Audit 342892

FY End
2024-08-31
Total Expended
$2.17M
Findings
2
Programs
6
Year: 2024 Accepted: 2025-02-18

Organization Exclusion Status:

Checking exclusion status...

Findings

ID Ref Severity Repeat Requirement
523583 2024-001 Significant Deficiency Yes P
1100025 2024-001 Significant Deficiency Yes P

Programs

Contacts

Name Title Type
P3SZQX5CLH63 Dan Monson Auditee
9793619802 Nancy MacK Auditor
No contacts on file

Notes to SEFA

Title: GENERAL Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Schedule of Revenues and Expenditures of State and Federal Awards presents the activity of all applicable state and federal awards of Mental Health Mental Retardation Authority of Brazos Valley (the Center). The Center's reporting entity is defined in Note 1 of the basic financial statements. State and federal awards received directly from federal and state agencies, as well as federal and state awards passed through other governmental agencies, are included on the Schedule of Revenues and Expenditures of State and Federal Awards. The information in the Schedule of Revenues and Expenditures of State and Federal Awards is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule of Revenues and Expenditures of State and Federal Awards present only a selected portion of the operations of the Center, it is not intended to and does not present the financial position, changes in financial position, or cash flows of the Center.
Title: BASIS OF ACCOUNTING Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned.
Title: RELATIONSHIP TO BASIC FINANCIAL STATEMENTS Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Certain state and federal programs have been excluded from the Schedule of Expenditures of State and Federal Awards, including monies received under vendor contract for Title XIX ICF/MR and Title XIX HCS/MR, and other Medicaid/Medicare funding earned from providing patient services. The state and federal monies excluded from the Schedule of Revenues and Expenditures of State and Federal Awards are not considered financial assistance as defined in the Uniform Guidance and are included in total local revenues in the basic financial statements. Texas Correctional Office on Offenders with Medical or Mental Impairments (TCOOMMI) and PASRR have been excluded from the Schedule of Revenues and Expenditures of State and Federal Awards as these monies are considered contracts, not state or federal awards.
Title: STATE AWARD GUIDELINES Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. State awards are subject to HHSC's Guidelines for Annual Financial and Compliance Audits of Community MHMR Centers (21st Revision) as well as the Office of the Governor's State of Texas Single Audit Circular. Such guidelines are consistent with those required under the Single Audit Act of 1996, the Uniform Guidance and Government Auditing Standards, issued by the Comptroller General of the United States.
Title: INDIRECT COSTS Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance.
Title: IDD ARPA, IDD CIS, AND IDD CRISIS RESPITE FUNDS Accounting Policies: The Schedule of Revenues and Expenditures of State and Federal Awards is prepared on the modified accrual basis of accounting. The modified accrual basis of accounting is described in Note 3 of the basic financial statements. Such expenditures are recognized following the cost principles contained in the Uniform Guidance or State of Texas Uniform Grant Management Standards, wherein certain types of expenditures are not allowable or are limited as to reimbursement. State and federal grant funds are considered to be earned to the extent of expenditures made under the provisions of the grant, and, accordingly, when such funds are received, they are recorded as unearned revenues until earned. De Minimis Rate Used: N Rate Explanation: The Center has elected not to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The Center has received authorization to carryover remaining unspent funds for IDD ARPA, IDD CIS, and IDD Crisis Respite Funds to fiscal year 2024.

Finding Details

Criteria: A properly designed system of internal control over financial reporting includes timely reconciliations of balance sheet accounts on a monthly or quarterly basis, depending on the account. Comprehensive reconciliations should include sub-ledger or alternative system documentation that supports and justifies the balance within the account, demonstrates a roll forward from the prior period which ties to revenue (where applicable), and ensures any reconciling items are timely addressed and cleared. Balance sheet reconciliation which simply demonstrate debits and credits that make up the balance of the account do not demonstrate the needed criteria to justify balances. Condition: The Center did not consistently complete balance sheet reconciliations which were accurate, and that adequately justified the balances within the account throughout the year or at year end close. These were completed only for the audit. Cause: The Center experienced significant change over the past couple of years, including turnover in some key accounting and IT positions. Current personnel are still in the process of being trained and becoming familiar with new programs and the prior year implementation of new software. The amount of change has caused the Center to lose focus of core activities required to produce timely and accurate financial statements. Effect: The production of audit schedules at year end were substantially delayed as a result of reconciliations having to be completed or corrected. Because of the delay in having timely reconciled general ledger accounts, management made several adjustments in preparation for the audit. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all significant general ledger accounts are reconciled on a timely basis, as is appropriate for the account, in a manner that supports the account balance, with any reconciling items being addressed in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.
Criteria: A properly designed system of internal control over financial reporting includes timely reconciliations of balance sheet accounts on a monthly or quarterly basis, depending on the account. Comprehensive reconciliations should include sub-ledger or alternative system documentation that supports and justifies the balance within the account, demonstrates a roll forward from the prior period which ties to revenue (where applicable), and ensures any reconciling items are timely addressed and cleared. Balance sheet reconciliation which simply demonstrate debits and credits that make up the balance of the account do not demonstrate the needed criteria to justify balances. Condition: The Center did not consistently complete balance sheet reconciliations which were accurate, and that adequately justified the balances within the account throughout the year or at year end close. These were completed only for the audit. Cause: The Center experienced significant change over the past couple of years, including turnover in some key accounting and IT positions. Current personnel are still in the process of being trained and becoming familiar with new programs and the prior year implementation of new software. The amount of change has caused the Center to lose focus of core activities required to produce timely and accurate financial statements. Effect: The production of audit schedules at year end were substantially delayed as a result of reconciliations having to be completed or corrected. Because of the delay in having timely reconciled general ledger accounts, management made several adjustments in preparation for the audit. Recommendation: The Center should continue to train existing employees on significant accounting matters and ensure that all significant general ledger accounts are reconciled on a timely basis, as is appropriate for the account, in a manner that supports the account balance, with any reconciling items being addressed in a timely manner. Views of Responsible Officials and Planned Corrective Actions: Management of the Center agrees with the finding and the recommended procedures will be implemented.