Finding Text
2022-004—Allowable Costs
Federal program information:
Funding agency: U.S. Department of Health and Human Services
Title: Health Center Cluster
Assistance Listing Number (ALN): 93.224, 93.527
Award number and year: H80C00202 (1/1/2022–12/31/2022)
H8ECS37778 (5/1/2020–4/30/2022)
H8FCS40603 (4/1/2021–3/31/2023)
C8ECS43815 (9/15/2021–9/14/2024)
Criteria: According to 2 CFR Part 225, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. Additionally, non-Federal entities receiving federal awards should establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements.
Condition: For 14 of 25 nonpayroll transactions tested, there was no evidence available supporting that the items ordered had been received by the program/location for which they were ordered.
Questioned Costs: $31,600.
Context: 14 of 25 nonpayroll transactions tested were not adequately documented.
Cause: FCCH has not developed policies and procedures requiring documentation that goods purchased have been received by the program/location prior to payments being approved and remitted to vendors.
Effect: FCCH may not be able to demonstrate that some costs charged to federal programs are allowable.
Auditor’s Recommendations: FCCH should implement its approved policies and procedures to ensure that amounts charged to federal programs are allowable and properly documented. Additionally, FCCH should consider updating its policies and procedures to require documentation that goods purchased have been received by the program/location prior to payments being remitted to vendors.
Management’s Response: FCCH management shall promote accountability for following approved policies and procedures over employee records and accounts payable. Receiving policies and processes, including documentation for receiving inventory and equipment, should be developed and then implemented. All involved personnel should be trained in the new policies.