Audit 378338

Criteria and Condition: The Criteria is that allowable costs must be directly tied to the performance of eligible work, adequately documented, and necessary and reasonable to accomplish the work properly and efficiently. The eligible costs relevant to this grant are attributable to coronavirus. The Condition is that there was inadequate documentation. Context: Two expenditures out of a sample of 25 lacked elements of approval; however, evidence was provided to adequately support the receipt of the medical supplies purchased. Cause: Both expenditures were incurred in 2021 and related to a presidentially declared disaster, which often required immediate access to essential supplies. Additionally, the System operated had different financial management platforms across its subsidiaries. Effect: The effect is that absent any approval, these expenditures could be considered as not meeting the attributes of the Compliance Supplement for this Federal Award. Documentation of receipt was considered corroborating evidence for the purpose of the expenditures. Recommendation: The process of ensuring that purchase approvals are complete prior to disbursing funds on an expenditure should be reviewed and modified where necessary. Views of Responsible Officials: In the first quarter of 2023, management deployed a standardized platform across LCMC Health to enhance automated approval workflows. Automated enhancements included: • Automated approval routing based on predefined authorization hierarchies. • System-enforced approval checkpoints prior to payment processing. • Audit trail functionality that logs all approval actions and user activities. In addition, management conducts routine staff training and periodic reviews of authorization hierarchies to ensure on-going effectiveness and compliance with financial controls. These enhancements reflect LCMC Health’s proactive commitment to maintaining strong internal control processes