Audit 388643

Department of Health and Human Services Federal Financial Assistance Listing #93.044/93.045/93.053 – Aging Cluster Matching, Level of Effort, Earmarking Material Weakness in Internal Control Over Compliance and Noncompliance Deemed Not Material Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Agency calculated the value of its in-kind contributions, which were included in the Agency’s matching calculation, using the State of Nebraska minimum wage. The calculations contained errors as the wage rate used was not properly updated. Cause: The Agency’s internal controls in place to review the calculation of the valuation of the in-kind contributions did not identify errors in the calculation. Effect: The matching calculation was understated for all months reported for the fiscal year ended June 30, 2025 as the wage rate used had not been updated since 2022. The result of the errors did not result in material noncompliance as sufficient matching funds were obtained from other sources. Questioned Costs: None. While there were errors in the calculation of the valuation of in-kind volunteer hours, the errors did not impact federal funds awarded, nor did they have an impact on the Agency’s compliance with the required minimum matching calculation. Context: Three out of twelve monthly reports which included the in-kind contribution calculation were tested. Errors in the testing were identified in all three months tested. Repeat Finding from Prior Years: No. Recommendation: We recommend that management implement policies and internal control procedures to ensure the proper value is assigned to in-kind contributions. Views of Responsible Officials: Management agrees with the findings. Subsequent to year-end, management has implemented a control process whereby the in-kind calculation is checked against the current State of Nebraska minimum wage rate.