Finding Text
Criteria: According to §200.303 Internal controls of 2 CFR Part 200, the non-Federal entity must
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. According to the Uniform Guidance
(2 CFR Part 200), specifically §200.400 - 200.475, costs charged to federal awards must be reasonable,
allocable, and allowable under the terms of the award.
Condition and Context: Management was unable to provide sufficient documentation for specific
COVID-19 expenditures that were initially reported on the Schedule of Expenditures of Federal Awards.
As a result, audit adjustments were necessary to revise the total COVID-19 expenditures to include only
those amounts that could be adequately substantiated.
Cause: The lack of sufficient documentation was primarily due to a lack of adequate internal controls and
oversight regarding the classification and allocation of COVID-19 expenditures charged to federal awards.
Effect: Management did not have sufficient documentation to support activities met the terms and
conditions related to the COVID-19 Indian Self-Determination federal awards. Audit adjustments were
necessary to revise the total COVID-19 expenditures to include only those amounts that could be
adequately substantiated.
Questioned Cost: None.
Repeat Finding: No
Recommendation: We recommend the Hospital establish and document clear policies and procedures
for identifying, classifying, and allocating costs charged to federal awards, ensuring compliance with the
Uniform Guidance. Additionally, we recommend the Hospital conduct regular reviews of expenditures
charged to federal awards to ensure compliance with federal regulations and the terms of the awards.
Views of Responsible Officials: The Finance team of Financial Controller and Senior Accountant are
responsible for gathering sufficient documentation specific to COVID-19 expenditures. Proper and
accurate classification and allocation of COVID-19 related activities and expenditures will be tracked and
monitored before charging to funds. This will be completed by September 30, 2025.