Finding Text
Finding 2023-003 – Internal Control Deficiency Cash Management
Identification of the federal program:
Federal grantor: United States Department of Health and Human Services
Assistance listing no.: 93.048
Program name: Special Programs for the Aging, Title IV, and Title II, Discretionary Projects
Criteria or specific requirement (including statutory, regulatory, or other citation):
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:
There was no evidence throughout the audit period of internal controls in place to ensure that requests for reimbursement are based on expenses paid for by AdviseWell, Inc.
Cause:
Controls were not designed to properly ensure the monthly cash drawdowns were complete and accurate and based on expenses that were paid for by AdviseWell, Inc.
Effect or potential effect:
Inaccurate requests for reimbursement could occur.
Questioned costs:
None.
Context:
A monthly profit and loss statement is generated for each grant within the program. This monthly statement is used to make the monthly request for reimbursement. There was no documentation evidencing that the monthly profit and loss statement was reviewed. Additionally, there was no process in place to ensure that the expenditures have been paid for prior to requesting reimbursement, and in certain instances, the final profit and loss statements were not used. Management performed a reconciliation for amounts requested for reimbursement to the final expenditure detail on the profit and loss statements and noted that, ultimately, actual expenditures of the program exceeded the request for reimbursement.
Identification as a repeat finding, if applicable:
This is a repeat finding – Finding 2022-002.
Recommendation:
AdviseWell, Inc. should implement internal controls to ensure requests for reimbursement are based upon final expenses and that any inputs used in the request for reimbursement are reviewed and evidence of that review is retained.
View of responsible officials:
Management agrees with the finding. Controls were enhanced in October 2023 to retain documentation of the review. Additional controls will be implemented to ensure cash draws are based upon final expenses paid for by AdviseWell, Inc.