Finding Text
Finding 2023-002: Significant Deficiency – Activities Allowed or Unallowed
Assistance Listing Number (ALN): 93.788
Federal Program: Opioid STR
Federal Agency: U.S. Department of Health and Human Services
Pass-Through Entity: Minnesota Department of Human Services
Federal Award Number: HT79TI083289 and H79TI085729
Federal Award Year: December 31, 2023
Criteria: 2 CFR 200.403(e) and (f) state that charges to federal awards must be determined in accordance with generally accepted accounting principles (GAAP) and be adequately documented. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; and support the distribution of the or costs among specific activities or cost objectives if the expenses supported more than one federal award, or a federal award and non-federal award
Condition/Context: Six of the forty non-payroll transactions that were tested did not have evidence of approval for the amount allocated to the federal program, one transaction was recorded in the incorrect period and one transaction did not have evidence of receipt. The Organization experienced an unusually elevated level of turn-over of key personnel in business operations during the period of time that the control procedures lapsed as the individuals replacing those responsible for attaining allocation authorizations were not yet hired or fully trained in their assignments.
The sample was not a statistically valid sample.
Cause: The Organization's control process for expenditure authorizations was not properly implemented.
Effect: Inadequate controls over the allocation of costs could result in unallowable costs being improperly applied to the federal program.
Questioned Costs: Not required
Recommendation: The Organization should have formal written procedure to ensure that all relevant authorization and reviews have been completed before allocating costs to federal programs.
Views of responsible officials: Management agrees with the auditors' finding and will take action to implement controlling procedures over federal programs.