Finding Text
Federal Agency: U. S. Department of Health and Human Services Cluster: Health Centers Clusters AL No.: 93.224 Program Title: Community Health Centers Area: Allowable Costs/Cost Principles Repeat Finding from Prior Audit? Yes Finding Type: Material Weakness in Internal Control over Compliance Questioned Cost: Unable to be determined due to discrepancies between the Schedule of Expenditures of Federal Awards and the grant expense schedule, which prevented the identification of a complete and accurate population of expenditures for testing. Criteria: Under Uniform Guidance (2 CFR Part 200, Subpart E), costs charged to federal awards must be allowable, allocable, reasonable, and adequately documented. Nonfederal entities must maintain sufficient records to support expenditures charged to federal programs. Condition: No expenditure selections were tested for cost principle compliance. The auditors were unable to identify a reliable population of expenditures for this program due to discrepancies between the SEFA and the underlying grant expense records. Cause: The SEFA for AL No. 93.224 did not reconcile to the grant expense records, and supporting documentation for program-specific expenditures was not sufficiently available. In addition, the absence of a formal turnover of accounting and grant records following personnel changes limited the availability of information necessary to identify a complete and accurate population for testing. Effect: Because no expenditures were tested, the auditors were unable to determine whether costs charged to AL No. 93.224 complied with applicable cost principles. This increases the risk that unallowable or unsupported costs may have been charged to the program and weakens internal controls over compliance with federal cost requirements. Recommendation: Kagman Community Health Center, Inc. should strengthen internal controls over federal cost compliance by: 1. Ensuring that expenditures charged to each federal program are accurately tracked, documented, and reconciled to the SEFA and accounting records. 2. Maintaining adequate supporting documentation to substantiate allowability, allocability, and reasonableness of costs charged to federal programs. 3. Implementing supervisory review procedures to ensure program-specific expenditures are complete, accurate, and available for audit review. Views of the Officials: Kagman Community Health Center, Inc.’s response is documented in the corrective action plan.