Finding Reference: 2024-001 – A. Activities Allowed or Unallowed; B. Allowable Costs/Cost Principles Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services Award Periods: June 1, 2023 – June 30, 2024 Description: Review and Approval of Purchase Orders Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” Condition The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the purchase orders that were included in the Behavioral Health System Baltimore, Inc. (BHSB) submissions. Cause The Corporation did not obtain sufficient evidence of the review and approval of purchase orders reported to BHSB in the required submissions. Effect or potential effect The expenditures included in the BHSB submissions could be unallowed costs. Questioned costs None. Identification of a repeat finding No. This is not a repeat finding. Context In order to evidence review and approval of individual expenditures, management reviews and approves expenditures as part of the purchasing and payables business process, specifically the review and approval purchase orders. In conjunction with our testing related to the submissions and allowability, we selected a sample of expenditures to test management’s review and approval of expenditures as part of the purchasing and payables business process. In accordance with the Corporation’s purchasing and payables business process, vendor specific purchase orders must be reviewed and approved prior to the payment of the invoices. There were six purchase orders totaling $18,052, or approximately 5% of our population, that did not have approval. These purchase orders were isolated to one vendor for purchases that is set up under the Corporation’s group purchasing process, which did not always require a segregation between the requisitioner and approver during the grant period. The purchases from our testing that did not have an approval, all occurred subsequent to March 2024, which is when the employee turnover occurred, and a new approver was not designated yet. As a result, the respective orders did not route for approval as the purchase order was submitted by the previous approver. Based on review of the purchase order and invoice for the sample selected, no expenditures were identified as unallowable based on the terms and conditions of the grant agreement and federal program. Recommendation Management should obtain documentation that evidences the review and approval of expenditures submitted to BHSB. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-002 – C. Cash Management; L. Reporting Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services Award Periods: June 1, 2023 – June 30, 2024 Description: Evidence of Review and Approval of the Reported Expenditures and Timely Report Submission Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” The major program includes two sub-vendor contracts between the granting agency, BHSB and the University of Maryland Medical Center (UMMC) for the OUD MEETS Medical Patient Engagement – OTP and OUD MEETS Medical Patient Engagement – Hospital programs. In accordance with both subaward contract terms within Section 2, Financial Reporting and Payment for Services, “invoices are due by the 15th day of the month following the invoice period.” Condition The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the expenditures that were included in the BHSB submissions and timeliness of the submissions. Cause The Corporation did not retain sufficient evidence of the review and approval of the expenditures reported to BHSB in the required submissions nor were all submissions made with the required 15-day period. Effect or potential effect The expenditures included in the BHSB submissions could be inaccurate or information reported may be incomplete or untimely. Questioned costs None. Identification of a repeat finding No. This is not a repeat finding. Context On a monthly basis, the expenditures are compiled and reconciled to the cash reimbursement request and internal tracking spreadsheet. The Corporation submitted a total of 24 BHSB cash reimbursement submissions for the subawards. The total payments received by the Corporation were $352,026. During the last quarter of the grant period, there were changes in employee responsibilities due to employee turnover. Specific to the last quarter of the grant period, for the related monthly BHSB cash reimbursement submissions and the 440 annual financial report submissions, management did not retain documentation to evidence review and approval of the expenditures requested for cash reimbursement. The total expenditures submitted for reimbursement were $111,705 or approximately 32% for the last quarter of the grant period. As part of our testing, we selected 10 out of the 24 BHSB cash reimbursement submissions throughout the grant period, and 9 out of the 10 submissions were not submitted timely. We agreed the ten samples to supporting underlying documentation for each of these selections totaling $215,208. Three of the ten selections totaling $78,336, were within the last quarter. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure. Recommendation Management should reassess the design of its controls to ensure submissions to BHSB are made timely within the required 15-day period and that documentation is retained that evidences the review and approval of expenditures submitted to BHSB for reimbursement. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-003 – H. Period of Performance Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services Award Periods: June 1, 2023 – June 30, 2024 Description: Timely Payment of Financial Obligations Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.344(c), Closeout, “The recipient must submit, no later than 120 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.” Condition Management’s monitoring control over compliance with applicable period of performance requirements and timely payment of the reported expenditures following their reimbursement from BHSB was not designed appropriately to ensure all expenditures were paid within the specific period of performance. Cause The Corporation did not process payments to one vendor within the applicable period of performance requirement for federal award expenditures reimbursed by the BHSB. Effect or potential effect The expenditures included in the BHSB submissions are not in compliance with applicable period of performance requirements. Questioned costs $17,151 represents Federal expenditures that remained unpaid or were paid outside of the 120 days following the end date of the period of performance for the following subawards: • 93.959: BH031 - OUD MEETS-OTP-UMMC - $ 3,589 • 93.959: BH031 - OUD MEETS-HOS-UMMC - $13,562 Identification of a repeat finding No. This is not a repeat finding. Context As part of our testing, we selected 25 expenditures. We identified that four selections or $1,695 of the total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. This was isolated to one vendor that is set up under the Corporation’s group purchasing process. As part of our testing, there were $4,362 purchases tested and $36,943 total purchases related to the vendor within the grant period. Due to complexities of group purchase billing and recording for the vendor, management further investigated and identified that $17,151 of total expenditures within the grant period or approximately 5% of total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. Recommendation As the grant period has ended, we recommend that the Corporation works with the funding agency to remedy the period of performance noncompliance. In addition, we recommend that the Corporation reassess the design of its period of performance controls to identify where enhancement or additional controls are needed over liquidation of financial obligations subsequent to the end of a grant award. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-004 – Other finding – SEFA Preparation Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Preparation of Schedule of Expenditures of Federal Awards Criteria The Uniform Guidance 2 CFR section 200.303 states, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” The Uniform Guidance 2 CFR section 200.510 states, “(b) Schedule of expenditures of Federal awards. The auditee must also prepare the Schedule for the period covered by the auditee’s financial statements which must include the total Federal awards expended as determined in accordance with §200.502 Basis for determining Federal awards expended.” Condition The Corporation did not have appropriately designed internal controls in place to determine the correct amount of federal expenditures to be included on the Schedule. The Corporation omitted the expenditures related to the Assistance Listing Number 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds as well as expenditures related to seven other assistance listing numbers. Cause The Corporation did not design internal controls to completely and accurately report expenditures within the Schedule. Effect or potential effect The Schedule prepared by the Corporation was misstated but was subsequently corrected. A misstated Schedule could result in the improper selection of federal award major programs or an incorrect percentage of coverage being calculated resulting in a restatement of a previously issued Uniform Guidance report. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2023-002. Context Expenditures for Assistance Listing 21.027 of approximately $339,000 were excluded from the Schedule. In addition, expenditures totaling approximately $261,000 for seven other assistance listing numbers were also excluded from the Schedule. Recommendation The Corporation should update its policies and procedures and internal controls to ensure accurate reporting of the Schedule as required by the Uniform Guidance. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-005 – A. Activities Allowed or Unallowed; B. Allowable Costs/Cost Principles Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Evidence of Review and Approval of the Reported Expenditures Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.” The major program Assistance Listing 21.027 includes two sub-vendor contracts between the granting agency, Department of Treasury and UMMS for the Baltimore County Public Health Pathways Healthcare Workforce Recovery Program and MONSE HVIP. Condition The Corporation did not have appropriately designed internal controls in place over the grant subawards related to review and approval of the expenditures that were included in the Baltimore County, Maryland submission and the Mayor's Office of Neighborhood Safety and Engagement submissions. Cause The Corporation did not retain sufficient evidence of the review and approval of the expenditures reported to Baltimore County, Maryland and the Mayor's Office of Neighborhood Safety and Engagement in the required submissions. Effect or potential effect The expenditures included in the Baltimore County, Maryland submission and the Mayor's Office of Neighborhood Safety and Engagement submissions could be unallowed costs, inaccurate or information reported may be incomplete or untimely. Questioned costs None. Identification of a repeat finding No. This is not a repeat finding. Context For the Baltimore County Public Health Pathways Healthcare Workforce Recovery Program subaward’s annual financial report submission to Baltimore County, Maryland, management did not retain documentation to evidence review and approval of the stipend expenditures requested for cash reimbursement. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure. For the MONSE HVIP subaward’s monthly financial report submissions to the Mayor's Office of Neighborhood Safety and Engagement, management did not retain documentation to evidence review and approval of the fringe and indirect cost rates and expenditures requested for cash reimbursement. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure. Recommendation Management should reassess the design of its controls to ensure documentation is retained that evidences the review and approval of the stipends, fringe and indirect cost rates and the expenditures submitted to the Department of Treasury for reimbursement. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-006 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Incomplete Federal Requirements within Procurement Policies Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for our major programs, we noted that the Corporation did not have a procurement policy that conforms to all applicable standards contained in the Uniform Guidance, when purchasing goods or services with the federal funds. Cause The Corporation did not comply and maintain a procurement policy that conforms to the provisions required by the Uniform Guidance upon receiving such federal funds related to their federal programs. Effect or potential effect Purchasing of goods and/or servicing with the major federal programs may not be in compliance with the Uniform Guidance. Questioned costs None. Identification of a repeat finding This is a repeat finding of Finding 2023-001. Context Management has not established a procurement policy in line with the applicable standards contained in the Uniform Guidance based on review of the existing policy and discussions with management, however, no other instances of noncompliance with procurement standards identified in 2 CFR part 200 were noted as the amount of purchases exceeding the micro-purchase threshold was not direct and material to this program and therefore no further testing over procurement was performed. Recommendation The Corporation should update its procurement policy to include the provisions required by the Uniform Guidance for purchasing goods and/or services with federal funds. View of responsible officials There is no disagreement with the audit finding.
Finding Reference: 2024-007 – I. Procurement, Suspension and Debarment Federal Program Information Federal Agencies: Department of Treasury Awards: Assistance Listing 21.027 – COVID-19 - Coronavirus State and Local Fiscal Recovery Funds Award Periods: July 1, 2023 – December 31, 2026 Description: Evidence of controls over Suspension and Debarment Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Title 2, Subtitle A, Chapter II, Part 200, Subpart C 200.214 – Suspension and debarment – Non-Federal entities are subject to the non-procurement debarment and suspension regulations that restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion for our major programs, we noted that the Corporation did not have appropriately designed internal controls in order to retain evidence related to the completeness and accuracy of the vendor list and monthly results for suspension and debarment. The Corporation validates that vendors are reviewed on a monthly basis to ensure they are not included on the suspension and debarment list. There was no documentation retained to support the vendor list and results were complete and accurate for the monthly validation. Cause The Corporation did not retain sufficient evidence to support the completeness and accuracy of the vendor list and results for suspension and debarment. Effect or potential effect The vendor list and monthly results for suspension and debarment may not be complete and accurate and therefore, vendors used for federally funded activities may be suspended or debarred and result in noncompliance with the requirement. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context As part of the suspension and debarment testing, we did not identify any vendors that were excluded from the vendor list, monthly results or included within the suspension and debarment list. Management retained evidence of the monthly review including their documentation of follow ups on any vendors that required further investigation. Recommendation The Corporation should retain documentation to support completeness and accuracy of the vendor list submitted for screening and the results obtained to support the screening process to ensure that no suspended or debarred vendors are utilized by the Corporation prior to entering into transactions. View of responsible officials There is no disagreement with the audit finding.