Audit 377335

2025-001 Improve Internal Controls Over Matching Federal Program(s) Information Federal Agency: U.S. Department of Health and Human Services Cluster/Program: Aging Cluster Assistance Listing Number: 93.043, 93.044, 93.053 Award Year: 2025 Compliance Requirement: Matching Type of Finding Internal Control over Compliance – Significant Deficiency Criteria or Specific Requirement Per 45 CFR 1321.9(c)(2)(ii), recipients are required to contribute a nonfederal match toward allowable program costs. Match requirements for direct service providers are determined by the State and/or area agency. Per 2 CFR § 200.303, recipients must establish and maintain effective internal controls over federal awards to ensure compliance with applicable requirements. Condition and Context During our audit, we noted that the Organization does not have formal internal controls or documented procedures in place to ensure that the nonfederal match requirement for Aging Cluster programs is adequately monitored and met throughout the fiscal year. Additionally, management was not aware of the specific nonfederal match requirement applicable to the program. Although the Organization provided sufficient nonfederal matching funds for fiscal year 2025, the lack of awareness regarding the required match and the absence of controls represent a significant deficiency in the internal control system over compliance for the matching requirement. Cause Management did not develop or implement written policies and control activities specifically designed to track, review, and verify the matching requirement for Aging Cluster programs. Effect of Potential Effect The absence of controls increases the risk that the required nonfederal match may not be met in future periods, which could result in noncompliance with program requirements. Recommendation We recommend that the Organization establish and implement formal policies and control activities to ensure that the nonfederal match for Aging Cluster programs is adequately tracked, reviewed, and documented on an ongoing basis. This should include periodic reconciliation and management review to ensure compliance with matching requirements. Views of Responsible Official Management’s corrective action plan is included at the end of this report after the Schedule of Prior Year Findings.