Finding 1103289 (2024-003)

Finding 2024-003: Internal Controls over Cash Management Federal Grantor: U.S. Department of Health and Human Services Pass-Through Grantor: Illinois Department of Human Services Federal Program: Block Grants for Substance Use Prevention, Treatment, and Recovery Services (93.959) and Block Grants for Community Mental Health Services (93.958) Federal Award Year: Year ended June 30, 2024 Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR) Part 200.303(c) requires non-Federal entities to 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. Condition: During our testing, we noted that internal controls over the Federal award were not properly designed over the cash management compliance requirement. NCBHS is funded under the reimbursement method, and for reimbursement requests prior to March 2024, we were not able to test internal controls over the review of the requests submitted to the grantor. Cause: NCBHS management stated that cash reimbursement requests were reviewed prior to submission to the grantor, but there was no verifiable evidence that the reviews took place prior to March 2024. Effect: Internal controls over Federal awards that are not properly designed increases the risk of noncompliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement. Questioned Costs: None Context: For program 93.959 we tested 6 cash reimbursement requests and noted one of the requests had no evidence of review. For program 93.958, we tested 4 cash reimbursement requests and noted 3 of the requests had no evidence of review. Repeat Finding: Yes Recommendation: Starting in March 2024, management implemented internal controls over the maintenance of documentation to provide evidence of controls in place over compliance with the cash management requirement. We recommend that management continue to follow its implemented system of internal controls that began in March 2024 to ensure documentation over cash management procedures and evidence of reviews performed is retained. Views of Responsible Officials: NCBHS agrees with the recommendation.