Finding Text
Finding Number: 2024-008 Cash Management Cost reimbursement reports not maintained – Material weakness in internal controls, material noncompliance Assistance Listing Number: 93.193 Program Title: Urban Indian Health Services Federal Agency: U.S. Department of Health and Human Services Award Number: H722IHS0128-22-00 Pass-Through Entity: Indian Health Services Criteria: The Uniform Guidance at 2 CFR § 200.302(a) requires non-Federal entities to maintain financial management systems that provide accurate, current, and complete disclosure of financial results. Additionally, 2 CFR § 200.334 requires retention of financial records, including reports submitted to the grantor, for a period of three years. Condition: As a result of auditor testing, it was found that NACA did not retain copies of cost reimbursement reports submitted to the grantor for the Urban Health Clinic/Substance Abuse Prevention and Title V contracts. As a result, auditors were unable to verify amounts reported or reconcile reported amounts to NACA’s accounting records. Also, NACA did not have internal controls in place to ensure that copies of cost reimbursement reports submitted to the grantor for the Urban Health Clinic/Substance Abuse Prevention and Title V contracts were maintained for internal records. Cause: NACA lacked procedures to ensure that financial reports submitted for reimbursement were retained in accordance with Federal record retention requirements. Effect: Failure to retain cost reimbursement reports increases the risk of noncompliance with Federal requirements and limits NACA’s ability to support amounts requested for reimbursement. This also impacts transparency and auditability of financial activity. Recommendation: We recommend that NACA implement a process to ensure all cost reimbursement reports are retained and properly organized. This should include establishing a centralized recordkeeping system and periodic review procedures to confirm completeness of financial reporting documentation. Views of responsible officials: NACA concurs with the recommendation.