Finding 1152111 (2024-004)

Significant Deficiency
Requirement
E
Questioned Costs
$1
Year
2024
Accepted
2025-09-05
Audit: 365678
Organization: Indiana Diaper Bank, Inc. (IN)
Auditor: Pile CPAS

AI Summary

  • Core Issue: The Organization lacks sufficient documentation and review procedures for eligibility determinations, leading to noncompliance in 3 out of 60 transactions tested.
  • Impacted Requirements: This finding violates federal compliance standards outlined in 2 CFR §200.303, which mandates effective internal controls and proper documentation retention.
  • Recommended Follow-Up: Implement a formal review process for eligibility documentation, assign clear responsibilities, and conduct periodic quality checks to ensure compliance and accuracy.

Finding Text

Finding 2024-004 Insufficient Documentation Supporting Eligibility Determination Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance Condition: The Organization uses a database to collect and store documentation related to eligibility determinations for program participants. While this tool was used consistently throughout the year, the audit identified a lack of documented review procedures to verify that eligibility criteria were appropriately assessed and that all required documentation was obtained and retained. There is no established process to review or confirm the completeness and accuracy of eligibility documentation within the database. As a result, three of the sixty transactions tested did not include sufficient documentation to support eligibility determinations, representing instances of noncompliance with the eligibility requirements under the federal program. Criteria: According to Uniform Guidance 2 CFR §200.303(a), the Organization is required to establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Further, per the federal grant award document, the eligibility documentation files must be maintained until three years has elapsed from the las payment under the grant. Cause: The deficiency appears to stem from an underdeveloped system of internal control surrounding the eligibility determination process. Although the Organization adopted a digital solution to facilitate documentation, it did not implement corresponding review or monitoring controls to ensure compliance. In addition, the absence of documented policies or assigned responsibilities contributed to gaps in oversight and follow-through. Possible of Known Effect: Due to the lack of review procedures and internal control mechanisms, the Organization did not retain adequate documentation to support eligibility determinations in 3 out of 60 transactions tested. This resulted in known compliance findings under the eligibility requirements of the federal program. In the auditor’s judgment, the combination of the control deficiencies and noncompliant transactions indicates that the Organization did not have a system of internal control in place capable of providing reasonable assurance of compliance with federal eligibility requirements, as required under 2 CFR 200.303 and the applicable program-specific provisions. Questioned Costs: Known questioned costs of $270 were identified. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization enhance its internal control structure over eligibility determination by implementing a formal review process to verify that all required documentation is obtained, reviewed, and retained in the system. Responsibilities for eligibility review should be clearly assigned, and staff should be trained to ensure that documentation standards are consistently met. Periodic quality checks or file reviews may help reinforce compliance and identify any gaps before claims are submitted or services are rendered. Views of Responsible Officials: The Organization will transition to Pantry Soft, a new CRM to centralize client records, eligibility documentation and service dates. We will include mandatory eligibility fields and document upload requirements before service can be recorded. We will develop a standardized eligibility checklist to be completed for all new and returning participants. Staff will be trained on Pantry Soft usage, eligibility requirements and document retention stands.

Categories

Questioned Costs Internal Control / Segregation of Duties Subrecipient Monitoring Eligibility Significant Deficiency

Other Findings in this Audit

  • 575666 2024-001
    Material Weakness
  • 575667 2024-002
    Material Weakness
  • 575668 2024-003
    Material Weakness
  • 575669 2024-004
    Significant Deficiency
  • 575670 2024-005
    Significant Deficiency
  • 575671 2024-001
    Material Weakness
  • 1152108 2024-001
    Material Weakness
  • 1152109 2024-002
    Material Weakness
  • 1152110 2024-003
    Material Weakness
  • 1152112 2024-005
    Significant Deficiency
  • 1152113 2024-001
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.558 Temporary Assistance for Needy Families $1.50M
93.647 Social Services Research and Demonstration $10,868