Finding Text
Criteria or Specific Requirement: In accordance with 2 CFR 200.302(b)(1) and (b)(3), non-federal
entities must maintain effective control over, and accountability for, all funds, property, and other assets.
Financial management systems must allow for the identification, in their accounts, of all federal awards
received and expended, and must ensure that funds are used in accordance with federal award agreements.
In addition, state grant agreements typically require the separate tracking of expenditures by funding
source.
Condition and Context: During procedures performed over the Schedule of Expenditures of Federal
Awards, it was noted that Solvista Health did not separately track expenditures, and related revenues from
state and federal programs/sources for the Mental Health Block Grant. All transactions were recorded
within a single classification of accounts without designation of funding or expenditure source, resulting
in the commingling of revenues and expenditures.
Questioned Costs: N/A
Cause: Solvista Health did not implement internal control procedures to separately identify and record
state and federal expenditures related to the Mental Health Block Grant.
Effect: Because state and federal funds were commingled, Solvista Health could not identify federal
awards received and expended under this federal program as compared to state awards received and
expended. In addition, this could cause Solvista Health compliance issues with the specific allowable cost
principles and reporting requirements of each funding source. This increases the risk of unallowable
expenditures and may result in questioned costs or repayment obligations.
Identification as a Repeat Finding: Not a repeat finding.
Recommendation: We recommend Solvista Health implement internal control procedures to establish
separate accounts, classification, use of cost centers or project codes to clearly distinguish expenditures
by funding source, as well as revenues received.