Audit 374435

Finding 2023-002 – Internal Control over Compliance (Material Weakness) Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: 93.959 Federal Award Identification Number: 43CAZ03215 Award Period: January 1, 2023 – December 31, 2023 Type of Finding: Material Weakness in internal control over compliance Criteria: The cost principles in 2 CFR Part 200, subpart E (Cost Principles) prescribe requirements for allowable costs relative to compensation and substantiation requirements specifically, 2 CFR Part 200.430(i) states “Cost must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated.” Condition: Employee change of status forms are not consistently maintained in accordance with applicable requirements. Questioned Costs: None. Context: 10 Employee files that were selected for verification disclosed 3 instances where forms were not available for review. Cause: Employee change of status forms or offer letters were not maintained on file or available for review. Effect: Inability to review employee change of status forms or offer letters limits the ability to verify costs allowability as required. As a result of the missing forms, it is not possible to fully ascertain compliance with allowable costs as required by 2 CFR 200.430. Repeat Finding: Yes Recommendation: Offer letters or employee change of status forms should be maintained on file. We recommend management implement a second layer of review of personnel files. Views of Responsible Official: Since the hiring of the Executive Director in March of 2023, we have implemented the following: Created A Human Resources Department, which did not exist at CRA before 2023. Hired a Human Resources Director to oversee department. Initiated a comprehensive HR information system where staff can review their pay, track their time, and review benefits. Initiated the process of uploading personnel information to our new system, while keeping backups secured. This includes hiring documentation and change of status forms for employees.