Finding Text
FINDING 2022-004
Information on the federal program:
Subject: Aging Cluster – Internal Controls
Federal Agency: Department of Health and Human Services
Federal Program: Aging Cluster
Assistance Listing Number: 93.044, 93.045, 93.053
Compliance Requirement: Cash Management
Audit Finding: Significant Deficiency
Criteria: 2 CFR section 200.303 states in part: "The non-Federal entity must:
(a) Establish and maintain effective internal control over Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal awards in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in 'Standards for Internal Control in the Federal Government' issued by the Comptroller General of the United States or the 'Internal Control Integrated Framework', issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). . . ."
Condition: An effective internal control system was not in place to ensure compliance with requirements related to the grant agreement and the Cash Management compliance requirements.
Cause: CICOA's management had not developed a system of internal controls to ensure compliance with the compliance requirements listed above.
Effect: The failure to establish an effective internal control system placed CICOA at risk of noncompliance with the grant agreement and the compliance requirements. A lack of effective reviews could have also allowed noncompliance with the compliance requirements and allowed the misuse and mismanagement of federal funds and assets by the review process not ensuring there was accurate reporting of the activities of the programs.
Questioned Costs: There were no questioned costs identified.
Context: We noted that for four claims in a sample of four, there was no formal review/approval of the FSSA Contract Claim Reimbursement form outside of who is preparing the form. The CFO prepares and submits the claim without a secondary review.
Identification as a repeat finding, if applicable: Yes. The same finding appeared in the prior year report as Finding 2021-004.
Recommendation: We recommend that CICOA establish a review control to ensure that segregation of duties are in place and that someone separate of who prepares the reimbursement claim is the one submitting the claim. The reimbursement claim should be compared to supporting documentation to ensure accuracy of the claim reimbursement form.
Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.