Finding Text
2021-005 Department of Health and Human Services
CFDA #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 1 TIN #381649577
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting
Material Weakness in Internal Control Over Compliance and Material Noncompliance
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective
internal control over the federal award that provides assurance that the entity is managing
the federal award in compliance with federal statutes, regulations, and conditions of the
federal award.
Condition: The Organization claimed expenses that were reimbursed by other funding
sources. These expenses were improperly included in the HHS Special Report which caused
the report to be inaccurate.
Cause: The Organization submitted expenses that were to be reimbursed by other funding
sources (i.e., Medicare). The Organization did not have an adequate internal control policy
in place to ensure review and approval of cash disbursements claimed under the federal
programs were documented and to ensure that expenses claimed in the Special Report
were complete and accurate.
Effect: The lack of adequate policies governing expenses and preparation and submission of
the Report increases the risk that employees participating in the federal award
administration may not be able to detect and correct noncompliance in a timely manner.
The Organization submitted expenses over their actual allowable expenses.
Questioned Costs: $186,061 which was reimbursed from other sources and an additional
$35,521 that was unsupported.
Context: A nonstatistical sample of 65 expenditures was selected for testing, which
accounted for $92,432 of $1,198,401 of direct program expenditures.
Repeat Finding from Prior Years: No
Recommendation: We recommend that the Organization enhance internal control policies
to ensure all amounts reimbursed by other funding sources are adequately documented and
reduced from the eligible expenditure listing and are properly recorded in the Special Report
required to be submitted to the federal agency. We also recommend the Organization
enhance internal control policies to ensure that the required Reports are properly reviewed
prior to submission to ensure all key line items are necessary, correct, meet the
requirements of the federal program, and are properly recorded in the Special Reports
required to be submitted to the federal agency.
Views of Responsible Officials: Management agrees with the finding.