Audit 376282

Federal Program: Assistance Listing Number 93.959 Block Grants for Prevention and Treatment of Substance Abuse Passed through Iowa Department of Human Services Compliance Requirement: Eligibility Criteria: The Organization is responsible for maintaining internal controls over the major federal program, including the monitoring of eligibility requirements. Per the terms and conditions of the Iowa Department of Human Services IPN Grant (Block Grant) and applicable federal regulations, certain services provided to incarcerated individuals are not eligible for reimbursement. Condition: Our testing for eligibility consisted of a sample of 25 individual services billed under the Block Grant. Based on that testing, 1 of 25 claims tested did not meet the eligibility requirements for the grant. Upon this discovery, management investigated and, along with the state of Iowa, determined other claims that had been filed throughout the year for services that were not eligible under the Block Grant. Cause: The Organization lacked adequate controls to verify client eligibility status prior to billing the grant. Staff responsible for the review and submission of the claims were unaware that incarceration status disqualified individuals from receiving services under this funding source. Questioned Costs: The results of this noncompliance led to $52,713 of questioned costs, which were repaid to the Iowa Department of Human Services in September 2025 after a thorough review of all ineligible services submitted by management and the Iowa Department of Human Services. Potential Effects: Ineligible services were billed to Iowa Department of Human Services by the Organization. As a result, certain audit adjustments were required to reduce revenue for the year ended June 30, 2025, by $52,713 and record a liability as of June 30, 2025, for the same amount. The noncompliance and related adjustments are not considered material to the financial statements. However, the noncompliance is material to the Organization's compliance with the major federal program. Recommendation: We recommend the Organization implement procedures to train applicable staff members on federal eligibility requirements. Responsible Official's Response: Management agrees with the finding and the recommendation.