Audit 328838

Finding 2023-001 Federal Award: U.S. Department of Health and Human Services - Substance Abuse and Mental health Services. ALN# 93.243 Project Launch & Project Aware No. H79SM087486 & No. H79SM087752 Finding Type: Significant Deficiency Criteria: Cash management of grant funds Condition: We noted a lack of specificity regarding the expenditure reimbursement process in BFDI’s financial management policy. BFDI was also unable to identify a control in place where an independent review of the monthly financial status reports took place prior to the submission of cash reimbursement requests. Effect: Significant deficiency in internal controls. Cause: The lack of sufficient internal controls over the cost reimbursement process. Questioned Cost: None Recommendation: BFDI should establish specific written controls over the cash reimbursement process for federal awards. BFDI should also retain proper support for cash reimbursements that evidences the independent review occurred prior to submission of reimbursement requests into the payment management system. Management Response: BFDI has updated its financial management processes to require written authorization by either the CFO or CEO prior to the submission of reimbursement requests in the payment management system. This approval will be performed on the Financial Status Report and maintained for independent review.

FINDING 2023-002 Federal Award: Department of Health and Human Services - Substance Abuse and Mental Health Services ALN# 93.243 Project Launch No. H79SM087752 Finding Type: Level of Effort Criteria: The Project Launch grant award states the following: “Organizations receiving Federal Funds may not exceed 100% level of effort for any program staff member (Key Personnel or otherwise) across all federally funded sources. Any changes to Key Personnel including level of effort involving separation from the project for any continuous period of three months or longer, or a reduction in time dedicated to the project of 25% or more requires prior approval and must be submitted as a post award amendment in eRA Commons. Note: If an organization is awarded a grant and chooses to move forward with hiring an individual for a Key Personnel position before receiving SAMHSA's formal approval, this will be done at the organization's own risk.” Condition: We noted a change in Key Personnel for the project director role that also included a decrease in the level of effort from 100% to 75%. The change in Key Personnel was made during the payroll period beginning on 10/30/2023 and prior to the submission into eRA commons on 12/21/2023. The grantor’s approval was granted in a new award letter dated 1/8/2024. The timeline between the change and the approval totaled 71 days and less than 3 months. In the approval however, GTC noted the role was still classified at 100% level of effort. Effect: Non-compliance with program requirements for the level of effort. Cause: BFDI oversight in review of the level of effort program requirements. Questioned Cost: None. Recommendation: We recommend management adhere to their grant requirements including the process for obtaining required approvals for level of effort changes. Management Response: This finding was due to a change in Key Personnel for a project director role that also included a decrease in the level of effort from 100% to 75% from the date of hire on 10/31/23 until 8/19/24. BFDI subsequently submitted a request for retroactive approval of this change on 10/28/2024. The Project Director’s Level of Effort was increased to 100% as of 8/19/24.

Finding 2023-001 Federal Award: U.S. Department of Health and Human Services - Substance Abuse and Mental health Services. ALN# 93.243 Project Launch & Project Aware No. H79SM087486 & No. H79SM087752 Finding Type: Significant Deficiency Criteria: Cash management of grant funds Condition: We noted a lack of specificity regarding the expenditure reimbursement process in BFDI’s financial management policy. BFDI was also unable to identify a control in place where an independent review of the monthly financial status reports took place prior to the submission of cash reimbursement requests. Effect: Significant deficiency in internal controls. Cause: The lack of sufficient internal controls over the cost reimbursement process. Questioned Cost: None Recommendation: BFDI should establish specific written controls over the cash reimbursement process for federal awards. BFDI should also retain proper support for cash reimbursements that evidences the independent review occurred prior to submission of reimbursement requests into the payment management system. Management Response: BFDI has updated its financial management processes to require written authorization by either the CFO or CEO prior to the submission of reimbursement requests in the payment management system. This approval will be performed on the Financial Status Report and maintained for independent review.

FINDING 2023-002 Federal Award: Department of Health and Human Services - Substance Abuse and Mental Health Services ALN# 93.243 Project Launch No. H79SM087752 Finding Type: Level of Effort Criteria: The Project Launch grant award states the following: “Organizations receiving Federal Funds may not exceed 100% level of effort for any program staff member (Key Personnel or otherwise) across all federally funded sources. Any changes to Key Personnel including level of effort involving separation from the project for any continuous period of three months or longer, or a reduction in time dedicated to the project of 25% or more requires prior approval and must be submitted as a post award amendment in eRA Commons. Note: If an organization is awarded a grant and chooses to move forward with hiring an individual for a Key Personnel position before receiving SAMHSA's formal approval, this will be done at the organization's own risk.” Condition: We noted a change in Key Personnel for the project director role that also included a decrease in the level of effort from 100% to 75%. The change in Key Personnel was made during the payroll period beginning on 10/30/2023 and prior to the submission into eRA commons on 12/21/2023. The grantor’s approval was granted in a new award letter dated 1/8/2024. The timeline between the change and the approval totaled 71 days and less than 3 months. In the approval however, GTC noted the role was still classified at 100% level of effort. Effect: Non-compliance with program requirements for the level of effort. Cause: BFDI oversight in review of the level of effort program requirements. Questioned Cost: None. Recommendation: We recommend management adhere to their grant requirements including the process for obtaining required approvals for level of effort changes. Management Response: This finding was due to a change in Key Personnel for a project director role that also included a decrease in the level of effort from 100% to 75% from the date of hire on 10/31/23 until 8/19/24. BFDI subsequently submitted a request for retroactive approval of this change on 10/28/2024. The Project Director’s Level of Effort was increased to 100% as of 8/19/24.