Developing a retention process for all vendor searches and file submissions to evidence compliance with the Federal regulations, including an independent review of the accuracy of file submissions. Further, a contract management system was installed in 2023 that holds the validation of new vendors as acceptable for federal procurements.
Identification of the federal program:
Federal Agencies: U.S. Department of Health and Human Services
Pass-Through Entities: Ohio Department of Health
Assistance Listing No: 93.354, Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
There was a lack of sufficient internal controls documentation evidencing management’s review and approval of the amounts submitted on the monthly financial and quarterly performance reports required by the Ohio Department of Health (ODH).
Cause:
Internal controls over the review of the reports were not documented sufficiently to evidence there were no errors in the reporting of the data.
Effect or potential effect:
Reports submitted to ODH may contain errors and not be supported by the books and records of Akron Children’s.
Questioned costs:
None
Context:
Akron Children’s submitted twelve monthly financial reports and four quarterly reports to the ODH in 2023. Management did not retain sufficient evidence supporting the review and approval of the financial reports prior to submission to ODH.
Identification as a repeat finding, if applicable:
The finding is a repeat finding from the prior year, 2022-003.
Recommendation:
When executing the established controls over the review and approval of the reports, management should document and retain evidence of the control procedures performed for all reports submitted.
Views of responsible officials:
Akron Children’s implemented a review checklist and sign-off process to document controls for the review of the monthly financial reports submitted to the granting agency in 2023. This checklist and sign-off process will be extended to all federal grants with periodic performance reporting in 2024.
Identification of the federal program:
Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA)
Pass-Through Entities: None
Assistance Listing No: 93.493 Congressional Directives
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
There was a lack of internal controls over management’s review and approval of documents submitted to the HRSA portal prior to submission.
Cause:
Akron Children’s did not have internal controls over the review of the documents submitted to HRSA to ensure the documentation uploaded was complete and accurate.
Effect or potential effect:
Reports submitted to HRSA may contain errors and not be supported by the books and records of Akron Children’s.
Questioned costs:
None
Context:
Akron Children’s submitted five reports to HRSA in 2023. Management did not retain sufficient evidence supporting the review and approval of the reports prior to submission to HRSA.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
When executing the established controls over the review and approval of the reports, management should document and retain evidence of the control procedures performed for all reports submitted.
Views of responsible officials:
Akron Children's will implement a review and sign-off process for all documentation to be submitted for federal grant requirements.
Identification of the federal program:
Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA)
Pass-Through Entities: None
Assistance Listing No: 93.493 Congressional Directives
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
Management did not have a formal, documented internal control in place to review the allowability of the expenses to be allocated to the grant.
Cause:
Management did not have in place a formal, documented internal control to review the allowability of expenses to be charged to the grant.
Effect or potential effect:
A lack of internal controls over the review and approval of expenditures could result in unallowable expenses being charged to the federal award.
Questioned costs:
None.
Context:
We obtained email communication among Akron Children’s personnel discussing the types of costs to be submitted (construction costs) and that the general contractor expenses could be used. However, once these costs had been identified to be charged to the grant, management did not document a review of the allowability of these transactions.
Total expenditures reported on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2023 were $2,000,000.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Akron Children’s should put in place internal control procedures and retain evidence of review of expenditures charged to the grant to ensure the expenses are allowable.
Views of responsible officials:
Akron Children's will implement a more detailed review and documentation process for allowable expenses prior to determining expenses that are eligible for federal grant reimbursement.