ALLOWABLE COSTS AND COST PRINCIPLES
Department of Health and Human Resources (DHHR)
Assistance Listing Number 97.036, COVID-19 97.036
The DHHR analyzed this finding and hereby offers more details into the condition and cause of the finding. Although the DHHR concurs with the condition statement in...
ALLOWABLE COSTS AND COST PRINCIPLES
Department of Health and Human Resources (DHHR)
Assistance Listing Number 97.036, COVID-19 97.036
The DHHR analyzed this finding and hereby offers more details into the condition and cause of the finding. Although the DHHR concurs with the condition statement in the finding, in that certain invoices were paid to one vendor without verifying their accuracy, the DHHR does not concur with the cause statement, which proclaims a lack of proper controls within the DHHR. While no set of internal controls can prevent unseemly or otherwise improper payment activities with absolute assurance, the DHHR does indeed have proper internal controls in place to provide reasonable assurance that invoices are verified for accuracy prior to payment.
The DHHR is a large state agency with many spending units, divisions, and levels of oversight and approval. Accordingly, when paying invoices, the process includes a separation of duties. Authorization to approve cash payments begins with the DHHR spending unit, which was a programmatic unit in this case since the vendor in question was required to provide nasal swab diagnostic testing for COVID-19 and upload the test results immediately, as the tests were for specific DHHR programs and initiatives that were an absolute priority at the time. For these and other types of billings, the spending unit receives the invoice from the vendor, conducts an initial review for completeness and accuracy, and approves [or denies] the invoice for payment pursuant to the internal specifications at the spending unit level.
If approved for payment, the invoice must be certified by the spending unit. Per the Code of State Rules, Title 155, Series 1, Standards for Requisition for Payment Issued by State Officers on the Auditor, the term “certify” means, “To verify that pertinent information is true and accurate by affixation of a manual signature by an authorized person.” To comply with the verification requirement, 155CSR1-3.1.3 requires the invoice to be stamped with the following certification: “I hereby certify that the items or services contained in the foregoing have been received and approved for payment.” Within the DHHR, the certification must be dated and signed by an authorized representative at the spending unit level with authority to approve such payments.
The spending unit then enters the information into wvOASIS, which is the statewide accounting system, and forwards the related documentation to the DHHR central finance office. The central finance office performs a secondary review for completeness and accuracy pursuant to the specifications at the DHHR central level and, if acceptable, approves the documents within the wvOASIS workflow to the WV State Auditor’s Office for final review, approval, and processing of the payment pursuant to the specifications at the statewide level.
For the invoices in question, the person authorized to certify the invoices and approve the payments was an upper-level supervisor, and his duties in that position had included reviewing and verifying the accuracy of certain invoices submitted to the DHHR by vendors supplying the aforementioned COVID-19 testing and mitigation services prior to certifying the invoices for payment. The supervisor originally proclaimed that he certified the invoices only after two individuals working with the program verified the invoices. The supervisor subsequently admitted that he certified the invoices without actually making any effort to verify their accuracy. The supervisor is no longer employed by the DHHR.
It is important to note that although the supervisor certified the invoices without making any effort to verify their accuracy, it has yet to be determined if the vendor’s invoices were correct or erroneous. Currently, there are several internal and external organizations investigating the vendor and the overall condition that led to this finding. Those investigations began prior to the period of the audit. Once complete, the investigations will disclose additional details surrounding the validity of the invoices and the costs in question.