Audit 34453

U.S. Department of Health and Human Services Block Grant for Prevention and Treatment of Substance Abuse (Assistance Listing No. 93.959) Pass-Through Entity-Tennessee Department of Mental Health and Substance Abuse Services Period of Availability Criteria: When submitting reimbursement requests to grantor agencies the entity should ensure that all costs have been incurred during the period of availability of the related grant. Condition: The Organization controls related to invoice review did not identify that the period of performance for an invoice was prior to the period of availability of the grant it was charged to. As a result reimbursements were requested for an expense that is not covered by the grant?s period of availability in the grant agreement. Cause: The cause of this was due to an oversight of management when reviewing the invoice for approval. It was noted that the Organization does not typically receive invoice billing for quarterly expenses due to the nature of operations. As a result, reviewing an invoice for its period of performance is not a process that is required often and as a result an error during the review and booking of this expense occurred. Effects: Due to the expense being recorded in the incorrect fiscal year it was then partially allocated to the grant and subsequently requested for reimbursement. This resulted in an instance of noncompliance due to the expense being incurred prior to the period of availability for the grant. Questioned Costs: The questioned cost of allocated portion of this invoice to the grant was $1,326. Context: This was the only instance noted in testing and appears to be an isolated instance. No further sampling occurred and this error in the sample was extrapolated to the entire population resulting in an expected misstatement of $7,463. Recommendation: We recommend that management review invoices received near fiscal year end with an extra level of scrutiny to ensure that the invoice is being booked to the correct period as determined by the period of performance. Views of Responsible Officials: We will ensure all covered transactions are properly reviewed for the period of performance. We will also ensure they are recorded and subsequently requested for reimbursement in the proper period.

U.S. Department of Health and Human Services Block Grant for Prevention and Treatment of Substance Abuse (Assistance Listing No. 93.959) Pass-Through Entity-Tennessee Department of Mental Health and Substance Abuse Services Period of Availability Criteria: When submitting reimbursement requests to grantor agencies the entity should ensure that all costs have been incurred during the period of availability of the related grant. Condition: The Organization controls related to invoice review did not identify that the period of performance for an invoice was prior to the period of availability of the grant it was charged to. As a result reimbursements were requested for an expense that is not covered by the grant?s period of availability in the grant agreement. Cause: The cause of this was due to an oversight of management when reviewing the invoice for approval. It was noted that the Organization does not typically receive invoice billing for quarterly expenses due to the nature of operations. As a result, reviewing an invoice for its period of performance is not a process that is required often and as a result an error during the review and booking of this expense occurred. Effects: Due to the expense being recorded in the incorrect fiscal year it was then partially allocated to the grant and subsequently requested for reimbursement. This resulted in an instance of noncompliance due to the expense being incurred prior to the period of availability for the grant. Questioned Costs: The questioned cost of allocated portion of this invoice to the grant was $1,326. Context: This was the only instance noted in testing and appears to be an isolated instance. No further sampling occurred and this error in the sample was extrapolated to the entire population resulting in an expected misstatement of $7,463. Recommendation: We recommend that management review invoices received near fiscal year end with an extra level of scrutiny to ensure that the invoice is being booked to the correct period as determined by the period of performance. Views of Responsible Officials: We will ensure all covered transactions are properly reviewed for the period of performance. We will also ensure they are recorded and subsequently requested for reimbursement in the proper period.