Finding 1131636 (2024-001)

Item: 2024-001 Assistance Listing Number: 93.959 Programs: Block Grants for Substance Abuse Prevention, Treatment and Recovery Services Federal Agency: U.S. Department of Health and Human Services Pass-Through Agencies: Care 1st Contract Number: Unknown Award Year: October 1, 2023 to September 30, 2024 Compliance Requirement: Reporting Criteria: In accordance with the grant agreement, the Organization is required to submit quarterly reports during the grant period which include qualifying costs incurred under the grant award. Condition: A required quarterly report submitted to the granting agency included inaccurate reporting of the qualifying expenditures. Additionally, for all four quarterly reports there was no evidence of management review or approval of the reports prior to submission to the funder. Questioned Costs: $0 Context: In a population of 4 required quarterly reports, we conducted a non-statistical sample of 2 quarterly reports to ascertain if the information included in the quarterly reports was properly supported and reviewed and approved prior to submission. For the second fiscal quarterly report, we noted the qualifying expenditures reports incorrectly included payroll costs for an additional month outside of the quarter. Excluding these erroneously reported costs, the Organization still incurred qualifying expenses under the grant in excess of the funding. As a result, there was no impact to the Schedule of Expenditures of Federal Awards or to the financial statements. As a result of this exception, we obtained and tested the remaining two quarterly reports noting no similar issues. However, for all four quarterly reports tested, we noted no evidence of management review or approval of the reports prior to submission to the funder. Efect: A quarterly report submitted to the funder contained inaccurate qualifying expense information. This is deemed to be a material weakness in internal control over compliance. Cause: There was an error in the payroll expense query used to accumulate costs to populate the quarterly report and management did not have a process in place to review the quarterly reports and underlying expenses prior to submission to the funder. Identification as a Repeat Finding: Not a repeat finding Recommendation: The Organization should implement additional controls to ensure expense information included in the quarterly reports in reviewed and approved prior to submission. This review and approval should be clearly documented. Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.