Finding 2022-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles A material weakness in internal control over compliance was issued related to activities allowed or unallowed and allowable costs/cost principles for the Advocate Aurora Health (AAH) Disaster Grant ? Public Assista...
Finding 2022-002 Activities Allowed or Unallowed and Allowable Costs/Cost Principles A material weakness in internal control over compliance was issued related to activities allowed or unallowed and allowable costs/cost principles for the Advocate Aurora Health (AAH) Disaster Grant ? Public Assistance (Presidentially Declared Disasters). The Organization?s internal controls were not suitably designed to retain all supporting documentation over their review and approval of FEMA federal expenditures. Management did not retain supporting documentation to support the inventory usage reports used in the development of the FEMA expenditures. Management will ensure that a comprehensive review, approval, and document retention process is applied consistently for any future FEMA claims. The FEMA personal protective equipment (PPE) claim covered two years, which are 2020 and 2021. As noted in the audit, the Organization engaged a third party to perform a physical inventory of supplies at December 31, 2020 which included the PPE claimed in the SEFA obligation. The physical inventory was reconciled to the inventory management system. The audit selected a sample inventory count performed by third party and agreed the inventory counts back to the third party records noting no exceptions. A physical inventory was not performed at December 31, 2021. Due to the COVID pandemic, there were unusual circumstances that precluded an annual physical inventory in 2021, due to the easy transmission of COVID-19, by breathing in air carrying droplets or aerosol particles that contain the SARS-CoV-2 virus when close to an infected person or in poorly ventilated spaces with infected persons. Noting there were no system changes to the inventory system during 2021, we relied on the prior year audits and internal control review of the inventory system to provide comfort for the Organization for reliance on the inventory usage for this FEMA claim. In addition to relying on past inventory documented audit controls, the Organization routinely reviews the supply expense generated from the inventory system. This will be implemented effective October 1, 2023. Nan Nelson, SVP Region Chief Financial Officer, is responsible for this Corrective Action Plan.