Audit 397388

Finding: Procurement and Suspension & Debarment Federal Assistance Listing Number 21.027 - COVID-19 - Coronavirus State and Local Fiscal Recovery U.S. Department of Health and Human Services Criteria: In accordance with 2 CFR Part 200.318 the recipient or subrecipient must maintain and use documented procedures for procurement transactions under a Federal award or subaward, including for acquisition of property or services. These documented procurement procedures must be consistent with State, local, and tribal laws and regulations and the standards identified in §§ 200.317 through 200.327. Condition: The following matters were noted in regards to policies and procedures surrounding compliance with Procurement and Suspension & Debarment: a. The Organization's an internal policy regarding purchases contained thresholds for procurement quotes and bid processes; however, did not align with Uniform Guidance and were less restrictive than Uniform Guidance requirements. b. The Organization had support showing vendor checks on sam.gov; however, the policy did not contain procedures around suspension and debarment checks. c. The Organization's purchasing policy did not contain procedures to look for geographic preferences as required by Uniform Guidance. d. The Organization's conflict of interest policy did not specifically cover the performance of its employees engaged in the selection, award, and administration of contracts as required by Uniform Guidance. Questioned Costs: N/A Context: The Organization's purchasing policy did not contain elements of federal procurement requirements specified by Uniform Guidance. Effect: Lack of policies and procedures could prevent internal controls from detecting noncompliance with a federal requirements. Cause: Purchasing policies did not contain adequate references to Uniform Guidance procurement and suspension and debarment requirements. Identification as a Repeat Finding: Not a repeat finding. Recommendation: We recommend that the Organization update their procurement policy to include updated Unform Guidance thresholds, documented procedures for suspension and debarment checks, and geographic preferences processes. Views of Responsible Officials: The Organization agrees with the finding. See separate auditee document for planned corrective action.

Finding: Internal Control Over Compliance Federal Assistance Listing Number 93.959 - Block Grants for Prevention and Treatment of Substance Abuse U.S. Department of Health and Human Services Criteria: According to 2 CFR Part 200.403 factors affecting allowability of costs - costs must meet the following general criteria in order to be allowable under Federal awards: (a) be necessary and reasonable for the performance of the Federal award and be allocable thereto under these principles, (b) conform to any limitations or exclusions set forth in these principles or in the Federal award as to types or amount of cost items, (c) be consistent with policies and procedures that apply uniformly to both federally-financed and other activities of the non-Federal entity, (d) be accorded consistent treatment, (e) be determined in accordance with generally accepted accounting principles, (f) to be included as a cost or used to meet cost sharing or matching requirements of any other federally-financed program in either the current or a prior period and (g) be adequately documented. In addition, according to 2 CFR Part 200.303, the non-Federal entity must 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 Organization did not maintain documentation to support the review and approval of allowable costs and draw requests as designed by their internal control structure. Questioned Costs: N/A Context: We tested 40 payroll and nonpayroll expense for allowable costs and allowable activities applied to the grant for the year ended June 30, 2023 for transactional expenses approval process based on the Organization's internal control design. Four selections did not have approval documentation maintained. We tested 8 invoices for cash management for review and approval prior to the Organization requesting federal funds based on the Organization's internal control design. Five selections did not have review and approval documentation maintained. We tested 8 invoices for period of performance for review and approval prior to the Organization requesting federal funds based on the Organization's internal control design. Six selections did not have review and approval documentation maintained. Effect: The Organization did not maintain documentation to support that costs and reimbursement invoices had been approved in accordance with their internal control design. Cause: The entity did not have policy and procedures in place to maintain adequate supporting documentation to show internal controls were operating as designed. Identification as a Repeat Finding: 2022-003 Recommendation: We recommend that the Organization implement policies and procedures to maintain documentation of internal controls over compliance to support controls are operating as designed. Views of Responsible Officials: The Organization agrees with the finding. See separate auditee document for planned corrective action.