U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Cost-reimbursement contracts under the federal acquisition regulation require that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Ordinary course of business would be in accordance with the terms and conditions of a subcontract or invoice and ordinarily within 30 days of the request to the federal government for reimbursement. Condition: We selected a sample of expenditures requested for reimbursement. In our testing of the sample, we noted: $186,736 in expenditures that were incurred and requested for reimbursement in December 2022; however, the payment for the expenditure was not made until May 2023. Cause: The Foundation waited for reimbursement funds to be received to pay the expenditure for cash flow purposes. Effect or potential effect: Since the federal award is a cost-reimbursement contract, the request for reimbursement was not in compliance with the cash management requirements of the federal award. Recommendation: We recommend that management limit the time between requests to the federal government for reimbursement and payment of the expense to 30 days or less. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.
U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards but may be used for interim accounting purposes, provided that: ? The system for establishing the estimates produces reasonable approximations of the activity actually performed; ? Significant changes in the corresponding work activity (as defined by the non-federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and ? The non-federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Cause: During the period July 1, 2022, through December 31, 2022, the Foundation allocated salaries and benefits to the federal award based on the approved grant budget. Personnel working on the federal award are not required to keep timesheets, and internal controls have not been established for an after-the-fact review of charges to the Federal award based on budget estimates. Rent expenses to the federal award were allocated based on budgeted time spent on the program instead of actual. Effect or potential effect: Budget estimates alone do not qualify as support for charges to Federal award. Charges for actual time worked could vary, resulting in an incorrect amount charged to the federal award for salaries, benefits, and rent expenses. Additionally, since the Foundation is using budgets without an after-the-fact review of charges, the Foundation is not complying with the cost principles. Recommendation: We recommend that personnel who work on the federal award maintain a weekly timesheet that is reviewed and approved by the appropriate supervising personnel. We recommend that the Foundation perform an after-the-fact review of charges made to the federal award compared to the timesheets for the work performed and make any adjustments necessary. This after-the-fact review should be performed quarterly, at a minimum. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.
U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Management is responsible for establishing and maintaining effective internal control over financial reporting so that financial statements are complete, accurate, and presented in accordance with accounting principles generally accepted in the United States of America (?GAAP?). Management is responsible for only charging allowable costs to the federal award. In accordance with cash management requirements for cost-reimbursed contracts, the Foundation is required to request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Condition: In December 2022, the Foundation expensed and requested reimbursement for $216,667 for 5,000 assessments completed. However, as of December 31, 2022, only 696 assessments were completed. The other 4,304 assessments were completed in January 2023 and February 2023. In accordance with GAAP, expenses should be recorded when incurred. Since these assessments weren?t completed until 2023, there was a $186,492 audit adjustment to reduce expenditures for the assessments along with $18,649 in related indirect costs. This expenditure is not included in the schedule of federal and state awards for the year ended December 31, 2022. Cause: The Foundation is using a contractor to complete the assessments. The vendor billed for the assessments in December 2022. Management is maintaining a tracker of assessments billed compared to assessments completed. However, the expenditure was recorded based on assessments billed. Effect or potential effect: The financial statements required a material adjustment to be in accordance with GAAP. The federal award was charged $186,492 in advance of when the expense was incurred. Recommendation: We recommend that management record the cost of the assessments in the period the assessment is completed, as documented in the tracker of assessments. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.
U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Cost-reimbursement contracts under the federal acquisition regulation require that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Ordinary course of business would be in accordance with the terms and conditions of a subcontract or invoice and ordinarily within 30 days of the request to the federal government for reimbursement. Condition: We selected a sample of expenditures requested for reimbursement. In our testing of the sample, we noted: $186,736 in expenditures that were incurred and requested for reimbursement in December 2022; however, the payment for the expenditure was not made until May 2023. Cause: The Foundation waited for reimbursement funds to be received to pay the expenditure for cash flow purposes. Effect or potential effect: Since the federal award is a cost-reimbursement contract, the request for reimbursement was not in compliance with the cash management requirements of the federal award. Recommendation: We recommend that management limit the time between requests to the federal government for reimbursement and payment of the expense to 30 days or less. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.
U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. Budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards but may be used for interim accounting purposes, provided that: ? The system for establishing the estimates produces reasonable approximations of the activity actually performed; ? Significant changes in the corresponding work activity (as defined by the non-federal entity?s written policies) are identified and entered into the records in a timely manner. Short-term (such as one or two months) fluctuation between workload categories need not be considered as long as the distribution of salaries and wages is reasonable over the longer term; and ? The non-federal entity?s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. All necessary adjustment must be made such that the final amount charged to the Federal award is accurate, allowable, and properly allocated. Condition and Cause: During the period July 1, 2022, through December 31, 2022, the Foundation allocated salaries and benefits to the federal award based on the approved grant budget. Personnel working on the federal award are not required to keep timesheets, and internal controls have not been established for an after-the-fact review of charges to the Federal award based on budget estimates. Rent expenses to the federal award were allocated based on budgeted time spent on the program instead of actual. Effect or potential effect: Budget estimates alone do not qualify as support for charges to Federal award. Charges for actual time worked could vary, resulting in an incorrect amount charged to the federal award for salaries, benefits, and rent expenses. Additionally, since the Foundation is using budgets without an after-the-fact review of charges, the Foundation is not complying with the cost principles. Recommendation: We recommend that personnel who work on the federal award maintain a weekly timesheet that is reviewed and approved by the appropriate supervising personnel. We recommend that the Foundation perform an after-the-fact review of charges made to the federal award compared to the timesheets for the work performed and make any adjustments necessary. This after-the-fact review should be performed quarterly, at a minimum. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.
U.S. Department of Health and Human Services, pass-through State of Tennessee Department of Health - Immunization Cooperative Agreements (ALN COVID-93.268) Federal Award Identification Number Year 34349-31823 2022 Criteria: Management is responsible for establishing and maintaining effective internal control over financial reporting so that financial statements are complete, accurate, and presented in accordance with accounting principles generally accepted in the United States of America (?GAAP?). Management is responsible for only charging allowable costs to the federal award. In accordance with cash management requirements for cost-reimbursed contracts, the Foundation is required to request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Condition: In December 2022, the Foundation expensed and requested reimbursement for $216,667 for 5,000 assessments completed. However, as of December 31, 2022, only 696 assessments were completed. The other 4,304 assessments were completed in January 2023 and February 2023. In accordance with GAAP, expenses should be recorded when incurred. Since these assessments weren?t completed until 2023, there was a $186,492 audit adjustment to reduce expenditures for the assessments along with $18,649 in related indirect costs. This expenditure is not included in the schedule of federal and state awards for the year ended December 31, 2022. Cause: The Foundation is using a contractor to complete the assessments. The vendor billed for the assessments in December 2022. Management is maintaining a tracker of assessments billed compared to assessments completed. However, the expenditure was recorded based on assessments billed. Effect or potential effect: The financial statements required a material adjustment to be in accordance with GAAP. The federal award was charged $186,492 in advance of when the expense was incurred. Recommendation: We recommend that management record the cost of the assessments in the period the assessment is completed, as documented in the tracker of assessments. Views of responsible officers: Management acknowledges this finding and will address remediation in the accompanying management?s corrective action plan in appendix A.