Audit 329033

2023-001: Allocable Costs/Cost Principles - Reporting of Payroll based on budget. Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.430(i)(1)(viii)(c), the auditee’s system of internal must include control processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The Authority allocated wages and fringe benefits to the program based on the grant budget, with no adjustment made to actual time spent. Identification of How Likely Questioned Costs Were Computed: A schedule was prepared of time and attendance reports for the year which was compared to the amount charged to the grant. Known Questioned Costs: $19,693 Context: The Authority charged wage and fringe benefit for all employees providing services under the Certified Community Behavioral Health Clinic Expansion Grant based on budget amounts for the fiscal year. A schedule was prepared by management of the time spent on the grant for all employees for the year, which was compared to budget. Cause/Effect: Management was under the understanding that since the budget had been approved by the grantor that they were allowed to charge the budgeted amount to the grant. As a result, wages and fringe benefits charged to the grant were overstated based on time and attendance reports. Recommendation: We recommend the Authority review all federally funded grants and implement a review process to ensure the amount charged to the Federal award is based on the time the employees spend on providing the services. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-002: Allocable Costs/Cost Principles - Reporting of PTO Time. Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.431, Leave time is an allowable cost if, among other requirements, the costs are equitably allocated to all related activities. Condition: Accrued PTO time was adjusted as of September 30, 2023, however certain employees were transferred over to the grant program that had accrued PTO as of September 30, 2022 that was not taken into account. As a result, the grant was charged PTO time for amounts that had been accrued in prior years in other programs and activities. Identification of How Likely Questioned Costs Were Computed: Based on the accrued PTO schedules as of September 30, 2023 and 2022 Known Questioned Costs: $22,971 Context: There were five employees transferred over to the new grant program, reviewed all five transferred employees PTO accrual. Cause/Effect: This was just an oversight. A schedule was prepared but did not take into account the PTO time the employees had earned prior to transfer to the new grant program. Recommendation: We recommend that the schedule be revised to take into account the PTO time employees have prior to being transferred into the grant activities. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-003: Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A SANILAC COUNTY COMMUNITY MENTAL HEALTH AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2023 Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318(a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Authority did not utilize federal procurement requirements cited above for the tele-health services and SUD Peer Recovery Service contracted service providers utilized for the Certified Community Behavioral Health Clinics project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from the tele-health services and SUD Peer Recovery Service contractor payments billed (federal portion) during the October 1, 2022, through September 29, 2023, period as summarized from the request for disbursement of funds submitted to SAMHSA. Known Questioned Costs: $33,440 Context: We tested the procurement of the three contracts related to tele-health services and SUD Peer Recovery Service contract service providers utilized and funded by the grant and identified that two of the three contracts did not follow federal procurement requirements. Cause/Effect: Prior to the Authority being awarded the grant, tele-health services were previously being provided under a current contract. The Authority was not able to document the basis for not providing a competitive procurement of tele-health services specific to this contract nor supporting a reason it should follow a noncompetitive procurement methodology. The contract for SUD Peer Recovery Services has been indicated by management to meet the criteria as a sole source procurement as allowed under 2 CFR 200.320(c); however, adequate documentation was not available to support this claim at the time the contract was awarded (subsequently a Google search was provided of only Lapeer and Sanilac Counties). The Authority did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for tele-health services and SUD Peer Recovery Services and coordination services for the Certified Community Behavioral Health Clinic project. Recommendation: We recommend the Authority follow federal procurement as required in 2 CFR 200.319(d) for all contracts reimbursed with federal funds. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-004: Evaluating Potential Contractor for Debarment and Suspension Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: A nonfederal entity must have adequate procedures in place to verify that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CRF section 180.300; 48 CFR section 52.209-6). Condition: During procurement testing of the Certified Community Behavior Health Clinic Expansion Grant, we noted that the Authority did not have documentation that sam.gov was reviewed to ensure the consultant utilized was not suspended or debarred for two of the three contracts expended. The Authority checked suspension and debarment on the individual clinicians, however, did not check it for the company. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None. Subsequently, the sam.gov was reviewed to ensure that the contractors were not suspended or debarred. Context: The consultant utilized for the Certified Community Behavior Health Clinic Expansion Grant project were not evaluated prior to the award of the contract. Cause/Effect: The Authority did not have controls in place to ensure timely compliance with the suspension and debarment evaluation requirements prior to the awarding of contracts for the Certified Community Behavioral Health Clinic Expansion Grant or other federal funds. Recommendation: We recommend the Authority implement adequate controls to ensure verification of debarment, suspension, or exclusion takes place before entering covered transactions. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-005: Written Policies and Procedures Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal control and noncompliance with laws and regulations Repeat Finding: No Criteria: As a precondition to receive federal awards, prospective recipients must have effective internal controls over the federal award. As described in 2 CFR, Part 200.303, nonfederal entities must have certain written policies and procedures surrounding the management of their federal awards. Such policies should include procedures for collecting payments of federal funds per 2 CRF 200.305, cash management (i.e., minimizing the time between draws and actual disbursing of federal awards) per 2 CFR 200.302(b)(6), allowable cost per 2 CFR 200.403, and conflict of interest per 2 CFR 200.318. Per 2 CFR 200.319(d), the non-Federal entity must have written procedures for procurement transactions. Condition: The Authority did not have written procedures for cash management and allowable cost. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: N/A Cause/Effect: Although the Authority is aware that they were required to have written policies and procedures for the items noted above, they were using the grant agreement guidelines that provide grantees with guidance for ensuring the existing accounting and personnel policies and procedures include the necessary controls. These guidelines address the compliance areas required by the Uniform Guidance. Recommendation: We recommend the Authority adopt written policies and procedures over cash management and allowable costs required under the Uniform Guidance. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-006: Preparing Accurate and Complete Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined with section 200.502. Condition: The Authority did not identify that they were subject to an audit under the Uniform Guidance (U.G.) and a schedule of expenditures of federal awards (SEFA) was not prepared by management. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: This was the first year of the CCBHC grant which was $568,350 of the total of $1,029,718 federal awards. In reviewing if a single audit was required only the CCBHC grant was consider which was below the $750,000 threshold, however when combined with the entities other federal awards the amount exceed the $750,000 threshold. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Cause/Effect: The Authority’s controls were not adequate to ensure that they identify the requirement to have an audit under the Uniform Guidance and the preparation of an accurate and complete SEFA. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Recommendation: We recommend the Authority review federal, state, and local grants to determine if they are federally funded and, if federally funded, utilize the account number outlined in the State of Michigan chart of accounts to track federal funding. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-001: Allocable Costs/Cost Principles - Reporting of Payroll based on budget. Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.430(i)(1)(viii)(c), the auditee’s system of internal must include control processes to review after-the-fact interim charges made to a Federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition: The Authority allocated wages and fringe benefits to the program based on the grant budget, with no adjustment made to actual time spent. Identification of How Likely Questioned Costs Were Computed: A schedule was prepared of time and attendance reports for the year which was compared to the amount charged to the grant. Known Questioned Costs: $19,693 Context: The Authority charged wage and fringe benefit for all employees providing services under the Certified Community Behavioral Health Clinic Expansion Grant based on budget amounts for the fiscal year. A schedule was prepared by management of the time spent on the grant for all employees for the year, which was compared to budget. Cause/Effect: Management was under the understanding that since the budget had been approved by the grantor that they were allowed to charge the budgeted amount to the grant. As a result, wages and fringe benefits charged to the grant were overstated based on time and attendance reports. Recommendation: We recommend the Authority review all federally funded grants and implement a review process to ensure the amount charged to the Federal award is based on the time the employees spend on providing the services. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-002: Allocable Costs/Cost Principles - Reporting of PTO Time. Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.431, Leave time is an allowable cost if, among other requirements, the costs are equitably allocated to all related activities. Condition: Accrued PTO time was adjusted as of September 30, 2023, however certain employees were transferred over to the grant program that had accrued PTO as of September 30, 2022 that was not taken into account. As a result, the grant was charged PTO time for amounts that had been accrued in prior years in other programs and activities. Identification of How Likely Questioned Costs Were Computed: Based on the accrued PTO schedules as of September 30, 2023 and 2022 Known Questioned Costs: $22,971 Context: There were five employees transferred over to the new grant program, reviewed all five transferred employees PTO accrual. Cause/Effect: This was just an oversight. A schedule was prepared but did not take into account the PTO time the employees had earned prior to transfer to the new grant program. Recommendation: We recommend that the schedule be revised to take into account the PTO time employees have prior to being transferred into the grant activities. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-003: Procurement Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A SANILAC COUNTY COMMUNITY MENTAL HEALTH AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2023 Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.318(a), the non-Federal entity must have and use documented procurement procedures, consistent with State, local, and tribal laws and regulations and the standards of this section, for the acquisition of property or services required under a Federal award or subaward. The non-Federal entity's documented procurement procedures must conform to the procurement standards identified in §§ 200.317 through 200.327. In addition, per 2 CFR 200.318(i), the non-Federal entity must maintain records sufficient to detail the history of procurement. Condition: The Authority did not utilize federal procurement requirements cited above for the tele-health services and SUD Peer Recovery Service contracted service providers utilized for the Certified Community Behavioral Health Clinics project. Identification of How Likely Questioned Costs Were Computed: The questioned costs were determined from the tele-health services and SUD Peer Recovery Service contractor payments billed (federal portion) during the October 1, 2022, through September 29, 2023, period as summarized from the request for disbursement of funds submitted to SAMHSA. Known Questioned Costs: $33,440 Context: We tested the procurement of the three contracts related to tele-health services and SUD Peer Recovery Service contract service providers utilized and funded by the grant and identified that two of the three contracts did not follow federal procurement requirements. Cause/Effect: Prior to the Authority being awarded the grant, tele-health services were previously being provided under a current contract. The Authority was not able to document the basis for not providing a competitive procurement of tele-health services specific to this contract nor supporting a reason it should follow a noncompetitive procurement methodology. The contract for SUD Peer Recovery Services has been indicated by management to meet the criteria as a sole source procurement as allowed under 2 CFR 200.320(c); however, adequate documentation was not available to support this claim at the time the contract was awarded (subsequently a Google search was provided of only Lapeer and Sanilac Counties). The Authority did not utilize federal procurement requirements to ensure fair and open competition and reasonable cost for tele-health services and SUD Peer Recovery Services and coordination services for the Certified Community Behavioral Health Clinic project. Recommendation: We recommend the Authority follow federal procurement as required in 2 CFR 200.319(d) for all contracts reimbursed with federal funds. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-004: Evaluating Potential Contractor for Debarment and Suspension Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal control and material noncompliance with laws and regulations Repeat Finding: No Criteria: A nonfederal entity must have adequate procedures in place to verify that an entity with which it plans to enter into a covered transaction is not debarred, suspended, or otherwise excluded (2 CFR sections 200.212 and 200.318(h); 2 CRF section 180.300; 48 CFR section 52.209-6). Condition: During procurement testing of the Certified Community Behavior Health Clinic Expansion Grant, we noted that the Authority did not have documentation that sam.gov was reviewed to ensure the consultant utilized was not suspended or debarred for two of the three contracts expended. The Authority checked suspension and debarment on the individual clinicians, however, did not check it for the company. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None. Subsequently, the sam.gov was reviewed to ensure that the contractors were not suspended or debarred. Context: The consultant utilized for the Certified Community Behavior Health Clinic Expansion Grant project were not evaluated prior to the award of the contract. Cause/Effect: The Authority did not have controls in place to ensure timely compliance with the suspension and debarment evaluation requirements prior to the awarding of contracts for the Certified Community Behavioral Health Clinic Expansion Grant or other federal funds. Recommendation: We recommend the Authority implement adequate controls to ensure verification of debarment, suspension, or exclusion takes place before entering covered transactions. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-005: Written Policies and Procedures Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal control and noncompliance with laws and regulations Repeat Finding: No Criteria: As a precondition to receive federal awards, prospective recipients must have effective internal controls over the federal award. As described in 2 CFR, Part 200.303, nonfederal entities must have certain written policies and procedures surrounding the management of their federal awards. Such policies should include procedures for collecting payments of federal funds per 2 CRF 200.305, cash management (i.e., minimizing the time between draws and actual disbursing of federal awards) per 2 CFR 200.302(b)(6), allowable cost per 2 CFR 200.403, and conflict of interest per 2 CFR 200.318. Per 2 CFR 200.319(d), the non-Federal entity must have written procedures for procurement transactions. Condition: The Authority did not have written procedures for cash management and allowable cost. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: N/A Cause/Effect: Although the Authority is aware that they were required to have written policies and procedures for the items noted above, they were using the grant agreement guidelines that provide grantees with guidance for ensuring the existing accounting and personnel policies and procedures include the necessary controls. These guidelines address the compliance areas required by the Uniform Guidance. Recommendation: We recommend the Authority adopt written policies and procedures over cash management and allowable costs required under the Uniform Guidance. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.

2023-006: Preparing Accurate and Complete Schedule of Expenditures of Federal Awards (SEFA) Assistance Listing Number, Federal Agency, and Program Name: Assistance Listing Number 93.696, Certified Community Behavioral Health Clinic Expansion Grant Federal Award Identification Number and Year: 1H79SM086680-01, Program Grant Period 09/29/2022-09/29/2023 Pass-through Entity: N/A Type: Material weakness in internal controls and material noncompliance with laws and regulations Repeat Finding: No Criteria: Per 2 CFR 200.510(b), the auditee must prepare a schedule of expenditures of federal awards for the period covered by the auditee’s financial statements, which must include the total federal awards expended as determined with section 200.502. Condition: The Authority did not identify that they were subject to an audit under the Uniform Guidance (U.G.) and a schedule of expenditures of federal awards (SEFA) was not prepared by management. Identification of How Likely Questioned Costs Were Computed: N/A Known Questioned Costs: None Context: This was the first year of the CCBHC grant which was $568,350 of the total of $1,029,718 federal awards. In reviewing if a single audit was required only the CCBHC grant was consider which was below the $750,000 threshold, however when combined with the entities other federal awards the amount exceed the $750,000 threshold. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Cause/Effect: The Authority’s controls were not adequate to ensure that they identify the requirement to have an audit under the Uniform Guidance and the preparation of an accurate and complete SEFA. As a result, management may fail to identify that an audit under the Uniform Guidance is required and that all federal dollars are included. Recommendation: We recommend the Authority review federal, state, and local grants to determine if they are federally funded and, if federally funded, utilize the account number outlined in the State of Michigan chart of accounts to track federal funding. View of Responsible Officials and Planned Corrective Action Plan: See attached corrective action plan.