Finding Reference: 2024-001 – A. Activities Allowed or Unallowed; B. Allowable Costs/Cost Principles
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Review and Approval of Purchase Orders
Type of Finding: Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Condition
The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the purchase orders that were included in the Behavioral Health System Baltimore, Inc. (BHSB) submissions.
Cause
The Corporation did not obtain sufficient evidence of the review and approval of purchase orders reported to BHSB in the required submissions.
Effect or potential effect
The expenditures included in the BHSB submissions could be unallowed costs.
Questioned costs
None.
Identification of a repeat finding
No. This is not a repeat finding.
Context
In order to evidence review and approval of individual expenditures, management reviews and approves expenditures as part of the purchasing and payables business process, specifically the review and approval purchase orders.
In conjunction with our testing related to the submissions and allowability, we selected a sample of expenditures to test management’s review and approval of expenditures as part of the purchasing and payables business process. In accordance with the Corporation’s purchasing and payables business process, vendor specific purchase orders must be reviewed and approved prior to the payment of the invoices. There were six purchase orders totaling $18,052, or approximately 5% of our population, that did not have approval. These purchase orders were isolated to one vendor for purchases that is set up under the Corporation’s group purchasing process, which did not always require a segregation between the requisitioner and approver during the grant period. The purchases from our testing that did not have an approval, all occurred subsequent to March 2024, which is when the employee turnover occurred, and a new approver was not designated yet. As a result, the respective orders did not route for approval as the purchase order was submitted by the previous approver. Based on review of the purchase order and invoice for the sample selected, no expenditures were identified as unallowable based on the terms and conditions of the grant agreement and federal program.
Recommendation
Management should obtain documentation that evidences the review and approval of expenditures submitted to BHSB.
View of responsible officials
There is no disagreement with the audit finding.
Finding Reference: 2024-002 – C. Cash Management; L. Reporting
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Evidence of Review and Approval of the Reported Expenditures and Timely Report Submission
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
The major program includes two sub-vendor contracts between the granting agency, BHSB and the University of Maryland Medical Center (UMMC) for the OUD MEETS Medical Patient Engagement – OTP and OUD MEETS Medical Patient Engagement – Hospital programs. In accordance with both subaward contract terms within Section 2, Financial Reporting and Payment for Services, “invoices are due by the 15th day of the month following the invoice period.”
Condition
The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the expenditures that were included in the BHSB submissions and timeliness of the submissions.
Cause
The Corporation did not retain sufficient evidence of the review and approval of the expenditures reported to BHSB in the required submissions nor were all submissions made with the required 15-day period.
Effect or potential effect
The expenditures included in the BHSB submissions could be inaccurate or information reported may be incomplete or untimely.
Questioned costs
None.
Identification of a repeat finding
No. This is not a repeat finding.
Context
On a monthly basis, the expenditures are compiled and reconciled to the cash reimbursement request and internal tracking spreadsheet. The Corporation submitted a total of 24 BHSB cash reimbursement submissions for the subawards. The total payments received by the Corporation was $352,026.
During the last quarter of the grant period, there were changes in employee responsibilities due to employee turnover. Specific to the last quarter of the grant period, for the related monthly BHSB cash reimbursement submissions and the 440 annual financial report submissions, management did not retain documentation to evidence review and approval of the expenditures requested for cash reimbursement. The total expenditures submitted for reimbursement were $111,705 or approximately 32% for the last quarter of the grant period. As part of our testing, we selected 10 out of the 24 BHSB cash reimbursement submissions throughout the grant period, and 9 out of the 10 submissions were not submitted timely. We agreed the ten samples to supporting underlying documentation for each of these selections totaling $215,208. Three of the ten selections totaling $78,336, were within the last quarter. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure.
Recommendation
Management should reassess the design of its controls to ensure submissions to BHSB are made timely within the required 15-day period and that documentation is retained that evidences the review and approval of expenditures submitted to BHSB for reimbursement.
View of responsible officials
There is no disagreement with the audit finding.
Finding Reference: 2024-003 – H. Period of Performance
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Timely Payment of Financial Obligations
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.344(c), Closeout, “The recipient must submit, no later than 120 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.”
Condition
Management’s monitoring control over compliance with applicable period of performance requirements and timely payment of the reported expenditures following their reimbursement from BHSB was not designed appropriately to ensure all expenditures were paid within the specific period of performance.
Cause
The Corporation did not process payments to one vendor within the applicable period of performance requirement for federal award expenditures reimbursed by the BHSB.
Effect or potential effect
The expenditures included in the BHSB submissions are not in compliance with applicable period of performance requirements.
Questioned costs
$17,151 represents Federal expenditures that remained unpaid or were paid outside of the 120 days following the end date of the period of performance for the following subawards:
• 93.959: BH031 - OUD MEETS-OTP-UMMC - $ 3,589
• 93.959: BH031 - OUD MEETS-HOS-UMMC - $13,562
Identification of a repeat finding
No. This is not a repeat finding.
Context
As part of our testing, we selected 25 expenditures. We identified that four selections or $1,695 of the total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. This was isolated to one vendor that is set up under the Corporation’s group purchasing process. As part of our testing, there were $4,362 purchases tested and $36,943 total purchases related to the one vendor within the grant period. Due to complexities of group purchase billing and recording for the vendor, management further investigated and identified that $17,151 of total expenditures within the grant period or approximately 5% of total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024.
Recommendation
As the grant period has ended, we recommend that the Corporation works with the funding agency to remedy the period of performance noncompliance. In addition, we recommend that the Corporation reassess the design of its period of performance controls to identify where enhancement or additional controls are needed over liquidation of financial obligations subsequent to the end of a grant award.
View of responsible officials
There is no disagreement with the audit finding.
Finding Reference: 2024-001 – A. Activities Allowed or Unallowed; B. Allowable Costs/Cost Principles
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Review and Approval of Purchase Orders
Type of Finding: Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
Condition
The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the purchase orders that were included in the Behavioral Health System Baltimore, Inc. (BHSB) submissions.
Cause
The Corporation did not obtain sufficient evidence of the review and approval of purchase orders reported to BHSB in the required submissions.
Effect or potential effect
The expenditures included in the BHSB submissions could be unallowed costs.
Questioned costs
None.
Identification of a repeat finding
No. This is not a repeat finding.
Context
In order to evidence review and approval of individual expenditures, management reviews and approves expenditures as part of the purchasing and payables business process, specifically the review and approval purchase orders.
In conjunction with our testing related to the submissions and allowability, we selected a sample of expenditures to test management’s review and approval of expenditures as part of the purchasing and payables business process. In accordance with the Corporation’s purchasing and payables business process, vendor specific purchase orders must be reviewed and approved prior to the payment of the invoices. There were six purchase orders totaling $18,052, or approximately 5% of our population, that did not have approval. These purchase orders were isolated to one vendor for purchases that is set up under the Corporation’s group purchasing process, which did not always require a segregation between the requisitioner and approver during the grant period. The purchases from our testing that did not have an approval, all occurred subsequent to March 2024, which is when the employee turnover occurred, and a new approver was not designated yet. As a result, the respective orders did not route for approval as the purchase order was submitted by the previous approver. Based on review of the purchase order and invoice for the sample selected, no expenditures were identified as unallowable based on the terms and conditions of the grant agreement and federal program.
Recommendation
Management should obtain documentation that evidences the review and approval of expenditures submitted to BHSB.
View of responsible officials
There is no disagreement with the audit finding.
Finding Reference: 2024-002 – C. Cash Management; L. Reporting
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Evidence of Review and Approval of the Reported Expenditures and Timely Report Submission
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
The major program includes two sub-vendor contracts between the granting agency, BHSB and the University of Maryland Medical Center (UMMC) for the OUD MEETS Medical Patient Engagement – OTP and OUD MEETS Medical Patient Engagement – Hospital programs. In accordance with both subaward contract terms within Section 2, Financial Reporting and Payment for Services, “invoices are due by the 15th day of the month following the invoice period.”
Condition
The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the expenditures that were included in the BHSB submissions and timeliness of the submissions.
Cause
The Corporation did not retain sufficient evidence of the review and approval of the expenditures reported to BHSB in the required submissions nor were all submissions made with the required 15-day period.
Effect or potential effect
The expenditures included in the BHSB submissions could be inaccurate or information reported may be incomplete or untimely.
Questioned costs
None.
Identification of a repeat finding
No. This is not a repeat finding.
Context
On a monthly basis, the expenditures are compiled and reconciled to the cash reimbursement request and internal tracking spreadsheet. The Corporation submitted a total of 24 BHSB cash reimbursement submissions for the subawards. The total payments received by the Corporation was $352,026.
During the last quarter of the grant period, there were changes in employee responsibilities due to employee turnover. Specific to the last quarter of the grant period, for the related monthly BHSB cash reimbursement submissions and the 440 annual financial report submissions, management did not retain documentation to evidence review and approval of the expenditures requested for cash reimbursement. The total expenditures submitted for reimbursement were $111,705 or approximately 32% for the last quarter of the grant period. As part of our testing, we selected 10 out of the 24 BHSB cash reimbursement submissions throughout the grant period, and 9 out of the 10 submissions were not submitted timely. We agreed the ten samples to supporting underlying documentation for each of these selections totaling $215,208. Three of the ten selections totaling $78,336, were within the last quarter. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure.
Recommendation
Management should reassess the design of its controls to ensure submissions to BHSB are made timely within the required 15-day period and that documentation is retained that evidences the review and approval of expenditures submitted to BHSB for reimbursement.
View of responsible officials
There is no disagreement with the audit finding.
Finding Reference: 2024-003 – H. Period of Performance
Federal Program Information
Federal Agencies: Department of Health and Human Services
Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services
Award Periods: June 1, 2023 – June 30, 2024
Description: Timely Payment of Financial Obligations
Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance
Criteria
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”
In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.344(c), Closeout, “The recipient must submit, no later than 120 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.”
Condition
Management’s monitoring control over compliance with applicable period of performance requirements and timely payment of the reported expenditures following their reimbursement from BHSB was not designed appropriately to ensure all expenditures were paid within the specific period of performance.
Cause
The Corporation did not process payments to one vendor within the applicable period of performance requirement for federal award expenditures reimbursed by the BHSB.
Effect or potential effect
The expenditures included in the BHSB submissions are not in compliance with applicable period of performance requirements.
Questioned costs
$17,151 represents Federal expenditures that remained unpaid or were paid outside of the 120 days following the end date of the period of performance for the following subawards:
• 93.959: BH031 - OUD MEETS-OTP-UMMC - $ 3,589
• 93.959: BH031 - OUD MEETS-HOS-UMMC - $13,562
Identification of a repeat finding
No. This is not a repeat finding.
Context
As part of our testing, we selected 25 expenditures. We identified that four selections or $1,695 of the total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. This was isolated to one vendor that is set up under the Corporation’s group purchasing process. As part of our testing, there were $4,362 purchases tested and $36,943 total purchases related to the one vendor within the grant period. Due to complexities of group purchase billing and recording for the vendor, management further investigated and identified that $17,151 of total expenditures within the grant period or approximately 5% of total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024.
Recommendation
As the grant period has ended, we recommend that the Corporation works with the funding agency to remedy the period of performance noncompliance. In addition, we recommend that the Corporation reassess the design of its period of performance controls to identify where enhancement or additional controls are needed over liquidation of financial obligations subsequent to the end of a grant award.
View of responsible officials
There is no disagreement with the audit finding.