FAC Explorer

Audit 348829

FY End
2024-08-31
Total Expended
$23.68M
Findings
12
Programs
20
Organization: Integral Care (TX)
Year: 2024 Accepted: 2025-03-27
Auditor: Eide Bailly LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
537546 2024-001 Significant Deficiency - BC
537547 2024-001 Significant Deficiency - BC
537548 2024-001 Significant Deficiency - BC
537549 2024-001 Significant Deficiency - BC
537550 2024-001 Significant Deficiency - BC
537551 2024-001 Significant Deficiency - BC
1113988 2024-001 Significant Deficiency - BC
1113989 2024-001 Significant Deficiency - BC
1113990 2024-001 Significant Deficiency - BC
1113991 2024-001 Significant Deficiency - BC
1113992 2024-001 Significant Deficiency - BC
1113993 2024-001 Significant Deficiency - BC

Programs

ALN Program Spent Major Findings
93.778 Medical Assistance Program $3.56M - 0
93.958 Block Grants for Community Mental Health Services $1.32M Yes 1
93.997 Assisted Outpatient Treatment $810,458 - 0
14.267 Continuum of Care Program $512,835 - 0
93.558 Temporary Assistance for Needy Families $509,998 - 0
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (sed) $466,430 - 0
93.150 Projects for Assistance in Transition From Homelessness (path) $429,780 - 0
21.023 Emergency Rental Assistance Program $357,191 - 0
93.914 Hiv Emergency Relief Project Grants $349,875 - 0
16.575 Crime Victim Assistance $322,993 - 0
14.218 Community Development Block Grants/entitlement Grants $196,989 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $165,000 Yes 0
93.667 Social Services Block Grant $159,113 - 0
93.087 Enhance Safety of Children Affected by Substance Abuse $150,206 - 0
93.788 Opioid Str $115,039 - 0
93.959 Block Grants for Prevention and Treatment of Substance Abuse $90,923 - 0
93.791 Money Follows the Person Rebalancing Demonstration $49,198 - 0
93.387 National and State Tobacco Control Program (b) $23,390 - 0
93.242 Mental Health Research Grants $13,958 - 0
93.243 Substance Abuse and Mental Health Services_projects of Regional and National Significance $875 - 0

Contacts

Name Title Type
P4R3B21EPL29 Joe Carrington Auditee
5124404012 Rebekah Scott Auditor
No contacts on file

Notes to SEFA

Title: Reporting Entity Accounting Policies: The accompanying Schedule of Expenditures of State and Federal Awards is presented using the modified accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. 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 Texas 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: Y Rate Explanation: Integral Care has elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying Schedule of Expenditures of State and Federal Awards presents the activity of all applicable state and federal awards of Integral Care. Integral Care’s reporting entity is defined in Note 1 to the basic financial statements. State and federal awards received directly from state and federal agencies, as well as federal awards passed through other governmental agencies, are included on the schedule. The information in the Schedule of 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 Expenditures of State and Federal Awards presents 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: State Award Guidelines Accounting Policies: The accompanying Schedule of Expenditures of State and Federal Awards is presented using the modified accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. 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 Texas 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: Y Rate Explanation: Integral Care has elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. State awards are subject to the Texas Health and Human Services Commission’s (HHSC) Guidelines for Annual Financial and Compliance Audits of Community MHMR Centers. Such guidelines are consistent with those required under Title 2, U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), the Texas Grant Management Standards, and Government Auditing Standards, issued by the Comptroller General of the United States.
Title: Relationship to Basic Financial Statements Accounting Policies: The accompanying Schedule of Expenditures of State and Federal Awards is presented using the modified accrual basis of accounting, except for subrecipient expenditures, which are recorded on the cash basis. 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 Texas 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: Y Rate Explanation: Integral Care has elected to use the 10% de minimis indirect cost rate allowed under the Uniform Guidance. Certain state and federal awards have been excluded from the Schedule of Expenditures of State and Federal Awards (SESFA). Federal revenues earned and received from the Centers for Medicare and Medicaid Services (CMS) and passed through HHSC for the Charity Cost Pool or Directed Payment Programs are excluded from the Federal awards section of the SESFA. The Veterans Administration revenue is excluded from the SEFA as it is not a direct award or pass through award to the Center but contract for housing for the VA from the Center through the Veteran’s Safe Haven Program. In addition, certain state contracts have been excluded from the State awards section of the SESFA by specific request of the funding agency. These contracts are with the Texas Correctional Office on the Offenders with Medical or Mental Impairments (TCOOMI) which is passed through the Texas Department of Criminal Justice. The state and federal monies excluded from the SESFA are not considered federal or state awards as defined by the Uniform Guidance or Texas Grant Management Standards. State and federal revenues in Integral Care’s basic financial statements differ from the accompanying schedule due to classifications based on the pass-through entity. Integral Care Seabrook, LLC is an enterprise fund and therefore included on the SEFSA but not on the budget to actual for the general fund. A reconciliation of the SESFA to the audited financial statements general fund budget to actual is as follows: "See the Notes to the SEFA for chart/table".

Finding Details

Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.
Finding 2024-001
2024-001 U.S. Department of Health and Human Services Passed-through the Texas Department of State Health Services FFAL #93.958 Mental Health Block Grant (Federal Award) (Contract numbers HHS000502700001, HHS001108400004, HHS001204800001, and H79SM085571-01) Health Community Collaboratives (State Award – No FFAL) Allowable Costs Cash Management Non-Material Noncompliance Significant Deficiency in Internal Control Criteria: Section 2 CFR 200.414 establishes that recipients and subrecipients that do not have a current Federal negotiated indirect cost rate (including provisional rate) may elect to charge a de minimis rate of up to 10 percent of modified total direct costs (MTDC). The recipient or subrecipient is authorized to determine the appropriate rate up to this limit. When applying the de minimis rate, costs must be consistently charged as either direct or indirect costs and may not be double charged or inconsistently charged as both. The de minimis rate does not require documentation to justify its use and may be used indefinitely. Once elected, the recipient or subrecipient must use the de minimis rate for all Federal awards until the recipient or subrecipient chooses to receive a negotiated rate. Per 2 CFR 200.1, modified total direct cost (MTDC) means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $50,000 of each subaward (regardless of the period of performance of the subawards under the award). MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs, and the portion of each subaward in excess of $50,000. Other items may only be excluded when necessary to avoid a serious inequity in the distribution of indirect costs and with the approval of the cognizant agency for indirect costs. TxGMS follow this same guidance. Condition: The Center did not exclude charges for patient care when calculating modified total direct costs (MTDC). Cause: Due to the Center improperly calculating modified total direct costs (MTDC), an indirect rate other than the 10% de minimis indirect cost rate elected by the Center and allowed under the Uniform Guidance and TxGMS was being charged to and reimbursed by the federal and state grants. Effect: Insufficient procedures and internal controls over cash management resulted in noncompliance. Questioned Costs: Mental Health Block Grant – Total known questioned costs due to error in calculating MTDC amounted to $5,139. Projected or likely questioned costs as a result of the error are approximately $39,283. Healthy Community Collaboratives - Total known questioned costs due to error in calculating MTDC amounted to $26,426. Projected or likely questioned costs as a result of the error are approximately $88,200. Context/Sampling: Mental Health Block Grant – A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $843,000 of reimbursements out of total reimbursements of approximately $5,850,000. Healthy Community Collaboratives - A nonstatistical sample of 3 out of 12 reimbursement requests for the fiscal year were selected for cash management testing. For the 3 reimbursements selected, we tested approximately $949,000 of reimbursements out of total reimbursements of approximately $2,750,000. Repeat Finding from Prior Years: No. Recommendation: We recommend that the Center establish and adhere to policies and procedures, including internal controls, to ensure compliance with cash management requirements as established by 2 CFR 200.414 and 2 CFR 200.1 and TxGMS. Views of Responsible Officials: Management agrees with the finding.