Finding 1157639 (2024-002)

Finding 2024-002: Block Grant - Reporting (Material Weakness) Federal Programs: Social Services Block Grant, Block Grants for Community Mental Health Services Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: Pennsylvania Department of Human Services ALN Number: 93.667 and 93.958 Federal Award Year: December 31, 2024 Repeat Finding: 2023-002 Criteria: The county program is responsible for the submission of various annual reports, as detailed in the Annual Instructions for the Income and Expenditure Report. Funds not expended at the end of the fiscal year shall be considered unexpended funds (carryover) available for consideration by PA DHS in the computation of the next fiscal year's payment (Pa. Code Title 55, Chapter 4300, Section 4300.151). Condition/Context: The block grant reporting submission for the fiscal year ended June 30, 2024 (2023-2024 fiscal year) was not completed as of the year ended December 31, 2024. The retained earnings plan of up to 5% of the PA DHS block grant allocation was not completed for the fiscal year ended June 30, 2024 as of December 31, 2024. Cause: Block grant reporting was not completed during the accounting record close process, resulting in expenditures reported in the block grant submission that were not in the accounting detail. Effect: Expenditures reported under block grant reporting are not substantiated by the underlying accounting records. Block grant expenditures were incorrectly stated. Questioned Costs: There are no questioned costs associated with federal fund expenditures for this finding. This is not a statistically valid sample. Recommendation: Block grant reports should be completed prior to the accounting record close process to ensure the expenditures reported are supported by the underlying accounting records. Controls over reporting should include records for the basis of reporting submissions should be reviewed as part of the report approval process prior to submission. Supporting documentation and reconciliations should be filed for reference purposes. Views of Responsible Officials and Planned Corrective Actions: The Department of Human Services received approval from the PA DHS in February 2025 for its 2021–2022 HSBG Income & Expenditure (I&E) Report, Revision 3, which had been submitted in January 2025. At the State’s request, the Agreed Upon Procedures report was submitted in August 2025 for fiscal year 2021-2022 and has since been approved. The journal entries reconciling the underlying expenditure detail in the County’s accounting system to the expenditures reported have been submitted, and the final reconciliation is in process. Retained Earnings Plans were submitted to the State in February and March 2024. The County completed submission of the 2022–2023 HSBG I&E Report in March 2025, with a revised version submitted in September 2025. The State is currently reviewing the report. Upon approval, the AUP will be completed, and the County will reconcile the detailed expenditures in the accounting system to the amounts reported, ensuring accuracy and compliance. The 2023–2024 HSBG I&E Report was submitted in September 2025. The County is finalizing the 2024–2025 HSBG I&E Report and anticipates submission by October 2025.