Finding Text
Finding 2024-009 U.S. Department of Health and Human Services Assistance Listing Number 93.224, 93.527 – Health Center Program Cluster Material Weakness and Noncompliance over Cash Management Repeat Finding: No Criteria: In accordance with 2 CFR 200.302: Financial management, each recipient must expend and account for the federal award in accordance with state laws and procedures for expending and accounting for the recipient’s own funds. In addition, the state’s and the other non-federal entity’s financial management systems, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to the federal statutes, regulations, and the terms and conditions of the federal award. Condition and Context: For 1 out of 3 selections, we were unable to agree the drawdown amount to the general ledger to ensure funds were expended prior to requesting reimbursement. Additionally, for 1 out of 3 selections, there was a misapplied payment and incorrect drawdown was requested. Cause: Controls surrounding the cash drawdown process are not operating effectively. Expenditures are not reviewed prior to submission of request. Management could not reconcile information presented in the expenditure report to the underlying records. Effect or Potential Effect: Expenditures reported to the federal government could be inaccurate. Questioned Costs: Unknown. Recommendation: We recommend that the City review policies, procedures and practices in place to ensure drawdowns are reconciled to the general ledger, and reviewed and approved before requests have been submitted. Views of Responsible Officials: Management agrees with the finding. Refer to the Corrective Action Plan Section of this report.