Finding Text
Finding 2025-002: Substance Abuse and Mental Health Services - Projects of Regional and National Significance, Federal Assistance Listing Number 93.243 Criteria: Federal Financial Reports (SF-425s) are required to be submitted by the reporting due dates specified in the award agreements and to be prepared in accordance with applicable federal requirements, award terms and conditions, and reporting instructions. Reports must accurately reflect grant activity through the reporting period end date and include only applicable reporting elements. Condition: The Organization submitted SF-425s for the Program that were not prepared in accordance with federal reporting requirements and were not submitted within the required reporting deadlines. Specifically, expenditures reported on one of the two SF-425 filed during the audit period reflected only activity incurred during the current reporting period rather than cumulative expenditures from the beginning of the award through the reporting period end date as required. In addition, amounts were reported within the recipient share and program income sections of the SF-425s despite not being applicable to the Organization during the reporting periods. Questioned Costs: There were no questioned costs, this finding relates to reporting. Context: The two annual SF-425s tested contained inaccurate financial information when compared to the Organization's accounting records and grant activity and were not filed by the applicable reporting due date. Cause: Management did not maintain adequate procedures to ensure SF-425s were prepared accurately and submitted timely. Review procedures were not sufficient to verify that expenditures were reported on the required cumulative basis, that nonapplicable reporting elements were excluded, and that reporting deadlines were monitored and met. Effect: The awarding agency received reports that were submitted after required due dates and contained inaccurate information regarding grant activity. Although expenditures incurred, cash draws, and other compliance requirements tested were determined to be accurate and no questioned costs were identified, inaccurate reporting could impair the awarding agency's ability to effectively monitor grant activity and financial status. Recommendation: We recommend management contact the awarding agency and, if permitted, amend the affected SF-425s to accurately reflect cumulative expenditures and remove incorrectly reported recipient share and program income amounts. In addition, management should strengthen its grant reporting procedures to ensure future Federal financial reports are prepared completely and accurately, reconcile to underlying accounting records, and are submitted within required deadlines. Views of Management and Planned Corrective Action: Management agrees with the finding noted above. Management intends to amend the reports, if permissible, to accurately reflect the federal financial information and implement additional review procedures to ensure timeliness of future federal reporting submissions.