Finding 2023-004 – PROCUREMENT
Type: Material Weakness in Internal Control/Noncompliance.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.320, when a procurement transaction under a Federal award exceeds the simplified acquisition threshold, formal procurement methods are required. Pursuant to 2 CFR 200.214 and 2 CFR part 180, prior to entering into a covered transaction, a nonfederal entity must verify that the person with whom they intend to do business is not suspended, debarred, or otherwise excluded or disqualified.”
Condition: The CMHSP did not follow the formal procurement methods outlined in 2 CFR 200.320 prior to entering into contracts for services under the grant. Also, the CMHSP did not verify that the vendors were not suspended, debarred, or otherwise excluded or disqualified in accordance with 2 CFR requirements prior to entering into a contract for services under the grant.
Cause: This condition was caused by an insufficient internal control process for review and approval of procurements/check for suspension and debarment.
Effect: The CMHSP purchased several items that did not have the proper documentation/support of the procurement process.
Questioned Cost: $749,624
Context: Three contracts were paid from grant funds. The questioned costs shown above reflect the amount paid from grant funds for the year pursuant to those contracts. Also, upon subsequent review, it was determined that the vendor was not suspended, debarred, or otherwise excluded or disqualified.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that purchases adhere to the CMHSP’s procurement policy.
Management’s Resp: We are in agreement with this finding.
Finding 2023-005 – REPORTING
Type: Material Weakness in Internal Control/Noncompliance.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.328(c), “The recipient or subrecipient must submit financial reports as required by the Federal award.” According to the closeout requirements of the Federal award, recipients must, “Reconcile financial expenditures to the reported total disbursement and charges in PMS.”
Condition: The CMHSP did not reconcile financial expenditures shown in the Federal Financial Report to the total disbursement and charges in PMS.
Cause: This condition was caused by an insufficient internal control process for review and approval of grant reports.
Effect: Federal share of expenditures listed on the Federal Financial Report were overstated by $361,981.
Questioned Cost: None.
Context: Amounts received as Federal reimbursement, as detailed in PMS, were supported by the books and records of the CMHSP. However, the final report of expenditures was overstated by $361,981.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that reports adhere to the grant requirements.
Management’s Resp: We are in agreement with this finding.
Finding 2023-006 – CASH MANAGEMENT
Type: Significant Deficiency in Internal Control.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.303, recipients must, “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition: The CMHSP has established internal controls relating to approvals of cash requests. However, during testing, we noted that cash requests did not contain evidence of required review and approvals.
Cause: This condition was caused by an insufficient internal control process for review and approval of cash requests.
Effect: Cash requests submitted prior to review and approval are at risk of reporting incorrect information.
Questioned Cost: None.
Context: Although amounts listed in the cash requests were supported by the books and records, the requests did not contain evidence of approvals.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that cash requests are reviewed and approved prior to submission.
Management’s Resp: We are in agreement with this finding.
Finding 2023-004 – PROCUREMENT
Type: Material Weakness in Internal Control/Noncompliance.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.320, when a procurement transaction under a Federal award exceeds the simplified acquisition threshold, formal procurement methods are required. Pursuant to 2 CFR 200.214 and 2 CFR part 180, prior to entering into a covered transaction, a nonfederal entity must verify that the person with whom they intend to do business is not suspended, debarred, or otherwise excluded or disqualified.”
Condition: The CMHSP did not follow the formal procurement methods outlined in 2 CFR 200.320 prior to entering into contracts for services under the grant. Also, the CMHSP did not verify that the vendors were not suspended, debarred, or otherwise excluded or disqualified in accordance with 2 CFR requirements prior to entering into a contract for services under the grant.
Cause: This condition was caused by an insufficient internal control process for review and approval of procurements/check for suspension and debarment.
Effect: The CMHSP purchased several items that did not have the proper documentation/support of the procurement process.
Questioned Cost: $749,624
Context: Three contracts were paid from grant funds. The questioned costs shown above reflect the amount paid from grant funds for the year pursuant to those contracts. Also, upon subsequent review, it was determined that the vendor was not suspended, debarred, or otherwise excluded or disqualified.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that purchases adhere to the CMHSP’s procurement policy.
Management’s Resp: We are in agreement with this finding.
Finding 2023-005 – REPORTING
Type: Material Weakness in Internal Control/Noncompliance.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.328(c), “The recipient or subrecipient must submit financial reports as required by the Federal award.” According to the closeout requirements of the Federal award, recipients must, “Reconcile financial expenditures to the reported total disbursement and charges in PMS.”
Condition: The CMHSP did not reconcile financial expenditures shown in the Federal Financial Report to the total disbursement and charges in PMS.
Cause: This condition was caused by an insufficient internal control process for review and approval of grant reports.
Effect: Federal share of expenditures listed on the Federal Financial Report were overstated by $361,981.
Questioned Cost: None.
Context: Amounts received as Federal reimbursement, as detailed in PMS, were supported by the books and records of the CMHSP. However, the final report of expenditures was overstated by $361,981.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that reports adhere to the grant requirements.
Management’s Resp: We are in agreement with this finding.
Finding 2023-006 – CASH MANAGEMENT
Type: Significant Deficiency in Internal Control.
Program: ALN 93.493 Congressional Directives
Criteria: Pursuant to 2 CFR 200.303, recipients must, “Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition: The CMHSP has established internal controls relating to approvals of cash requests. However, during testing, we noted that cash requests did not contain evidence of required review and approvals.
Cause: This condition was caused by an insufficient internal control process for review and approval of cash requests.
Effect: Cash requests submitted prior to review and approval are at risk of reporting incorrect information.
Questioned Cost: None.
Context: Although amounts listed in the cash requests were supported by the books and records, the requests did not contain evidence of approvals.
Recommendation: We recommend that the CMHSP review their internal controls and make necessary changes to ensure that cash requests are reviewed and approved prior to submission.
Management’s Resp: We are in agreement with this finding.