Finding Text
Finding 2024-004 Internal Controls over Allowability
Identification of the federal program:
Federal Grantor: United States Department of Health and Human Services
Assistance Listing No.: 93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities
Criteria or specific requirement (including statutory, regulatory, or other citation):
2 CFR 200.303 requires that the non-Federal entity must “(a) 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 and the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).”
Condition:
Fairview management did not retain documentation of review and approval of the fringe benefit rate calculation. In addition, Fairview management did not retain documentation of review and approval of supplies expenses for allowability.
Cause:
Fairview Health Services did not have internal controls in place that require supporting documentation of review and approval of the fringe benefit rate calculation and review and approval of supplies expenses for allowability.
Effect or potential effect:
Expenses may be charged to the federal award that are not in compliance with the federal grant agreements.
Questioned costs:
None.
Context:
For Assistance Listing No. 93.817, total fringe benefit expenses were $104,506, representing 6% of total federal expenditures of $1,656,727 for the year ended December 31, 2024.
For Assistance Listing No. 93.817, total supplies expenses were $85,328, representing 5% of total federal expenditures of $1,656,727 for the year ended December 31, 2024.
Identification as a repeat finding, if applicable:
The finding is not a repeat finding from the prior year.
Recommendation:
Management should enhance internal controls to require the review and approval of the fringe benefit rate calculation and review and approval of supplies expenses for allowability.
Views of responsible officials:
Management agrees with the finding and has developed a plan to correct the finding. The accounting manager reviewed and approved the updated 2025 fringe benefit analysis with 2024 actuals on February 28, 2025. Upon finalization of the 2025 budget, the analysis will be revised and reviewed again. Accounting will collect evidence of review and approval of supply expenditure throughout the year to ensure proper retention of the documentation.