Finding 1176971 (2023-005)

Material Weakness Repeat Finding
Requirement
B
Questioned Costs
-
Year
2023
Accepted
2026-03-09
Audit: 390799
Organization: Papa Ola Lokahi (HI)
Auditor: KKDLY LLC

AI Summary

  • Core Issue: The Organization failed to consistently retain documentation proving contractor performance as required by federal guidelines.
  • Impacted Requirements: This finding violates the Uniform Guidance, which mandates retaining records for three years after the final expenditure report.
  • Recommended Follow-Up: Update policies and procedures to ensure proper documentation is collected and maintained to support contractor performance compliance.

Finding Text

Material Weakness Finding No. 2023-005: Document Retention U.S. Department of Education Native Hawaiian Education Act Program Federal Assistance Listing Number 84.362A. U.S. Department of Health and Human Services Health Care for Native Hawaiians Federal Assistance Listing Number 93.932. Criteria Pursuant to Title 2, Subtitle A Chapter II, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), §200.334, “Financial records, supporting documents, statistical records, and all other non-Federal records must be retained for a period of three years from the date of submission of the final expenditure report…” Condition We noted that the Organization did not consistently retain documentation substantiating contractor performance of services was in accordance with the terms and conditions of the contract. Cause The Organization’s policies and procedures do not include specific requirements to ensure that pertinent supporting documents are obtained and retained to evidence contractor performance of services pursuant to Federal requirements. Effect The lack of supporting documents for contractor expenditures as stipulated by Uniform Guidance could result in noncompliance of Federal record retention polices by the Organization. Recommendation We recommend that the Organization incorporate policies and procedures to ensure the maintenance of adequate documentation to support contractor performance of services pursuant to contract terms.

Corrective Action Plan

Views of Responsible Officials and Planned Corrective Action The Organization understands the criteria cited re: Title 2, Subtitle A Chapter II, Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the Uniform Guidance), §200.334, requiring “Financial records, supporting documents, statistical records, and all other non-Federal records must be retained for a period of three years from the date of submission of the final expenditure report…”, and recommendation made. However, because two programs are listed U.S. Department of Education and the U.S. Department of Health and Human Services, the Organization will work with the auditors to: A. Better understand the findings (i.e., inconsistent document retention substantiating contractor performance of services) identified by the field work and expenditure and contractor testing, as it relates to which program, and which subrecipient contractor the findings relate to; B. Clarify the specific source and subcontractor awarding and payment criteria as noted in the Organization’s award and sub-award criteria, and subsequently reflected in the subcontractor contract(s); C. Analyze the findings to identify root causes and/or conditions in related contract monitoring processes that resulted in inconsistent document retention practices; and D. Address and implement corrective actions through identified needs (e.g., policy development and implementation, contract monitoring processes and procedures). The Organization will prioritize the above with the auditors as soon as possible, so the appropriate corrective actions can be addressed.

Categories

Allowable Costs / Cost Principles Material Weakness Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 1176963 2023-002
    Material Weakness Repeat
  • 1176964 2023-003
    Material Weakness Repeat
  • 1176965 2023-004
    Material Weakness Repeat
  • 1176966 2023-005
    Material Weakness Repeat
  • 1176967 2023-006
    Material Weakness Repeat
  • 1176968 2023-002
    Material Weakness Repeat
  • 1176969 2023-003
    Material Weakness Repeat
  • 1176970 2023-004
    Material Weakness Repeat
  • 1176972 2023-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.932 NATIVE HAWAIIAN HEALTH CARE SYSTEMS $5.61M
84.362A NATIVE HAWAIIAN EDUCATION $711,178
93.011 NATIONAL ORGANIZATIONS FOR STATE AND LOCAL OFFICIALS $143,172
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $117,660
93.387 NATIONAL AND STATE TOBACCO CONTROL PROGRAM $110,263
93.426 THE NATIONAL CARDIOVASCULAR HEALTH PROGRAM $72,971
93.185 IMMUNIZATION RESEARCH, DEMONSTRATION, PUBLIC INFORMATION AND EDUCATION TRAINING AND CLINICAL SKILLS IMPROVEMENT PROJECTS $56,604
93.859 BIOMEDICAL RESEARCH AND RESEARCH TRAINING $35,481
93.421 STRENGTHENING PUBLIC HEALTH SYSTEMS AND SERVICES THROUGH NATIONAL PARTNERSHIPS TO IMPROVE AND PROTECT THE NATION’S HEALTH $30,763
45.311 NATIVE AMERICAN AND NATIVE HAWAIIAN LIBRARY SERVICES $24,589
93.334 THE HEALTHY BRAIN INITIATIVE: TECHNICAL ASSISTANCE TO IMPLEMENT PUBLIC HEALTH ACTIONS RELATED TO COGNITIVE HEALTH, COGNITIVE IMPAIRMENT, AND CAREGIVING AT THE STATE AND LOCAL LEVELS $9,374