Finding 1216066 (2025-002)

Department of Health and Human Services Federal Assistance Listing #93.912 Rural Healthcare Services Programs Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance Significant Deficiency in Internal Control Over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: BHD, LLC did not retain documentation of the review and approval of all direct expenditures allocated to the program. Cause: BHD, LLC did not have an adequate internal control process in place to ensure review and approval of all expenditures were documented. Effect: The lack of adequate policies governing the recording of expenditures to the program increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: A nonstatistical sample of 60 direct expenditures were selected for testing. Of these, 6 did not show evidence of proper review and approval prior to being allocated to the federal program. Repeat Finding from Prior Years: No Recommendation: We recommend BHD, LLC enhance internal control procedures to ensure all direct expenditures recorded to the program have documented review and approval. Views of Responsible Officials: Management agrees with the finding.