Finding Text
Assistance Listing, Federal Agency, and Program Name - 93.224, U.S. Department of Health and Human Services, Health Center Program, COVID-19 Health Center Program; 93.527, U.S. Department of Health and Human Services, COVID-19 Grants to New and Expanded Services Under the Health Center Program Federal Award Identification Number and Year - H80CS24134, 2020; H8FCS40356, 2021; H8GCS48255, 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-005 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In accordance with the declaration and certification made to the U.S. Department of Health and Human Services at the time of drawdown and the Organization's internal policy, the Organization must either: a) (reimbursement method) ensure the request is accurate and complete, all obligations, expenditures, and cash receipts are supported by the requisite accounting records, and all costs included in the requisition are reasonable, allowable, and allocable to the award, or b) (advance method) disburse funds for costs that are reasonable, allowable, and allocable to the award within three business days or immediately return the funds. Condition - The Organization maintains and tracks Federal expenditures incurred for the year in totality; however, it does not maintain adequate records to track the costs applied to each individual drawdown made throughout the year. Without this linkage, the timeliness between drawdown and either when the expenditures for goods or services were incurred or when the disbursement occurred in relation to the drawdown cannot be validated. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During cash management testing, supporting documentation to identify the costs applied to each drawdown was not maintained for 4 samples tested. During allowability testing, none of the payroll costs for 9 individuals charged to the grant nor the 10 nonpayroll transactions tested could be traced to a specific drawdown to validate that the cost was incurred prior to the date of reimbursement or paid within 3 days of advanced funding. However, in total for the year, the Organization was able to support the draws received with a detailed listing of Federal expenditures as reported on the SEFA. Cause and Effect - Insufficient controls are in place over cash management. As a result, cash drawdowns were made throughout the year with no linkage to specific Federal expenditures, and thus, the Organization cannot demonstrate compliance with Federal payment requirements, as certified to the funding agency. Recommendation - We recommend the Organization implement a set of internal controls over cash management, including layers of review, to ensure supporting documentation can be linked to Federal expenditures. Views of Responsible Officials and Planned Corrective Actions - The Organization will implement controls, including layers of review, to ensure supporting documentation to link Federal expenditures to each drawdown is maintained and the timely disbursement of funds received.