Finding Text
Department of Health and Human Services
Federal Assistance Listing/CFDA #93.498
Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Applicable Federal Award Number and Year – Period 1 TIN #870212456
Activities Allowed or Unallowed and Allowable Cost/Cost Principles
Significant Deficiency in Internal Control Over Compliance and Noncompliance Not
Considered Material
Criteria: CFR 200.303(a) establishes that the auditee must establish and maintain effective
internal control over the federal award that provides assurance that the entity is managing
the federal award in compliance with federal statutes, regulations, and conditions of the
federal award.
Condition: The District claimed and reported expenditures that contained errors based upon
the underlying documentation. Additionally, the District did not have internal controls in
place to review and approve allowable expenditures separate from the preparer.
Cause: The District had multiple individuals identifying and compiling eligible costs,
however, the District did not have an internal control process in place to ensure a secondary
review and approval of eligible expenditures that were summarized from the underlying
supporting spreadsheets to the final expenditure listing. The summary spreadsheet was
used to claim allowable costs under the federal program. Additionally, not all supporting
documentation was retained.
Effect: There is a potential that costs may be claimed and reported are not allowable or
amounts claimed may not be supported during a subsequent examination.
Questioned Costs: None reported.
Context: A nonstatistical sample of 60 supplies, services, and payroll transactions out of a
population of approximately 1,476 totaling $3,100,530 were selected for testing. The
sample contained errors in two transactions in which the amounts claimed on the Period 1
report were not supported by invoices. The amounts claimed not supported by invoices
totaled $2,097 out of a total sample value of $2,021,539.
Repeat Finding from Prior Years: No
Recommendation: We recommend the District modify internal control policies to ensure
amounts claimed for this program agree to underlying documentation and to ensure the
records are retained to support the amounts.
Views of Responsible Officials: Management agrees with the finding.