Finding Text
Finding Number 2023-009: Costs Incurred & Paid Prior to Reimbursements (Significant Deficiency over
Internal Control and Instance of Noncompliance – Cash Management; Period of Performance) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance, Award Number 94-3302014, Award Year 2022-2023
Criteria: 2023 Compliance Supplement stated that program costs must be paid by non-federal entity funds before
submitting a payment request (2 CFR section 200.305(b)(3)) (i.e., the non-federal entity must disburse funds for
program purposes before requesting payment from the federal awarding agency or pass-through entity). In
addition, a non-federal entity may charge only allowable costs incurred during the approved budget period of a
federal award’s period of performance.
Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings,
we noted 1 sample of $1,000 nonpayroll expenditures that was submitted for reimbursement prior to the
expenditure being incurred.
Repeat Finding from Prior Year(s): Yes, Finding Number 2022-007
Cause and Effect: The Health System did not have proper controls in place to ensure expenditures are incurred
and paid for prior to reimbursements, and that expenditures are incurred within the period of performance of the
contract, which resulted in noncompliance with the compliance requirements of the program.
Questioned Cost: None
Recommendation: We recommend management implement policies and procedures to ensure funds are
disbursed for expenditures incurred prior to reimbursement requests, and that expenditures are incurred within
the contract’s performance period.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding. The Health System will review, modify, and implement policies and
procedures over the program to ensure funds are disbursed for expenditures incurred prior to requesting
reimbursement and that expenditures are incurred within the contract’s performance period.