Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Period of Performance; Other Matters
Criteria or specific requirement: Under §200.309, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance applicable to the grant.
Condition: During audit procedures performed, we noted two payroll transactions tested included a pay date prior to the beginning period of performance, and the payroll costs were charged to the grant.
Questioned costs: None.
Context: During audit procedures performed, we tested five payroll transactions for beginning period of performance testing related to ALN 93.959 and noted one of the transactions had a pay period that began prior to the period of performance beginning date for the grant, and the payroll costs incurred prior to the beginning period of performance date were charged to the grant.
During payroll testing performed related to allowable costs and activities, of the 10 payroll transactions selected for testing, one was noted in which the pay period was prior to the period of performance beginning date for the grant, and the payroll costs incurred prior to the beginning period of performance date were charged to the grant.
Cause: OBHC’s internal controls lacked proper procedures to ensure expenditures were not being charged to the grant if it was not incurred within the period of performance.
Effect: OBHC charged expenditures to the grants and was reimbursed for these costs that included payroll costs incurred outside of the contract period of performance.
Repeat finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2022-002.
Recommendation: We recommend that OBHC develop a procedure to ensure that payroll transactions are properly allocated to grants and charged to grant awards based on the dates incurred to ensure the costs are within the period of performance.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Under §200.403, costs must meet specific criteria to be allowable under Federal awards and be adequately documented.
Condition: For one transaction selected for testing, support for the disbursement included a vendor invoice for $252.25, however, the amount paid to the vendor on behalf of the client was $302.25 and there was no support for the $50 additional. The grant is a reimbursement-based grant. As such, there was insufficient support for $50 of federal expenditures.
Questioned costs: None.
Context: Of the nine general disbursements tested for period of performance, one was noted in which the total amount expended was $302.25, however, the supporting invoice was for $252.25, resulting in $50 that was unsupported.
Cause: After paying the supported invoice, the client would have had $50 left of eligible grant funds after the bill payment. Program management added the remaining $50 to the expenditure amount to be put towards the client's future power bill.
Effect: Support was not available for $50 of program expenditures charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all expenditures charged to the grant have been incurred and are supported by invoice or other documentation and retained by OBHC.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over general disbursements include the review and approval of expenditures by a supervisor prior to payment.
Condition: There were two general disbursements identified during allowable costs and activities testing that did not have documentation of proper expense approval by the program supervisor.
Questioned costs: None.
Context: Internal Controls tested during allowable costs and activities testing included the proper documentation of supervisor approval for expenses. Of the 30 general disbursements tested for allowable costs and activities, two did not have support for supervisory approval.
Cause: Lack of review and approval of specific expenditures appears to be an internal control oversight.
Effect: Lack of supervisory approval of expenditures could result in costs allocated to the grant that are not allowable.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all invoices are approved by a supervisor knowledgeable of the grant requirements prior to payment by the accounting department, and that documentation of this review is retained.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01, K6479
Award Period: July 1, 2022 – June 30, 2023; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities,Cash Management, and Period of Performance; Other Matters
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: The payroll expenditures included on the February 2023 reimbursement request were determined based on February 2022 payroll activity, rather than the February 2023 payroll activity.
Questioned costs: None.
Context: Of the six reimbursement requests tested for SABG and five for SOR, noted one for each grant (same time period) in which incorrect pay periods were used to determine the amount of reimbursement to claim.
For the payroll transactions selected for testing, two out of 10 for SABG and two out of eight for SOR were for payroll costs incurred in February 2022 and were not within the grant period.
Cause: Payroll activity for the wrong year was used to determine the amount to claim for expense reimbursement.
Effect: Payroll expenditures were overcharged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend all grant billings are reviewed and approved by an individual independent of the preparation process and that this review includes reviewing supporting documentation for the expenditures being claimed to ensure the amount charged to the grant is accurate.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01 and 1009592.16
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to enusre payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: None.
Context: For the payroll transactions selected for testing, all eight of the SABG payroll transactions were not supported by time and effort records.
Time and effort was not properly tracked during the audit period between the SABG and SOR program, however, based on the effort expended providing services to program participants, costs meet the allowable costs and activities requirements.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SABG program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: SOR Recovery Support Services
Assistance Listing Number: 93.788
Federal Award Identification Number and Year: K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K4849-02, K6479
Award Period: September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: - Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to ensure payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: Unknown due to inadequate tracking of time.
Context: Of the 10 payroll transactions tested for the SOR program, one was properly charged to the grant and supported by time and effort documentation.
Time and effort was not properly tracked during the audit period between the SOR and SABG program. Eligibility requirements for the SOR program are more restrictive, thus not all time spent providing services to SABG and SOR participants would meet the allowable costs and activities requirements of the program.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SOR program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01, K6479
Award Period: July 1, 2022 – June 30, 2023; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities,Cash Management, and Period of Performance; Other Matters
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: The payroll expenditures included on the February 2023 reimbursement request were determined based on February 2022 payroll activity, rather than the February 2023 payroll activity.
Questioned costs: None.
Context: Of the six reimbursement requests tested for SABG and five for SOR, noted one for each grant (same time period) in which incorrect pay periods were used to determine the amount of reimbursement to claim.
For the payroll transactions selected for testing, two out of 10 for SABG and two out of eight for SOR were for payroll costs incurred in February 2022 and were not within the grant period.
Cause: Payroll activity for the wrong year was used to determine the amount to claim for expense reimbursement.
Effect: Payroll expenditures were overcharged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend all grant billings are reviewed and approved by an individual independent of the preparation process and that this review includes reviewing supporting documentation for the expenditures being claimed to ensure the amount charged to the grant is accurate.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01 and 1009592.16
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to enusre payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: None.
Context: For the payroll transactions selected for testing, all eight of the SABG payroll transactions were not supported by time and effort records.
Time and effort was not properly tracked during the audit period between the SABG and SOR program, however, based on the effort expended providing services to program participants, costs meet the allowable costs and activities requirements.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SABG program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: SOR Recovery Support Services
Assistance Listing Number: 93.788
Federal Award Identification Number and Year: K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K4849-02, K6479
Award Period: September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: - Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to ensure payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: Unknown due to inadequate tracking of time.
Context: Of the 10 payroll transactions tested for the SOR program, one was properly charged to the grant and supported by time and effort documentation.
Time and effort was not properly tracked during the audit period between the SOR and SABG program. Eligibility requirements for the SOR program are more restrictive, thus not all time spent providing services to SABG and SOR participants would meet the allowable costs and activities requirements of the program.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SOR program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Period of Performance; Other Matters
Criteria or specific requirement: Under §200.309, a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance applicable to the grant.
Condition: During audit procedures performed, we noted two payroll transactions tested included a pay date prior to the beginning period of performance, and the payroll costs were charged to the grant.
Questioned costs: None.
Context: During audit procedures performed, we tested five payroll transactions for beginning period of performance testing related to ALN 93.959 and noted one of the transactions had a pay period that began prior to the period of performance beginning date for the grant, and the payroll costs incurred prior to the beginning period of performance date were charged to the grant.
During payroll testing performed related to allowable costs and activities, of the 10 payroll transactions selected for testing, one was noted in which the pay period was prior to the period of performance beginning date for the grant, and the payroll costs incurred prior to the beginning period of performance date were charged to the grant.
Cause: OBHC’s internal controls lacked proper procedures to ensure expenditures were not being charged to the grant if it was not incurred within the period of performance.
Effect: OBHC charged expenditures to the grants and was reimbursed for these costs that included payroll costs incurred outside of the contract period of performance.
Repeat finding: The finding is a repeat of a finding in the immediate prior year. Prior year finding number was 2022-002.
Recommendation: We recommend that OBHC develop a procedure to ensure that payroll transactions are properly allocated to grants and charged to grant awards based on the dates incurred to ensure the costs are within the period of performance.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Under §200.403, costs must meet specific criteria to be allowable under Federal awards and be adequately documented.
Condition: For one transaction selected for testing, support for the disbursement included a vendor invoice for $252.25, however, the amount paid to the vendor on behalf of the client was $302.25 and there was no support for the $50 additional. The grant is a reimbursement-based grant. As such, there was insufficient support for $50 of federal expenditures.
Questioned costs: None.
Context: Of the nine general disbursements tested for period of performance, one was noted in which the total amount expended was $302.25, however, the supporting invoice was for $252.25, resulting in $50 that was unsupported.
Cause: After paying the supported invoice, the client would have had $50 left of eligible grant funds after the bill payment. Program management added the remaining $50 to the expenditure amount to be put towards the client's future power bill.
Effect: Support was not available for $50 of program expenditures charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all expenditures charged to the grant have been incurred and are supported by invoice or other documentation and retained by OBHC.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over general disbursements include the review and approval of expenditures by a supervisor prior to payment.
Condition: There were two general disbursements identified during allowable costs and activities testing that did not have documentation of proper expense approval by the program supervisor.
Questioned costs: None.
Context: Internal Controls tested during allowable costs and activities testing included the proper documentation of supervisor approval for expenses. Of the 30 general disbursements tested for allowable costs and activities, two did not have support for supervisory approval.
Cause: Lack of review and approval of specific expenditures appears to be an internal control oversight.
Effect: Lack of supervisory approval of expenditures could result in costs allocated to the grant that are not allowable.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all invoices are approved by a supervisor knowledgeable of the grant requirements prior to payment by the accounting department, and that documentation of this review is retained.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01, K6479
Award Period: July 1, 2022 – June 30, 2023; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities,Cash Management, and Period of Performance; Other Matters
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: The payroll expenditures included on the February 2023 reimbursement request were determined based on February 2022 payroll activity, rather than the February 2023 payroll activity.
Questioned costs: None.
Context: Of the six reimbursement requests tested for SABG and five for SOR, noted one for each grant (same time period) in which incorrect pay periods were used to determine the amount of reimbursement to claim.
For the payroll transactions selected for testing, two out of 10 for SABG and two out of eight for SOR were for payroll costs incurred in February 2022 and were not within the grant period.
Cause: Payroll activity for the wrong year was used to determine the amount to claim for expense reimbursement.
Effect: Payroll expenditures were overcharged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend all grant billings are reviewed and approved by an individual independent of the preparation process and that this review includes reviewing supporting documentation for the expenditures being claimed to ensure the amount charged to the grant is accurate.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01 and 1009592.16
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to enusre payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: None.
Context: For the payroll transactions selected for testing, all eight of the SABG payroll transactions were not supported by time and effort records.
Time and effort was not properly tracked during the audit period between the SABG and SOR program, however, based on the effort expended providing services to program participants, costs meet the allowable costs and activities requirements.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SABG program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: SOR Recovery Support Services
Assistance Listing Number: 93.788
Federal Award Identification Number and Year: K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K4849-02, K6479
Award Period: September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: - Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to ensure payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: Unknown due to inadequate tracking of time.
Context: Of the 10 payroll transactions tested for the SOR program, one was properly charged to the grant and supported by time and effort documentation.
Time and effort was not properly tracked during the audit period between the SOR and SABG program. Eligibility requirements for the SOR program are more restrictive, thus not all time spent providing services to SABG and SOR participants would meet the allowable costs and activities requirements of the program.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SOR program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01, K6479
Award Period: July 1, 2022 – June 30, 2023; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities,Cash Management, and Period of Performance; Other Matters
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: The payroll expenditures included on the February 2023 reimbursement request were determined based on February 2022 payroll activity, rather than the February 2023 payroll activity.
Questioned costs: None.
Context: Of the six reimbursement requests tested for SABG and five for SOR, noted one for each grant (same time period) in which incorrect pay periods were used to determine the amount of reimbursement to claim.
For the payroll transactions selected for testing, two out of 10 for SABG and two out of eight for SOR were for payroll costs incurred in February 2022 and were not within the grant period.
Cause: Payroll activity for the wrong year was used to determine the amount to claim for expense reimbursement.
Effect: Payroll expenditures were overcharged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend all grant billings are reviewed and approved by an individual independent of the preparation process and that this review includes reviewing supporting documentation for the expenditures being claimed to ensure the amount charged to the grant is accurate.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG)
Assistance Listing Number: 93.959
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01 and 1009592.16
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to enusre payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: None.
Context: For the payroll transactions selected for testing, all eight of the SABG payroll transactions were not supported by time and effort records.
Time and effort was not properly tracked during the audit period between the SABG and SOR program, however, based on the effort expended providing services to program participants, costs meet the allowable costs and activities requirements.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SABG program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, 1009592.16 – 2023, K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority; Beacon Health Options, Inc.
Pass-Through Number(s): K6103.01, 1009592.16, K4849-02, K6479
Award Period: July 1, 2022 – June 30, 2023; September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Proper internal controls over cash management and indirect costs include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures.
Condition: Grant billings are to be reviewed and approved by the CFO or CEO prior to submitting to the granting agency. There was no documentation of review and approval by the CFO or CEO.
Questioned costs: None.
Context: There was no prior review and approval indicated on any of the cash management drawdowns reviewed as part of audit testing.
Cause: Inadequate implementation of internal controls over compliance related to cash management and indirect costs. There was also turnover in the CFO position during the fiscal year.
Effect: Lack of an independent review and approval of grant billings resulted in incorrect items being included on the billings and errors going undetected.
Repeat finding: Not a repeat finding.
Recommendation: CLA recommends that all grant draw requests are reviewed in detail with support for the expenditures and approved by an individual separate from the one preparing the draw request prior to submission to the granting agency.
Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: Substance Abuse Prevention and Treatment Block Grant (SABG); SOR Recovery Support Services
Assistance Listing Number: 93.959 and 93.788
Federal Award Identification Number and Year: K6103.01 – 2023, K4849-02 – 2022; K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K6103.01
Award Period: July 1, 2022 – June 30, 2023
Type of Finding: Significant Deficiency in Internal Control over Compliance – Allowable Costs and Activities; Other Matters
Criteria or specific requirement: Proper internal controls over cash management include the review and approval of grant draws prior to submission to the granting agency, to ensure accuracy of expenditures and client services claimed on the invoices.
Condition: Of the six client service reimbursements tested for SABG, three were incorrectly charged to the grant. Of these three, two of the errors were identified by the client in during February 2024 and steps taken with the granting agency to correct these.
Of the five client service reimbursements tested for SOR, five were incorrectly charged to the grant. Of these five, three of the errors were identified by the client in September 2023 and steps taken with the granting agency to correct these.
Client service reimbursements were calculated using incorrect program service information (i.e., SABG client services were used to determine SOR client service reimbursement amounts),and hours were not supported by the client service data.
Questioned costs: None.
Context: Three of the six monthly billings for the SABG program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Five of the five monthly billings for the SOR program had incorrectly calculated client service reimbursement amounts for the Client Service reimbursement, which resulted in an incorrect amount being charged to the grant.
Cause: The service hour support calculations were incorrectly determined, and these incorrect calculations were used to complete the monthly grant billing.
Effect: Client service hours were incorrectly charged to the grant.
Repeat finding: Not a repeat finding.
Recommendation: We recommend grant billers ensure service reports for the proper program and time period are used to calculate the client service billing amount. We also recommend the data used to determine this amount be reviewed and approved during the grant billing review process
Views of responsible officials: There is no disagreement with the audit finding
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: SOR Recovery Support Services
Assistance Listing Number: 93.788
Federal Award Identification Number and Year: K4849-02 – 2022, K6479 - 2023
Pass-Through Agency: Washington State Health Care Authority
Pass-Through Number(s): K4849-02, K6479
Award Period: September 30, 2020 – September 29, 2022; September 29, 2022 – September 28, 2023
Type of Finding: - Material Weakness in Internal Control over Compliance – Allowable Costs and Activities; Material Noncompliance (Modified Opinion)
Criteria or specific requirement: Proper internal controls over time and effort are to be in place in order to ensure payroll costs are properly charged to grants.
Condition: Time sheets did not indicate the project/grant the employee worked on for the pay period to support allocation to the grant. For July 2022 through January 2023 payroll costs were charged 100% to either ALN 93.959 or ALN 93.788 and were not allocated based on the employee's time spent working in the programs. For February 2023 through June 2023 payroll costs were allocated to the grants based on the amount of expenses paid on behalf of program participants during the month for items such as rent, groceries, utilities, etc.
Questioned costs: Unknown due to inadequate tracking of time.
Context: Of the 10 payroll transactions tested for the SOR program, one was properly charged to the grant and supported by time and effort documentation.
Time and effort was not properly tracked during the audit period between the SOR and SABG program. Eligibility requirements for the SOR program are more restrictive, thus not all time spent providing services to SABG and SOR participants would meet the allowable costs and activities requirements of the program.
Cause: Time and effort between the SOR and SABG programs was not tracked during the audit period to accurately allocate time between the programs.
Effect: Payroll costs were not charged to the program based on time and effort.
Repeat finding: Not a repeat finding.
Recommendation: We recommend time spent on the SOR program be coded to a unique project code in order to ensure time and effort is properly identified and tracked for the program.
Views of responsible officials: There is no disagreement with the audit finding.