Finding Text
Type of finding: Significant Deficiency in Internal Control over Compliance - Reporting Summary: This finding is considered to be a significant deficiency in internal controls which affects the entity as a whole, including its federal awards. Refer to the Financial Statement Findings section above for further information regarding this finding. Questioned costs: None. Criteria: The objective of the Assistance Listing 93.912, RHSP, is to improve services for substance use disorder (SUD) and opioid use disorder (OUD) through prevention, treatment, and recovery services. Management is responsible for establishing and maintaining internal controls, including formal policies and procedures for the review and approval of journal entries, adjustments to expenditures, and account reconciliations, to ensure expenditures reported to granting agencies are complete, accurate, allowable, and properly supported. Context: During our audit, we noted that the Organization did not maintain a formal, documented process for the review and approval of manual journal entries, expenditure adjustments, or account reconciliations. Although certain review procedures may have been performed, the reviews were informal and not consistently documented to evidence who reviewed the items, when the review occurred, or whether exceptions were resolved. Cause: The Organization had limited staffing and did not formally assign or document independent review responsibilities for journal entries, expenditure adjustments, and account reconciliations, which limited its ability to maintain adequate segregation of duties and consistent evidence of review. Effect: The absence of formal review and approval controls over journal entries, expenditure adjustments, and account reconciliations increases the risk that unallowable, unsupported, inaccurate, or improperly classified costs may be reported to federal agencies and not be detected in a timely manner. Recommendation: We recommend that management implement and document a formal review and approval process for manual journal entries, expenditure adjustments, and account reconciliations. The process should identify the preparer and reviewer, require dated evidence of review, document resolution of exceptions, and include a final review before grant reports are submitted. View of Responsible Officials: There is no disagreement with this audit finding.