Finding Text
Finding 2025-002 Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Foster Care Title IV-E Federal Assistance Listing Number: 93.658 Compliance Requirements: Activities allowed or unallowed, Allowable costs/Cost Principles Type of Finding: Significant Deficiencies in Internal Control over Compliance Federal Award Identification Number and Year: 2201CAFOST 2025 Criteria: According to 2 CFR, Part 200.302(b)(3), recipients of federal awards are responsible for maintaining records that sufficiently identify the amount, source, and expenditure of federal funds for federal awards. These records must contain information necessary to identify federal awards, authorizations, financial obligations, unobligated balances, as well as assets, expenditures, income, and interest. All records must be supported by source documentation. Condition/Context: In connection with the Activities allowed or unallowed, and Allowable Costs/Cost Principles compliance requirements for the Foster Care Title IV-E grant, we noted that management was unable to locate 8 approved invoices out of 40 items selected for test work. Cause: Due to turnover in the accounting department, some accounting records became misplaced and current accounting staff could not locate these records. Effect or Potential Effect: Failure to ensure expenses are being accurately supported and recorded could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs: $1,204 Identification as a Repeat Finding: This finding is a repeat finding of 2024-002. Auditor's Recommendation: We recommend that management implement policies, procedures, and controls to ensure supporting documentation over expenses is properly retained and expenses charged to federal awards are accurate. Views of Responsible Officials: Management understands the critical importance of maintaining proper documentation to ensure compliance with federal program requirements. To this end, the Organization will implement and reinforce a comprehensive system for retaining all invoices, payment records, and supporting documentation associated with federal awards. Additionally, the Organization will create and maintain a clear record retention policy. Summitview Child & Family Services, Inc. Schedule of Findings and Questioned Costs Year Ended June 30, 2025 32 Invoice and Payment Documentation: All invoices related to the federal program will be promptly reviewed and approved by the appropriate personnel to ensure they reflect allowable costs under the specific terms and conditions of the award. Management will establish clear procedures for the proper recording and classification of payments, ensuring that they are linked directly to the corresponding federal program expenses. All supporting documentation (e.g., purchase orders, contracts, receipts) will be retained in electronic formats within the accounting system, in accordance with the Organization's record retention policy, ensuring availability for future audits or reviews. Retention and Accessibility: The Organization will maintain a secure, organized filing system for all invoices and payments, ensuring that each record is easily accessible for audit purposes. This system will include electronic records that are stored in a centralized database, with restricted access to authorized personnel. Retained invoices and payment documentation will be kept for the full duration required by federal regulations, typically for a period of at least seven years after the final expenditure report for the federal award has been submitted, or as otherwise required by the specific federal agency. Periodic Reviews and Monitoring: To ensure ongoing compliance, Management will perform periodic reviews of federal program expenditures and documentation. This will include random sampling of invoices and payment records to confirm that they are complete, accurate, and in compliance with federal regulations. In the event of any discrepancies or issues identified during these reviews, Management will take immediate corrective action to address the issue and prevent recurrence. By maintaining thorough records of all invoices and payments, the Organization aims to not only comply with federal audit requirements but also to ensure transparency, accountability, and sound financial management of federal funds.