U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services – 1H79SM088927-01
Cash Management
Significant Deficiency in Internal Control over Compliance
Criteria The OMB Compliance Supplement requires that non-federal entities receiving federal
awards establish and maintain internal controls designed to reasonably ensure
compliance with federal laws, regulations, and program compliance requirements.
Condition During our testing of reimbursement requests, there was no documentation available
for the review and approval procedures performed.
Cause The Organization did not have an adequate internal control policy to require the
documentation of the reimbursement requests’ review and approval.
Effect Inaccurate reimbursement requests may be prepared, which could lead to amounts
received or reported in error.
Questioned Costs None.
Context/Sampling There was a total of two reimbursement requests prepared for the year ended June 30,
2024 all of which were selected for testing. None of the reimbursement requests
contained documentation of the request being reviewed or approved.
Repeat Finding from Prior Year(s) Yes
Recommendation We recommend the Organization enhance internal control policies to require
documentation of the review and approval procedures performed in the preparation
and review of reimbursement requests and reports.
Views of Responsible Individuals Management agrees with the finding.
U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services - 1H79SM088927-01
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of
Performance
Material Weakness in Internal Control over Compliance
Criteria The OMB Compliance Supplement requires that non-federal entities receiving federal
awards establish and maintain internal controls designed to reasonably ensure
compliance with federal laws, regulations, and program compliance requirements.
Condition During our testing, some payroll expenditures were not fully supported by underlying
payroll information. In addition, there was no documentation of review and approval of
expenditures allocation to the federal program.
Cause The Organization did not have an adequate internal control policy to ensure review and
approval of expenditures and the allocation of expenditures to the federal program was
documented.
Effect The lack of adequate policies governing the recording of expenditures to the program
increases the risk that employees participating in the federal award administration may
not be able to detect and correct noncompliance in a timely manner.
Questioned Costs None reported.
Context/Sampling A nonstatistical sample of 21 direct expenditures and 2 indirect expenditures submitted
for reimbursement were selected for testing. Of these 23, 5 were not fully supported by
underlying payroll information and none showed evidence of proper review and
approval prior to being allocated to the federal program.
Repeat Finding from Prior Year(s) No
Recommendation We recommend that the Organization enhance internal control policies to ensure all
expenditures are reviewed and approved prior to payment to ensure that all payments
are necessary for the program and correct.
Views of Responsible Individuals Management agrees with the finding.
U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services - 1H79SM088927-01
Procurement and Suspension and Debarment
Material Weakness in Internal Control over Compliance and Noncompliance
Criteria The Uniform Guidance, Section 200.303 Internal Controls, requires the non-federal
entity must establish and maintain effective internal controls over federal awards that
provide reasonable assurance that awards are being managed in compliance with
federal statutes, regulations and the terms and conditions of the federal award.
The non-Federal entity must have and use documented procurement procedures,
consistent with State, local, and tribal laws and regulations and the standards of this
section, for the acquisition of property or services required under a Federal award or
subaward. The non- Federal entity's documented procurement procedures must
conform to the procurement standards identified in §§ 200.318 through 200.327.
Condition The Organization did not have a written procurement policy that was consistent with
Federal, State, local, and tribal laws and regulations. In addition, the Organization
entered into a contract with a vendor for services without obtaining quotes from other
vendors.
Cause There is a lack of controls over the written procurement, suspension and debarment
policy and over procurement, suspension and debarment as a whole.
Effect Failure to maintain a written procurement policy that was consistent with Federal,
State, local, and tribal laws and regulations may result in disallowed costs.
Questioned Costs $37,000 was paid during fiscal year 2024 to a vendor without obtaining quotes.
Context/Sampling EB reviewed the procurement, suspension and debarment policy. A nonstatistical
sample of 3 vendors were selected for testing. Of these 3, 1 did not follow appropriate
procurement, suspension and debarment procedures.
Repeat Finding from Prior Year(s) Yes
Recommendation We recommend that management implement a written procurement, suspension and
debarment policy that meets Federal, State, local, and tribal laws and regulations. We
recommend that management review this policy regularly to confirm that it meets the
requirements. We also recommend that management review this policy prior to
entering into any contracts with vendors.
Views of Responsible Individuals Management agrees with the finding.
U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services – 1H79SM088927-01
Cash Management
Significant Deficiency in Internal Control over Compliance
Criteria The OMB Compliance Supplement requires that non-federal entities receiving federal
awards establish and maintain internal controls designed to reasonably ensure
compliance with federal laws, regulations, and program compliance requirements.
Condition During our testing of reimbursement requests, there was no documentation available
for the review and approval procedures performed.
Cause The Organization did not have an adequate internal control policy to require the
documentation of the reimbursement requests’ review and approval.
Effect Inaccurate reimbursement requests may be prepared, which could lead to amounts
received or reported in error.
Questioned Costs None.
Context/Sampling There was a total of two reimbursement requests prepared for the year ended June 30,
2024 all of which were selected for testing. None of the reimbursement requests
contained documentation of the request being reviewed or approved.
Repeat Finding from Prior Year(s) Yes
Recommendation We recommend the Organization enhance internal control policies to require
documentation of the review and approval procedures performed in the preparation
and review of reimbursement requests and reports.
Views of Responsible Individuals Management agrees with the finding.
U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services - 1H79SM088927-01
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of
Performance
Material Weakness in Internal Control over Compliance
Criteria The OMB Compliance Supplement requires that non-federal entities receiving federal
awards establish and maintain internal controls designed to reasonably ensure
compliance with federal laws, regulations, and program compliance requirements.
Condition During our testing, some payroll expenditures were not fully supported by underlying
payroll information. In addition, there was no documentation of review and approval of
expenditures allocation to the federal program.
Cause The Organization did not have an adequate internal control policy to ensure review and
approval of expenditures and the allocation of expenditures to the federal program was
documented.
Effect The lack of adequate policies governing the recording of expenditures to the program
increases the risk that employees participating in the federal award administration may
not be able to detect and correct noncompliance in a timely manner.
Questioned Costs None reported.
Context/Sampling A nonstatistical sample of 21 direct expenditures and 2 indirect expenditures submitted
for reimbursement were selected for testing. Of these 23, 5 were not fully supported by
underlying payroll information and none showed evidence of proper review and
approval prior to being allocated to the federal program.
Repeat Finding from Prior Year(s) No
Recommendation We recommend that the Organization enhance internal control policies to ensure all
expenditures are reviewed and approved prior to payment to ensure that all payments
are necessary for the program and correct.
Views of Responsible Individuals Management agrees with the finding.
U.S. Department of Health and Human Services
Federal Financial Assistance Listing Number 93.829 Section 223 Demonstration
Programs to Improve Community Mental Health Services - 1H79SM088927-01
Procurement and Suspension and Debarment
Material Weakness in Internal Control over Compliance and Noncompliance
Criteria The Uniform Guidance, Section 200.303 Internal Controls, requires the non-federal
entity must establish and maintain effective internal controls over federal awards that
provide reasonable assurance that awards are being managed in compliance with
federal statutes, regulations and the terms and conditions of the federal award.
The non-Federal entity must have and use documented procurement procedures,
consistent with State, local, and tribal laws and regulations and the standards of this
section, for the acquisition of property or services required under a Federal award or
subaward. The non- Federal entity's documented procurement procedures must
conform to the procurement standards identified in §§ 200.318 through 200.327.
Condition The Organization did not have a written procurement policy that was consistent with
Federal, State, local, and tribal laws and regulations. In addition, the Organization
entered into a contract with a vendor for services without obtaining quotes from other
vendors.
Cause There is a lack of controls over the written procurement, suspension and debarment
policy and over procurement, suspension and debarment as a whole.
Effect Failure to maintain a written procurement policy that was consistent with Federal,
State, local, and tribal laws and regulations may result in disallowed costs.
Questioned Costs $37,000 was paid during fiscal year 2024 to a vendor without obtaining quotes.
Context/Sampling EB reviewed the procurement, suspension and debarment policy. A nonstatistical
sample of 3 vendors were selected for testing. Of these 3, 1 did not follow appropriate
procurement, suspension and debarment procedures.
Repeat Finding from Prior Year(s) Yes
Recommendation We recommend that management implement a written procurement, suspension and
debarment policy that meets Federal, State, local, and tribal laws and regulations. We
recommend that management review this policy regularly to confirm that it meets the
requirements. We also recommend that management review this policy prior to
entering into any contracts with vendors.
Views of Responsible Individuals Management agrees with the finding.