Finding Text
Identification of the federal program:
Federal Agencies: Department of Health, Health Resources and Services Administration (HRSA)
Pass-Through Entities: None
Assistance Listing No: 93.493 Congressional Directives
Award Periods: 2023
Criteria or specific requirement (including statutory, regulatory or other citation):
2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award 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:
Management did not have a formal, documented internal control in place to review the allowability of the expenses to be allocated to the grant.
Cause:
Management did not have in place a formal, documented internal control to review the allowability of expenses to be charged to the grant.
Effect or potential effect:
A lack of internal controls over the review and approval of expenditures could result in unallowable expenses being charged to the federal award.
Questioned costs:
None.
Context:
We obtained email communication among Akron Children’s personnel discussing the types of costs to be submitted (construction costs) and that the general contractor expenses could be used. However, once these costs had been identified to be charged to the grant, management did not document a review of the allowability of these transactions.
Total expenditures reported on the Schedule of Expenditures of Federal Awards for the year ended December 31, 2023 were $2,000,000.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Akron Children’s should put in place internal control procedures and retain evidence of review of expenditures charged to the grant to ensure the expenses are allowable.
Views of responsible officials:
Akron Children's will implement a more detailed review and documentation process for allowable expenses prior to determining expenses that are eligible for federal grant reimbursement.