Finding Text
2022-005 — Activities Allowed and Unallowed and Allowable Costs/Cost Principles (Significant Deficiency) Federal Program Information: Funding agency: U.S. Department of Health and Human Services Title: Provider Relief Fund and American Rescue Plan Rural Distribution Assistance listing number: 93.498 Award year: 2022 Award period: 2022 Criteria: The Uniform Guidance 2 CFR 200.302 requires that organizations maintain complete and detailed records that document the source and application of federal funds. Adequate recordkeeping is essential for financial accountability and compliance with accounting standards. Condition/Context: Of a sample of 25 transactions charged to the major program, 5 of the sampled transactions lacked itemized source documentation (such as receipts or invoices), 10 transactions lacked reconciliations tying expense to source documentation, and 3 transactions lacked evidence of review and approval by appropriate personnel. Cause: The Hospital experienced turnover and extended vacancies in key finance department positions. This contributed to insufficient oversight and a lack of adherence to internal controls over recordkeeping and expenditure approvals. Effect: The absence of itemized receipts and evidence of review and approval hinders the ability to verify the legitimacy and appropriateness of these transactions. This raises concerns about the accuracy of financial reporting and compliance with accounting standards and the Uniform Guidance and may increase the risk of questioned costs or ineligible expenditures going undetected. Questioned Costs: None. Recommendation: Management should enforce existing internal control procedures to ensure that all transactions are adequately documented with itemized receipts and properly reviewed and approved. Training should also be provided to staff responsible for recordkeeping to emphasize requirements for maintaining detailed documentation in accordance with Uniform Guidance. Views of Responsible Officials: Management will enforce existing internal control procedures and train staff to maintain appropriate documentation.