Finding 2022-001: Missing Supporting Documentation (Expenses) Criteria or Specific Requirement: Title 2 CFR 200 Section 200.333 establishes requirements of retention of financial records, supporting documents, statistical records and all other non-Federal entity records as it relates to Federal awards. Although our exceptions did not disclose exceptions to Federal award documentation specifically, UHU is required to maintain a system of internal controls to comply with its own record retention policy for non-Federal activity. Condition: During the current year audit, we had significant difficulty in obtaining supporting documentation around general expenditures, particularly vendor invoices and contracts. Although our testwork did not disclose exceptions to Federal award documentation specifically, UHU is required to maintain a system of internal controls to comply with its own record retention policy for non-Federal activity. Context: Our audit procedures consisted of control testwork over UHU's cash disbursement cycle as well as substantive testing of Federal expenditures. Cause: UHU did not maintain proper systems to ensure proper filing and maintenance of documentation supporting various expenditures. Effect or Potential Effect: We were unable to verify certain expenditures recorded in the general ledger, verify payee of the funds, verify terms or contract, or confirm each amount in question for certain transactions. Question Cost: Undetermined Identification as a Repeat Finding, if Applicable: Repeat of Finding 2021-001 Recommendation: We recommend UHU implement a filing system in which all supporting documentation is filed and maintained so that it can be easily accessed for future reference.
Finding 2022-002: Missing Supporting Documentation (Receipts) Criteria or Specific Requirement: Title 2 CFR 200 Section 200.333 establishes requirements of retention of financial records, supporting documents, statistical records and all other non-Federal entity records as it relates to Federal awards. Condition: During our audit, we noted several instances where backup documentation supporting certain cash receipts were not available for inspection. Although our testwork did not disclose exceptions to Federal award documentation specifically, UHU is required to maintain a system of internal controls to comply with its own record retention policy for non-Federal activity. Context: Our audit procedures consisted of substantive testwork over UHU's revenue cycle. Cause: UHU did not maintain proper systems to ensure proper filing and maintenance of documentation supporting various receipts. Effect or Potential Effect: We were unable to determine the type of income received, verify any donor mandated restrictions, or confirm the source (payer/donor) of each amount in question for certain transactions. Question Cost: Indeterminable Identification as a Repeat Finding, if Applicable: Repeat of Finding 2021-002 Recommendation: We recommend UHU implement a filing system in which all supporting documentation is filed and maintain so that it can be easily accessed for future reference.
Finding 2022-003: Suspension and Debarment Criteria or Specific Requirement: Title 2, subtitle A, chapter II, Part 200, subpart c, Section 200.214 – Suspension and debarment. Recipients of Federal funding must adhere to specific requirements on screening of all potential and current vendors, suppliers, contractors, subrecipients, employees, fellows, etc. to ensure the recipient is not conducting business with excluded parties (as defined by the United States Government). This screening process must also be documented in writing. Condition: UHU did not consistently perform the screening process for its potential and current vendors, suppliers, contractors, subrecipients, employees, etc. that were paid with Federal funds. Context: Payments were made during the fiscal year without performing the proper screening process. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. The issue is deemed to be systemic. Cause: UHU did not have a formal policy in place with regard to suspension and debarment screenings, although they did occasionally perform screening of potential and current vendors, suppliers, contractors, subrecipients, and employees. Effect or Potential Effect: Failure to screen potential and current vendors, suppliers, contractors, subrecipients, employees, fellows, etc. increases the potential that Federal funds be inadvertently provided to parties deemed to be suspended or disbarred by the United States Government. Questioned Costs: Undetermined. Identification of Repeat Finding: 2021-003Recommendation: We recommend UHU establish policies and ensure that all types of parties (as noted above) are included, and educate its employees on the procedures necessary to ensure full compliance with this requirement. We also recommend that UHU document each of these screenings and retain them in the respective files, which should be completed prior to engaging in relationships with these parties. For ongoing relationships, UHU should consider performing screenings on an annual basis (and documenting them) to ensure continuous compliance in the event the suspension and debarment status of any of these parties changes. Lastly, we recommend UHU perform retrospective screenings on these parties to which it made payments during the fiscal year.
Finding 2022-004: Procurement Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 318 “General procurement standards” states that the non-Federal entity must use its own documented procurement procedures which reflect applicable State, local, and tribal laws and regulations, provided that the procurements conform to applicable Federal law and the standards. Furthermore, paragraph 319 “Competition” states that all procurement transactions must be conducted in a manner providing full and open competition consistent with these standards. Condition: During our audit, we experienced difficulty in obtaining complete procurement documentation for certain transactions selected for testing. Our audit revealed instances in which procurement documentation was either not completed or lacked a documented justification regarding a sole source vendor. Context: UHU does not have a documented procurement policy, and is not in noncompliance with Federal standards. Our audit work in this area consisted of internal control testwork over a random sample of expenditures, as well as substantive testwork over transactions above a defined threshold from select expense accounts that were charged to the Federal program. The issue is considered systemic in nature. Cause: UHU does not have a documented policy. Effect or Potential Effect: Purchases of goods and services could be made above the prevailing market rates if the prescribed procurement procedures are not adhered to, and thus, there lies the potential that UHU will not receive the best value for its purchases. The procurement process should also allow for an evaluation of potential conflicts of interest with prospective vendors and contractors. Furthermore, failure to perform the proper procurement procedures could result in disallowance of Federal expenditures based on lack of fair competition. Questioned Costs: Undetermined Identification as a Repeat Finding, if Applicable: Repeat of Finding 2021-004 Recommendation: We recommend that UHU develop internal policies and procedures as it relates to procurement. Additionally, we recommend UHU’s current procurement thresholds (and methods used for the competitive bidding) ensure compliance with those thresholds and requirements set forth under Uniform Guidance, CFR §200 subpart D.
Finding 2022-005: Timesheets Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200, paragraph 430 “Compensation – personal services” requires that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, and that these records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Additionally, these records must comply with established accounting policies and practices of the non-Federal entity. Condition: Payroll is allocated based on budget. We noted that payroll transactions lacked a timesheet showing programs worked on during the period or other evidence of proper record-keeping to support the program allocations of salaries and related expenses in the general ledger. Context: UHU failed to keep adequate time records to support the amounts charged to the general ledger. Allocation was based on award budget and UHU did not track time using timesheets to reallocate time each month. Our audit work in this area consisted of internal control testwork over a random sample of expenditures. The issue is considered systemic in nature. Cause: UHU’s current policies do not require employees to complete timesheets for each pay period. Payroll is allocated based on budget. Effect or Potential Effect: UHU could inadvertently mischarge salaries and wages to its various programs.Questioned Costs: Undetermined. Identification as a Repeat Finding: 2021-005 Recommendation: We recommend that management enforce its current payroll policies, ensure each employee completes a timesheet that pertains to each payroll period and which documents the allocation of time worked on departments, projects and affiliates (per the policy). Furthermore, the finance department should prepare and maintain a reconciliation between the program allocations (as documented in the approved timesheets) and the general ledger in order to ensure a full and accurate audit trail of payroll expenditures.
Finding 2022-006: Financial Reports Criteria or Specific Requirement: 2 CFR §200.512 requires that the completed audit, data collection form, and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. Condition: UHU has been behind on the audit process and submission of reports has been delayed. Context: Due to delays in prior year audits, UHU was unable to submit the required reports by the required deadline. Cause: UHU did not have controls in place to ensure timely submission of their reports. Additionally, the information used to compile the financial data during the period for reporting was not reconciled timely to ensure appropriate reporting of the actual activity. Effect or Potential Effect: UHU was not in compliance with this regulation. Questioned Costs: None noted. Identification as a Repeat Finding, if Applicable: Repeat of Finding 2021-006 Recommendation: We recommend that UHU ensure that these reports are submitted within the required time period.
Finding 2022-007: Eligibility Criteria or Specific Requirement: The U.S Department of Health and Human Services requires certain requirements for participants to be eligible to participate in the program. Condition: We were unable to verify eligibility of some of the participants selected for testwork. Context: UHU was unable to provide documentation that participants met certain eligibility requirements specified under the program. Cause: UHU did not have a proper storage and filing system in place for documents. Effect or Potential Effect: UHU was not in compliance with this regulation. Questioned Costs: Indeterminable. Identification as a Repeat Finding: 2021-007 Recommendation: We recommend that UHU develops internal policies and procedures as it relates to eligibility. UHU needs to acquire and maintain the eligibility documents so they are easily accessible to ensure compliance with requirements sent forth under Uniform Guidance, CFR §200 subpart D.