Finding Text
Finding Number: 2024-005 Procurement and Suspension and Debarment (Material Weakness) Information on Federal Program: U.S. Department of Health and Human Services ALN Number: 93.676 ALN Name: Unaccompanied Children Program Contract Period: July 1, 2023 through June 30, 2024 Criteria: The Uniform Guidance Section §200.317 states that the same policies and procedures used for procurements with non-federal funds must be followed when conducting procurement transactions under a federal award. Condition: During our audit, we noted that management’s method of allocating shared costs is performed after the fiscal year has ended, instead of performing timely allocations monthly throughout the fiscal year. Due to this allocation approach we were unable to obtain the procurement transactions that pertain only to the federal program during the year for our procurement policy testing population. Therefore, we selected ten samples from all transactions during the fiscal year based on Lincoln Hall’s procurement policy thresholds. Questioned Costs: Not determinable. Context: This is a condition identified per our compliance testing of procurement. Effect or Potential Effect: We were unable to identify the procurement transactions that pertain only to the federal program and therefore, we were unable to conclude whether awards for this program were used for purchases subject to the procurement policy in place. Repeat Finding: This is a repeated finding from prior year. See Finding No. 2023-006 on the Summary Schedule of Prior Audit Findings. Cause: Bidding and procurement requirements were not met due to the turnover at Lincoln Hall as well as system limitations on allocations. Recommendation: The inability to generate financial statements that incorporate the federal and state agency cost allocations prevents Lincoln Hall from presenting functionally accurate interim financial statements. We recommend that these costs be properly allocated on a monthly basis within Lincoln Hall’s general ledger system. Allocating these costs regularly will allow Lincoln Hall to submit accurate and substantiated interim financial data to its funding sources. Additionally, properly tracking and allocating costs on a monthly basis will prevent a material reallocation of costs by function at year-end. Views of Responsible Official: Lincoln Hall agrees with the finding. Lincoln Hall continues to take steps to improve this process. See Lincoln Hall’s further response to this finding as described in the accompanying management’s planned corrective actions, Appendix A.