Finding 1077461 (2023-001)

Finding 2023-001 – A. Activities Allowed or Unallowed, B. Allowable Costs/Cost Principles, C. Cash Management, H. Period of Performance Information on the Federal Program: Grantor: United States Department of Agriculture Program Name: Special Supplemental Nutrition Program for Women, Infant, and Children Assistance Listing Number: 10.557 Criteria or Specific Requirement: In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Condition: Management was unable to provide evidence of a control being consistently performed to address the risk that the Health System may seek reimbursement for expenditures that are either out of contract period or are for non-permissible costs under the applicable contracts. Cause: As a result of multiple control owners, there is inconsistency in the steps performed as part of the control and evidence was unavailable to support the effective operation of management’s review control. Effect or Potential Effect: As a result of inconsistent review of vouchers submitted to the applicable agency, the Health System could include non-permissible, or out of period expenditures, when seeking reimbursement. Questioned Costs: Not applicable. Context: For each of the contracts that are in affect for the period under audit, the Health System submits a monthly voucher request to the local agency for reimbursement of eligible expenditures. Each of these submissions is to be reviewed by a person knowledgeable of the program. In testing this review control, evidence to support the effective operation of this control could not be provided for 16 of the 35 occurrences. Identification as a repeat finding: This finding is not a repeat finding from the prior year. Recommendation: The Health System should improve its process to standardize the review of program vouchers, including retention of evidence supporting the performance of the control. View of responsible officials: Management concurred with the audit finding and has implemented a standardized review and approval process that will be performed prior to monthly vouchers being submitted for reimbursement, including verification of allowability of expenditures and that all expenditures were incurred in the proper period. Evidence of the monthly review and approval will be retained.