Audit 325057

2023-004 Sufficiency of Documentation to Support Compliance to Allowable Cost Requirements (Repeat Finding 2022-003) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must establish effective internal controls to ensure compliance with Federal statutes, regulations, and award terms. Point of Freedom, receiving Federal Awards, must adhere to 2 CFR Part 200 Subpart E, which outlines cost principles. Adequate documentation is essential to ensure that costs are allowable, ensuring compliance, transparency, and accountability in fund utilization. Condition: We identified five (5) disbursements that lacked supporting documentation to verify the accuracy and allowability of the costs incurred. Additionally, three (3) of these transactions involved contractors for whom no partnership agreements were in place. Cause of Condition: The absence of formal monitoring for contractor charges and established documentation policies (i.e contractor invoices) indicates a control deficiency in compliance. Effect: Incomplete documentation hinders timely verification of accuracy, increasing the risk of improper disbursement of federal funds. Questioned Cost: $19,179 Context: Of the 714 disbursements, we examined 91 of which five (5) were identified with incomplete documentation and three (3) of these transactions involved contractors for whom no partnership agreements. In accordance with 2 CFR 200.516(a)(3), auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Although the sample uncovered five (5) transactions with incomplete documentation, resulting in $19,179 in questioned costs, extending the tests to the entire population projects questioned costs approximately $24,736 which is close to $25,000. Recommendation: We recommend that management should establish a document retention policy. This policy should define clear procedures for maintaining and organizing transaction documentation, which will support accurate verification and enhance overall internal controls. Views of Responsible Officials: As indicated in the 2022 POFCAP response to Finding 2022-003, and as reiterated herein, POF began to implement additional internal control procedures and practices effective July 1, 2024, to ensure that underlying cost documentation is adequate, reasonable, and complete in accordance with 2 CFR Part 200 Subpart E and other regulatory requirements. More specifically, vendor invoices as of that date and related supporting documents such as weekly meeting reports and sign-in sheets are being scanned and retained electronically. As in 2022, the contact information from the 2023 weekly reports was transmitted to either Wright State University or The Ohio State University for data mining purposes. On July 22, 20224, the POF Board of Directors unanimously adopted the POF Record Retention Policy, as recommended by the auditors. The Board also unanimously adopted a Code of Conduct along with Conflict of Interest, and Whistleblower policies as further evidence of their commitment to instituting policies and procedures designed to strengthen internal controls and comply with federal regulations. Questioned Cost Totaling $19,179 Effective July l, 2024, POF's new internal control policies, and procedures will eliminate or drastically reduce future discrepancies of this nature.

2023-005 2023-005 Accuracy over Federal Reporting Requirements (Repeat Finding 2022-004) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must maintain effective internal controls to ensure compliance with federal statutes, regulations, and award terms. Point of Freedom needs to establish and document policies and procedures to meet control objectives outlined in 2 CFR Section 200.1, particularly ensuring accurate recording and accounting of transactions for reliable financial statements and federal reports. Condition: Our federal reports testing revealed inaccuracies in the reports, with supporting documentation failing to corroborate the submitted information. Additionally, management has not provided adequate support to verify the accuracy of these reports. Cause of Condition: The Organization's lack of developed policies and procedures for compliance has led to the identified deficiencies in federal reports. Effect: Inadequate controls in this compliance area pose a significant risk that the Organization may fail to meet federal award reporting requirements. Questioned Cost: Not Quantifiable Context: We selected three months' worth of monthly reports for ADAMHS and one closeout report for OHMAS. Recommendation: We recommend that management develop and implement policies and procedures that address compliance requirements. Additionally, provide comprehensive training to employees on these policies and ensure consistent monitoring to maintain accuracy and timeliness in federal reporting. We also suggest a review process. Views of Responsible Officials: POF's initial and current exposure a few months later to Single Audit compliance requirements have sharpened its focus on the need to purposefully identify and maintain corroborating evidence regarding its timely submission and acceptance by each of the respective funding sources. While POF believes that all these reporting requirements were timely met and accepted by all funding sources, it did not consistently maintain either the report itself, or the related documentation such as copies of the emails sent or the associated read-receipts as evidence of these reports. Effective July 1, POF routinely and consistently accumulated and organized these documents as well as ancillary evidence of their transmission to, receipt by, and acknowledgement of acceptance by the federal agency. POF will be more diligent in its transmissions to funders. POF noted that the 2022 Closeout Report was inexplicably re-submitted instead of the correct 2023 Closeout Report. This is unacceptable, and POF will add a second set of reviews by a second person to improve quality control in this area. As necessary, POF will seek professional education and advice in implementing policies, practices, and procedures in addition to those already described herein.

2023-006 Supporting Documents for Eligibility Requirements Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Significant Deficiency Compliance Requirement: Eligibility Criteria: According to Section 200.303 of the Uniform Guidance, a nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Point of Freedom must document their policies and procedures in determining eligibility and must have controls in place to ensure compliance with their policies and procedures and prevent fraud. Condition: The organization currently lacks valid identification documents for some residents, many of whom are homeless. Cause of Condition: The absence of proper identification documentation is primarily due to the residents' homeless status, which complicates the collection and maintenance of such documents. Effect: Without valid identification documents, the organization may face challenges in meeting eligibility requirements and ensuring compliance with documentation standards. This could potentially affect the program's effectiveness and the residents' access to necessary services. Questioned Cost: Not Quantifiable Context: We reviewed documentation for 5 participants and found that 2 of them do not have valid identification documents. This issue is particularly prevalent among homeless residents. Recommendation: We recommend that the organization implements a systematic approach to documenting residents' identification, including those who are homeless. Additionally, the organization should consult with the program manager to establish guidelines and procedures for effectively documenting identification in cases where traditional documentation is challenging to obtain. Views of Responsible Officials: During September 2024, POF updated its Housing Procedures Manual in compliance with Section 200.303 of Uniform Guidance and Ohio Recovery House Regulations. This document now more fully addresses, among other things, eligibility and required minimum documentation standards. POF has already begun to build individual client files to retain and periodically update these required supporting documents for all Its affected residential clients.

2023-007 Timely Submission of Single Audit Report Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Significant Deficiency Compliance Requirement: Reporting Criteria: According to the OMB Compliance Supplement, Part 6 and 2 CFR 200.512 (a)(1), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit a complete and accurate Data Collection Form (DCF) and a Single Audit report package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. The DCF is a critical element in ensuring transparency and accountability for the use of federal funds. Condition: The Organization did not submit the required DCF for the period September 30, 2023, by the required deadline. Cause of Condition: The delay in submission was attributed to a change in the fiscal year and a postponement of the 2022 audit. Effect: Failure to submit the DCF on time resulted in noncompliance with federal regulations, which could lead to the potential withholding of future federal funding or other sanctions. It also undermines the Organization's compliance status and may affect the entity's standing with grantor agencies and other stakeholders. Questioned Cost: Not Quantifiable Context: Last year was the initial audit, leading to subsequent delays that impacted the 2023 audit timeline. Additionally, the change in the fiscal year, where the expected fiscal year-end was initially December but was shifted to September 30, resulted in an earlier deadline for the current year, moving it to June. Recommendation: We recommend that the Organization enhance audit planning and scheduling to account for changes in the fiscal year and prior delays, ensuring timely submission of the DCF. Strengthening internal controls, including assigning responsibility for monitoring deadlines, can help avoid future noncompliance. Additionally, improved coordination with external auditors and contingency planning for unforeseen delays will further support timely submissions and maintain the Organization’s compliance with federal regulations. Views of Responsible Officials: To eliminate this finding from recurring in future periods, POF will create an internal Annual Audit Plan (AAP), identifying required tasks, deliverables, due dates, and responsible internal and external personnel for each task. POF's AAP will include five-six (5-6) months' lead time prior to future mandatory submission dates. Simultaneously, POF will communicate the AAP timelines with the Audit Engagement Partner to ensure audit staffing continuity and availability. POF will achieve accurate, complete, and timely future SAR and DCF submissions through incorporating these process improvements along with strengthening its Internal controls, gaining experience in its first two Single Audits, and in acquiring an understanding of the Auditor's role in verifying compliance and the adequacy of related supporting documentation.

2023-004 Sufficiency of Documentation to Support Compliance to Allowable Cost Requirements (Repeat Finding 2022-003) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Allowable Costs/Cost Principles Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must establish effective internal controls to ensure compliance with Federal statutes, regulations, and award terms. Point of Freedom, receiving Federal Awards, must adhere to 2 CFR Part 200 Subpart E, which outlines cost principles. Adequate documentation is essential to ensure that costs are allowable, ensuring compliance, transparency, and accountability in fund utilization. Condition: We identified five (5) disbursements that lacked supporting documentation to verify the accuracy and allowability of the costs incurred. Additionally, three (3) of these transactions involved contractors for whom no partnership agreements were in place. Cause of Condition: The absence of formal monitoring for contractor charges and established documentation policies (i.e contractor invoices) indicates a control deficiency in compliance. Effect: Incomplete documentation hinders timely verification of accuracy, increasing the risk of improper disbursement of federal funds. Questioned Cost: $19,179 Context: Of the 714 disbursements, we examined 91 of which five (5) were identified with incomplete documentation and three (3) of these transactions involved contractors for whom no partnership agreements. In accordance with 2 CFR 200.516(a)(3), auditors are required to report known questioned costs when likely questioned costs are greater than $25,000. Although the sample uncovered five (5) transactions with incomplete documentation, resulting in $19,179 in questioned costs, extending the tests to the entire population projects questioned costs approximately $24,736 which is close to $25,000. Recommendation: We recommend that management should establish a document retention policy. This policy should define clear procedures for maintaining and organizing transaction documentation, which will support accurate verification and enhance overall internal controls. Views of Responsible Officials: As indicated in the 2022 POFCAP response to Finding 2022-003, and as reiterated herein, POF began to implement additional internal control procedures and practices effective July 1, 2024, to ensure that underlying cost documentation is adequate, reasonable, and complete in accordance with 2 CFR Part 200 Subpart E and other regulatory requirements. More specifically, vendor invoices as of that date and related supporting documents such as weekly meeting reports and sign-in sheets are being scanned and retained electronically. As in 2022, the contact information from the 2023 weekly reports was transmitted to either Wright State University or The Ohio State University for data mining purposes. On July 22, 20224, the POF Board of Directors unanimously adopted the POF Record Retention Policy, as recommended by the auditors. The Board also unanimously adopted a Code of Conduct along with Conflict of Interest, and Whistleblower policies as further evidence of their commitment to instituting policies and procedures designed to strengthen internal controls and comply with federal regulations. Questioned Cost Totaling $19,179 Effective July l, 2024, POF's new internal control policies, and procedures will eliminate or drastically reduce future discrepancies of this nature.

2023-005 2023-005 Accuracy over Federal Reporting Requirements (Repeat Finding 2022-004) Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Material Weakness Compliance Requirement: Reporting Criteria: Under Section 200.303 of the Uniform Guidance, a non-federal entity must maintain effective internal controls to ensure compliance with federal statutes, regulations, and award terms. Point of Freedom needs to establish and document policies and procedures to meet control objectives outlined in 2 CFR Section 200.1, particularly ensuring accurate recording and accounting of transactions for reliable financial statements and federal reports. Condition: Our federal reports testing revealed inaccuracies in the reports, with supporting documentation failing to corroborate the submitted information. Additionally, management has not provided adequate support to verify the accuracy of these reports. Cause of Condition: The Organization's lack of developed policies and procedures for compliance has led to the identified deficiencies in federal reports. Effect: Inadequate controls in this compliance area pose a significant risk that the Organization may fail to meet federal award reporting requirements. Questioned Cost: Not Quantifiable Context: We selected three months' worth of monthly reports for ADAMHS and one closeout report for OHMAS. Recommendation: We recommend that management develop and implement policies and procedures that address compliance requirements. Additionally, provide comprehensive training to employees on these policies and ensure consistent monitoring to maintain accuracy and timeliness in federal reporting. We also suggest a review process. Views of Responsible Officials: POF's initial and current exposure a few months later to Single Audit compliance requirements have sharpened its focus on the need to purposefully identify and maintain corroborating evidence regarding its timely submission and acceptance by each of the respective funding sources. While POF believes that all these reporting requirements were timely met and accepted by all funding sources, it did not consistently maintain either the report itself, or the related documentation such as copies of the emails sent or the associated read-receipts as evidence of these reports. Effective July 1, POF routinely and consistently accumulated and organized these documents as well as ancillary evidence of their transmission to, receipt by, and acknowledgement of acceptance by the federal agency. POF will be more diligent in its transmissions to funders. POF noted that the 2022 Closeout Report was inexplicably re-submitted instead of the correct 2023 Closeout Report. This is unacceptable, and POF will add a second set of reviews by a second person to improve quality control in this area. As necessary, POF will seek professional education and advice in implementing policies, practices, and procedures in addition to those already described herein.

2023-006 Supporting Documents for Eligibility Requirements Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Significant Deficiency Compliance Requirement: Eligibility Criteria: According to Section 200.303 of the Uniform Guidance, a nonfederal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Point of Freedom must document their policies and procedures in determining eligibility and must have controls in place to ensure compliance with their policies and procedures and prevent fraud. Condition: The organization currently lacks valid identification documents for some residents, many of whom are homeless. Cause of Condition: The absence of proper identification documentation is primarily due to the residents' homeless status, which complicates the collection and maintenance of such documents. Effect: Without valid identification documents, the organization may face challenges in meeting eligibility requirements and ensuring compliance with documentation standards. This could potentially affect the program's effectiveness and the residents' access to necessary services. Questioned Cost: Not Quantifiable Context: We reviewed documentation for 5 participants and found that 2 of them do not have valid identification documents. This issue is particularly prevalent among homeless residents. Recommendation: We recommend that the organization implements a systematic approach to documenting residents' identification, including those who are homeless. Additionally, the organization should consult with the program manager to establish guidelines and procedures for effectively documenting identification in cases where traditional documentation is challenging to obtain. Views of Responsible Officials: During September 2024, POF updated its Housing Procedures Manual in compliance with Section 200.303 of Uniform Guidance and Ohio Recovery House Regulations. This document now more fully addresses, among other things, eligibility and required minimum documentation standards. POF has already begun to build individual client files to retain and periodically update these required supporting documents for all Its affected residential clients.

2023-007 Timely Submission of Single Audit Report Program Name: State Opioid Response Federal Assistance Listing No.: 93.788 Federal Agency: Department of Health and Human Services Federal Award Identification: Unknown Pass-Through Entity Number: Unknown Applicable Pass-Through Entity: Ohio Department of Mental Health and Addiction Services and Cuyahoga County, Ohio Type of Finding: Significant Deficiency Compliance Requirement: Reporting Criteria: According to the OMB Compliance Supplement, Part 6 and 2 CFR 200.512 (a)(1), non-federal entities that expend $750,000 or more in federal awards during a fiscal year are required to submit a complete and accurate Data Collection Form (DCF) and a Single Audit report package to the Federal Audit Clearinghouse (FAC) within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. The DCF is a critical element in ensuring transparency and accountability for the use of federal funds. Condition: The Organization did not submit the required DCF for the period September 30, 2023, by the required deadline. Cause of Condition: The delay in submission was attributed to a change in the fiscal year and a postponement of the 2022 audit. Effect: Failure to submit the DCF on time resulted in noncompliance with federal regulations, which could lead to the potential withholding of future federal funding or other sanctions. It also undermines the Organization's compliance status and may affect the entity's standing with grantor agencies and other stakeholders. Questioned Cost: Not Quantifiable Context: Last year was the initial audit, leading to subsequent delays that impacted the 2023 audit timeline. Additionally, the change in the fiscal year, where the expected fiscal year-end was initially December but was shifted to September 30, resulted in an earlier deadline for the current year, moving it to June. Recommendation: We recommend that the Organization enhance audit planning and scheduling to account for changes in the fiscal year and prior delays, ensuring timely submission of the DCF. Strengthening internal controls, including assigning responsibility for monitoring deadlines, can help avoid future noncompliance. Additionally, improved coordination with external auditors and contingency planning for unforeseen delays will further support timely submissions and maintain the Organization’s compliance with federal regulations. Views of Responsible Officials: To eliminate this finding from recurring in future periods, POF will create an internal Annual Audit Plan (AAP), identifying required tasks, deliverables, due dates, and responsible internal and external personnel for each task. POF's AAP will include five-six (5-6) months' lead time prior to future mandatory submission dates. Simultaneously, POF will communicate the AAP timelines with the Audit Engagement Partner to ensure audit staffing continuity and availability. POF will achieve accurate, complete, and timely future SAR and DCF submissions through incorporating these process improvements along with strengthening its Internal controls, gaining experience in its first two Single Audits, and in acquiring an understanding of the Auditor's role in verifying compliance and the adequacy of related supporting documentation.