Finding Text
Allowable Costs – Nonpayroll Disbursements Federal Agency: U.S. Department of Housing and Urban Development Federal Program Name / Assistance Listing Number / Pass-Through Agency(ies) / Pass-Through Number(s): • Block Grants for Prevention and Treatment of Substance Abuse, 93.959 o Passed through the State of Connecticut, Department of Mental Health and Addiction Services, 24MHA1009 o Passed through the Commonwealth of Pennsylvania, Department of Drug and Alcohol Programs, 4100089071 o Passed through the State of Louisiana, Department of Health, 2000758195 o Passed through the State of Oklahoma, Department of Mental Health and Substance Abuse Services, B08TI083962 & B08TI084602 • COVID-19 - Substance Abuse and Mental Health Services Projects of Regional and National Significance, 93.243 o Passed through the State of California, Department of Health Care Services, 21-10299 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Criteria or specific requirement: 2 CFR Part 200.303 (a) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award, Internal Controls requires that the recipient must: “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. These internal controls should align with the guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Shatterproof should have internal controls designed and effectively operating to ensure compliance with those provisions. Condition: Shatterproof changed credit card vendors after March 2024. Documentation of electronic approvals maintained by the prior vendor were not retained or accessible during the audit. Included in these transactions was one instance where supporting documentation for the transaction was not located. Questioned costs: Total questioned costs are $53,632 and are shown by program below: • 93.959 - $7,130 $3,539 State of Connecticut, Department of Mental Health and Addiction Services $1,773 Commonwealth of Pennsylvania, Department of Drug and Alcohol Programs $155 State of Louisiana, Department of Health $1,663 State of Oklahoma, Department of Mental Health and Substance Abuse Services • 93.243 $46,502 State of California, Department of Health Care Services Context: Documentation of electronic approvals maintained by the prior credit card vendor were not retained or accessible during the audit. Documentation for 1 of 80 transactions tested could not be located. Cause: Approvals of credit card transactions are maintained electronically within the vendor’s system. When Shatterproof changed credit card vendors after March 2024 the electronic approvals maintained by the prior vendor were not retained and were no longer accessible by Shatterproof personnel. Effect: The lack of internal controls over these compliance requirements provides an opportunity for noncompliance and questioned costs. Repeat Finding: The finding is a modified repeat of findings in the immediately prior year. Prior year finding numbers were 2023-008 and 2023-009. Recommendation: We recommend Shatterproof ensure internal controls are in place and operating effectively so that when changes in vendors involved in the financial reporting process occur there is an evaluation of the electronic evidence of the performance of internal controls and other data to ensure needed documentation is retained or continues to be accessible in line with their record retention policies and requirements of the grant agreements. Views of responsible officials: There is no disagreement with the audit finding.