Finding 1099033 (2023-002)

Cash Management U.S. Department of Public Health ALN: 93.829, Central Montana Certified Community Behavioral Health Clinic Expansion Project Criteria: Entities receiving federal awards shall establish and maintain internal control over the federal awards that provide reasonable assurance that the entity is managing the federal awards in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition: The Center has spreadsheets and financial statements supporting the amounts drawn during the year for this award; however, there was no indication that requests for reimbursements were reviewed or authorized prior to submission. Context: There were four draws made during the fiscal year for this award, totaling $2,410,670. For one draw, funds were drawn in advance of costs incurred, totaling $368,286. For the remaining three, funds were drawn on a reimbursement basis after costs were incurred. Effect: There is an increased risk of errors in draw amounts if internal controls are not in place. Questioned Costs: No questioned costs. Cause: Primarily, one staff member was responsible for the cash draws. Auditor Recommendation: We recommend that the Center establish policies and procedures for cash management over federal funds, implement internal controls over cash management, and retain documentation for these controls. Organization Response: Requests for cost reimbursements (drawdowns) from federal funds will be requested by the Accounting Manager (or Controller in the absence of the Accounting Manager) and reviewed and authorized by the Controller (or CFO in the absence of the Controller) prior to submission of the drawdown. Once the drawdown has been approved by the Controller (or CFO in the absence of the Controller), then the Accounting Manager submits the drawdown request for funds. In the absence of the Accounting Manager to submit the drawdown request, the Controller initiates the drawdown request, the CFO reviews and approves the request, and the Controller submits the drawdown request. Supporting documentation for cost reimbursement (drawdowns) will be maintained by the Controller (or CFO in the absence of the Controller) and the Staff Accountant and Accounting Manager will also retain any supporting documentation related to the drawdown of federal funds. The Center for Mental Health policy and procedure for cash management of federal funds has been updated to include this additional level of control.