Finding Text
Program Information: Assistance Listing #: 93.445 U.S. Department of Health and Human Services I.H.S. Water Tank Replacement Award Numbers: PH12-U35, RN0222 Award Periods: 7/29/2021-7/29/2025 Criteria: 2 CFR § 200.305(b) - Federal Payment (Cash Management) requires that non-federal entities receiving federal awards minimize the time elapsing between the transfer of federal funds and the disbursement of those funds for program purposes. Advance payments must be limited to the minimum amounts needed and timed to meet the recipient’s actual and immediate cash requirements. Entities must maintain written procedures and financial management systems that provide for appropriate fund control and accountability. 2 CFR § 200.303 - Internal controls states, the non-federal entity must: (a) Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal 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 guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition/Context: During testing, we noted the following: 93.445 • For 2 of 2 samples, we were not provided documentation to verify that the expenditures were incurred prior to the date of the reimbursement request. • For 2 of 2 samples, there was no documentation of review and approval of the reimbursement requests. [ X ] Compliance Finding [ ] Significant Deficiency [ X ] Material Weakness Cause: The Tribe did not have adequate procedures in place to ensure that supporting documentation for reimbursement requests, including documentation demonstrating that expenditures had been incurred and evidence of management review and approval, was consistently maintained. Turnover in management likely contributed to the lack of record retention. Effect: Without adequate supporting documentation, the Tribe was unable to demonstrate that federal reimbursement requests were limited to expenditures incurred prior to requesting reimbursement. Additionally, the lack of documented review and approval increases the risk that unsupported, inaccurate, or otherwise unallowable amounts could be requested for reimbursement and not be detected and corrected in a timely manner. Questioned Costs: None. Although sufficient documentation was not provided to verify that expenditures were incurred prior to the reimbursement requests, no specific unallowable costs were identified as a result of audit procedures. Repeat Finding: No. Recommendation: We recommend that the Tribe follow its policies and procedures and establish procedures as needed requiring each federal reimbursement request to be supported by documentation demonstrating that the related expenditures were incurred prior to the reimbursement request. We further recommend that reimbursement requests be reviewed and approved by an appropriate individual prior to submission, with evidence of the review and approval documented and retained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.