Finding Text
Controls Over Federal Programs U.S. Department of Health and Human Services 93.958 – Block Grants for Community Mental Health Services Activities Allowed/Allowable Costs – Significant Deficiency – Internal Control Finding Conditions: The Organization did not have adequate controls over the reporting or expending of Federal Funds. Criteria: Per the Organization’s fiscal policies, purchase orders/credit card payments or cash payment forms are signed by supervisor and CFO noting approval of expenses. Payroll registers are signed as reviewed and approved by CFO. Context: 60 out of 60 selections for testing did not have documented control procedures. Payroll expenses did not tie to distribution reports, there was no documented review of payroll throughout the year, and large reallocations were made after year end based on estimated time and effort to programs. No documentation was maintained for the rationale of these reallocations other than approval by CEO. Invoices were not coded and there was no documentation of review of allocations to Federal Award Programs. 3 of 60 selections tested did not have underlying support. Cause: The Organization did not follow control procedures routinely and has not adopted sufficient relevant controls over the accounting of Federal Expenditures. Effect: Expenses may not be allocated correctly, and payroll expenses were required to be allocated across multiple programs after year end. Repeat: Repeat finding of 2023-007. Recommendation: RBT recommends that the Organization require support for all expenses coded to Federal Awards to be reviewed for proper allocation, period of performance and allowability of the expense. RBT also recommends that payroll allocations are reviewed regularly and updated in the payroll system and the accounting system. Payroll allocations should be based on actual hours worked or documented time studies. Documentation of review and approvals of these control procedures should be maintained on file. Management Response: See Corrective Action Plan.