Finding 2024-001 – Reporting
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.512, “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier).”
Condition: The Organization did not submit its audit, data collection form, and reporting package within the required period as stated in the Criteria section.
Context: The single audit for fiscal year 2023 was not submitted within the required timeframe.
Cause: The Organization did not have controls in place to ensure it was complying with federal requirements.
Effect: As a result of not properly identifying the reporting requirements to file its audit, the Organization did not complete its reporting in a timely manner. Failure to file timely audits will result in the Organization not meeting the criteria to be a low-risk auditee.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization submit the required information as stated in the Criteria section for the single audit for fiscal year 2024 by the required deadline as stated in the Criteria section.
Management’s Response: See Corrective Action Plan.
Finding 2024-002 – Allowable Costs / Principles & Activities Allowed or Unallowed
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.430(g)(1)(i) & (ii), “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and be incorporated into the official records of the recipient or subrecipient.”
Condition: During our testing of allowable costs and activities, it was determined that the Company’s internal controls over salaries and wages were not sufficient. Although the Organization maintained copies of employees’ original hiring documents, pay raises that were subsequent to the original hiring, and the related approvals, were not documented or maintained. Additionally, we noted that there is not a formal process to review employee timesheets or the payroll submission process as a whole.
Context: There were 40 instances of employees’ salaries and wages tested. The sample consisted of six employees tested for seven pay periods, with one employee tested for five pay periods. For each instance tested, the deficiency in internal controls around payroll costs, as described in the Condition section, applied.
Cause: The Organization did not maintain documentation of employee pay raises or the necessary approvals for those pay raises. The Organization’s internal control process around payroll costs does not include review of employee timesheets to ensure that reported time is reasonable and accurate.
Effect: Lack of internal controls surrounding payroll costs could potentially lead to improper allocation of payroll costs to the Federal grant.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization improve it’s internal control processes surrounding payroll costs. Specifically, documenting the approval of pay raises and maintaining that documentation as well as documenting the review and approval of employee timesheets and processing payroll for each pay run.
Management’s Response: See Corrective Action Plan.
Finding 2024-001 – Reporting
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.512, “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier).”
Condition: The Organization did not submit its audit, data collection form, and reporting package within the required period as stated in the Criteria section.
Context: The single audit for fiscal year 2023 was not submitted within the required timeframe.
Cause: The Organization did not have controls in place to ensure it was complying with federal requirements.
Effect: As a result of not properly identifying the reporting requirements to file its audit, the Organization did not complete its reporting in a timely manner. Failure to file timely audits will result in the Organization not meeting the criteria to be a low-risk auditee.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization submit the required information as stated in the Criteria section for the single audit for fiscal year 2024 by the required deadline as stated in the Criteria section.
Management’s Response: See Corrective Action Plan.
Finding 2024-002 – Allowable Costs / Principles & Activities Allowed or Unallowed
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.430(g)(1)(i) & (ii), “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and be incorporated into the official records of the recipient or subrecipient.”
Condition: During our testing of allowable costs and activities, it was determined that the Company’s internal controls over salaries and wages were not sufficient. Although the Organization maintained copies of employees’ original hiring documents, pay raises that were subsequent to the original hiring, and the related approvals, were not documented or maintained. Additionally, we noted that there is not a formal process to review employee timesheets or the payroll submission process as a whole.
Context: There were 40 instances of employees’ salaries and wages tested. The sample consisted of six employees tested for seven pay periods, with one employee tested for five pay periods. For each instance tested, the deficiency in internal controls around payroll costs, as described in the Condition section, applied.
Cause: The Organization did not maintain documentation of employee pay raises or the necessary approvals for those pay raises. The Organization’s internal control process around payroll costs does not include review of employee timesheets to ensure that reported time is reasonable and accurate.
Effect: Lack of internal controls surrounding payroll costs could potentially lead to improper allocation of payroll costs to the Federal grant.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization improve it’s internal control processes surrounding payroll costs. Specifically, documenting the approval of pay raises and maintaining that documentation as well as documenting the review and approval of employee timesheets and processing payroll for each pay run.
Management’s Response: See Corrective Action Plan.
Finding 2024-001 – Reporting
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.512, “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier).”
Condition: The Organization did not submit its audit, data collection form, and reporting package within the required period as stated in the Criteria section.
Context: The single audit for fiscal year 2023 was not submitted within the required timeframe.
Cause: The Organization did not have controls in place to ensure it was complying with federal requirements.
Effect: As a result of not properly identifying the reporting requirements to file its audit, the Organization did not complete its reporting in a timely manner. Failure to file timely audits will result in the Organization not meeting the criteria to be a low-risk auditee.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization submit the required information as stated in the Criteria section for the single audit for fiscal year 2024 by the required deadline as stated in the Criteria section.
Management’s Response: See Corrective Action Plan.
Finding 2024-002 – Allowable Costs / Principles & Activities Allowed or Unallowed
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.430(g)(1)(i) & (ii), “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and be incorporated into the official records of the recipient or subrecipient.”
Condition: During our testing of allowable costs and activities, it was determined that the Company’s internal controls over salaries and wages were not sufficient. Although the Organization maintained copies of employees’ original hiring documents, pay raises that were subsequent to the original hiring, and the related approvals, were not documented or maintained. Additionally, we noted that there is not a formal process to review employee timesheets or the payroll submission process as a whole.
Context: There were 40 instances of employees’ salaries and wages tested. The sample consisted of six employees tested for seven pay periods, with one employee tested for five pay periods. For each instance tested, the deficiency in internal controls around payroll costs, as described in the Condition section, applied.
Cause: The Organization did not maintain documentation of employee pay raises or the necessary approvals for those pay raises. The Organization’s internal control process around payroll costs does not include review of employee timesheets to ensure that reported time is reasonable and accurate.
Effect: Lack of internal controls surrounding payroll costs could potentially lead to improper allocation of payroll costs to the Federal grant.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization improve it’s internal control processes surrounding payroll costs. Specifically, documenting the approval of pay raises and maintaining that documentation as well as documenting the review and approval of employee timesheets and processing payroll for each pay run.
Management’s Response: See Corrective Action Plan.
Finding 2024-001 – Reporting
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.512, “The audit, the data collection form, and the reporting package must be submitted within 30 calendar days after the auditee receives the auditor’s report or nine months after the end of the audit period (whichever is earlier).”
Condition: The Organization did not submit its audit, data collection form, and reporting package within the required period as stated in the Criteria section.
Context: The single audit for fiscal year 2023 was not submitted within the required timeframe.
Cause: The Organization did not have controls in place to ensure it was complying with federal requirements.
Effect: As a result of not properly identifying the reporting requirements to file its audit, the Organization did not complete its reporting in a timely manner. Failure to file timely audits will result in the Organization not meeting the criteria to be a low-risk auditee.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization submit the required information as stated in the Criteria section for the single audit for fiscal year 2024 by the required deadline as stated in the Criteria section.
Management’s Response: See Corrective Action Plan.
Finding 2024-002 – Allowable Costs / Principles & Activities Allowed or Unallowed
Federal Agency: U.S. Department of Health and Human Services
Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services
AL Number: 93.959
Award Number: 24-05-128 & 6B08TI085827-01M002
Award Year: 2024
Type of Finding: Significant Deficiency in Internal Control over Compliance and Noncompliance
Criteria: Per 2 CFR 200.430(g)(1)(i) & (ii), “Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: Be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and be incorporated into the official records of the recipient or subrecipient.”
Condition: During our testing of allowable costs and activities, it was determined that the Company’s internal controls over salaries and wages were not sufficient. Although the Organization maintained copies of employees’ original hiring documents, pay raises that were subsequent to the original hiring, and the related approvals, were not documented or maintained. Additionally, we noted that there is not a formal process to review employee timesheets or the payroll submission process as a whole.
Context: There were 40 instances of employees’ salaries and wages tested. The sample consisted of six employees tested for seven pay periods, with one employee tested for five pay periods. For each instance tested, the deficiency in internal controls around payroll costs, as described in the Condition section, applied.
Cause: The Organization did not maintain documentation of employee pay raises or the necessary approvals for those pay raises. The Organization’s internal control process around payroll costs does not include review of employee timesheets to ensure that reported time is reasonable and accurate.
Effect: Lack of internal controls surrounding payroll costs could potentially lead to improper allocation of payroll costs to the Federal grant.
Repeat finding: Not applicable.
Recommendation: We recommend the Organization improve it’s internal control processes surrounding payroll costs. Specifically, documenting the approval of pay raises and maintaining that documentation as well as documenting the review and approval of employee timesheets and processing payroll for each pay run.
Management’s Response: See Corrective Action Plan.