Finding Text
Program Information: See the Corrective Action Plan for chart/table Criteria or specific requirement: Per 2 CFR § 200.303 Internal controls, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with 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). Indian Health Services, 42 CFR 136.61, requires the Department to bill third-party insurance for services provided and use the income for health care or health care related activities. Condition/Context: The Department was unable to provide support for program income to ensure they were spending third-party funds on allowable costs for the following: • 13 of 13 Individually Important Items (IIIs) did not have support provided. • 19 of 19 non-payroll samples did not have support provided. • 41 of 41 payroll samples did not have timesheets or PAN's provided. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Cause: The Department did not implement adequate internal controls to track, review, and retain documentation for expenditures funded with program income. Effect: Without documentation we were unable to determine whether program income is being used for allowable activities. Additionally, lack of sufficient documentation may cause the funding agency to question costs. Questioned Costs: Known - $525,194 Repeat Finding: Yes – 2021-012. Recommendation: We recommend the Department continue to strengthen and reinforce its internal control policies and procedures and to ensure that monthly accounting reconciliations are performed and reviewed timely to produce accurate financial data related to third-party income and related expenses. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.