FAC Explorer

Finding 1239330 (2025-006)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2025
Accepted
2026-09-30
Audit: 414174
Organization: Atrium Health, Inc. (NC)
Auditor: ERNST AND YOUNG LLP

AI Summary

  • Core Issue: Atrium Health CMHA lacks proper internal controls to retain documentation for FEMA expenditure reviews, risking inaccuracies in reimbursement claims.
  • Impacted Requirements: This finding violates Section 200.303 of the Uniform Guidance, which mandates effective internal controls for managing federal awards.
  • Recommended Follow-Up: Implement stronger internal controls that ensure all supporting documentation for FEMA expenses is retained and properly reviewed.

Finding Text

Finding 2025-006 | Information on the Federal Program: Federal Agency: Department of Homeland Security. Assistance Listing No.: 97.036 COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (FEMA). Pass-Through: North Carolina Department of Public Safety. Pass-Through Award Number: N/A. Pass-Through Award Period of Performance: 1/1/2021 through 7/1/22 and 7/2/22 through 5/11/23. Criteria or Specific Requirement (Including Statutory, Regulatory or Other Citation): Section 200.303 of the Uniform Guidance states the following regarding internal control: “The non-Federal entity must: (a) Establish, document, and maintain effective internal control over the Federal award that provides reasonable assurance that the recipient or subrecipient is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should align with the 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: Atrium Health CMHA’s internal controls were not suitably designed to retain all supporting documentation over their review and approval of FEMA federal expenditures. Cause: Atrium Health CMHA’s management designed a process to accumulate and review expenditures related to the FEMA award; however, for certain components of the review and approval the supporting documentation was not retained to evidence that the internal review was sufficiently designed and operating effectively throughout the process. Effect or Potential Effect: The amounts submitted for reimbursement and the FEMA reports submitted could be inaccurate or incomplete. Questioned Costs: None. Context: Atrium Health CMHA developed protocols of what expenses should be charged to the Presidentially Declared Disaster grant and communicated these protocols to the appropriate levels of management. Management then developed a process to review the costs and determine which ones were applicable to the Presidentially Declared Disaster grant. However, management did not maintain evidence supporting the approval of expenses under the Presidentially Declared Disaster grant terms. Total federal expenditures for Assistance Listing 97.036 recorded on the Schedule totaled $17,296,769 for the year ended December 31, 2025. Identification as a Repeat Finding, if Applicable: This is a repeat finding of 2024-006 from the previous year. Recommendation: Atrium Health CMHA should design and implement internal controls that are sufficiently precise and require supporting documentation be retained over the review and approval of FEMA expenses. Section III – Federal Award Findings and Questioned Costs (continued). Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding.

Corrective Action Plan

Finding 2025-006: Information on the Federal Program: Disaster Grants – Public Assistance | Name of Contact Person: Anthony Gattuso, Vice President Accounting Operations | Corrective Action Plan: Atrium Health CMHA management has enhanced the FEMA expenditure review and approval process by implementing procedures to ensure all supporting documentation related to the review, approval, and monitoring of FEMA-funded expenditures is retained in a centralized and accessible location. Management established documentation requirements and provided guidance to responsible personnel to ensure sufficient evidence is maintained to demonstrate that controls have been performed and reviewed as designed. Periodic monitoring will be conducted to verify compliance with these documentation retention requirements. | Proposed Completion Date: Completed July 2025.

Categories

Subrecipient Monitoring Cash Management Period of Performance Matching / Level of Effort / Earmarking Internal Control / Segregation of Duties

Other Findings in this Audit

  • 1239318 2025-001
    Material Weakness Repeat
  • 1239319 2025-001
    Material Weakness Repeat
  • 1239320 2025-002
    Material Weakness Repeat
  • 1239321 2025-002
    Material Weakness Repeat
  • 1239322 2025-003
    Material Weakness Repeat
  • 1239323 2025-003
    Material Weakness Repeat
  • 1239324 2025-004
    Material Weakness Repeat
  • 1239325 2025-004
    Material Weakness Repeat
  • 1239326 2025-005
    Material Weakness Repeat
  • 1239327 2025-005
    Material Weakness Repeat
  • 1239328 2025-006
    Material Weakness Repeat
  • 1239329 2025-006
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
84.268 FEDERAL DIRECT STUDENT LOANS $2.14M
84.063 FEDERAL PELL GRANT PROGRAM $1.21M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $194,284
16.575 CRIME VICTIM ASSISTANCE $159,191
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $134,535
93.788 OPIOID STR $115,998
93.173 RESEARCH RELATED TO DEAFNESS AND COMMUNICATION DISORDERS $115,617
16.753 CONGRESSIONALLY RECOMMENDED AWARDS $66,902
93.RD A Phase II, Single-Stage, Single Arm Investigation of Oral Valganciclovir Therapy in Infants with Asymptomatic Congenital Cytomegalovirus Infection $37,305
93.RD AWD00002326 NCI A022104 CLT $34,031
93.145 HIV-RELATED TRAINING AND TECHNICAL ASSISTANCE $30,925
93.078 STRENGTHENING EMERGENCY CARE DELIVERY IN THE UNITED STATES HEALTHCARE SYSTEM THROUGH HEALTH INFORMATION AND PROMOTION $28,732
93.847 DIABETES, DIGESTIVE, AND KIDNEY DISEASES EXTRAMURAL RESEARCH $21,872
93.RD Impact of the COVID-19 pandemic, SARS-CoV-2 $17,941
93.RD AWD00002145 Kaplan CMHA ASCT2031 $16,598
93.RD S2308_CLT_AWD00002717 $13,503
93.837 CARDIOVASCULAR DISEASES RESEARCH $12,344
93.399 CANCER CONTROL $11,904
93.RD SWOG $11,856
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $11,563
93.RD ALLIANCE for Clinical Trials in Oncology $11,436
14.251 ECONOMIC DEVELOPMENT INITIATIVE, COMMUNITY PROJECT FUNDING, AND MISCELLANEOUS GRANTS $8,595
93.RD NMDP Adults Registry $7,969
93.RD CIBMTR Registry $7,783
93.RD NMTRC 014 $7,704
93.RD Bhutani_SWOG_S2005_CLT_AWD00002919 $6,560
93.853 EXTRAMURAL RESEARCH PROGRAMS IN THE NEUROSCIENCES AND NEUROLOGICAL DISORDERS $5,967
93.RD Rider TransIT $5,404
12.420 MILITARY MEDICAL RESEARCH AND DEVELOPMENT $5,196
93.RD A Phase 3 Study of Active Surveillance for Low Risk and a Randomized Trial of Carboplatin vs. Cisplatin for Standard Risk Pediatric and Adult Patients with Germ Cell Tumors $4,862
93.RD NMTRC012 $4,744
93.073 BIRTH DEFECTS AND DEVELOPMENTAL DISABILITIES - PREVENTION AND SURVEILLANCE $4,010
93.RD AREN1921 $3,836
93.RD A Randomized Phase III Trial of Consolidation with Autologous Hematopoietic Cell Transplantation Followed by Maintenance Rituximab vs. Maintenance Rituximab Alone for Patients with Mantle Cell Lymphoma In Minimal Residual Disease-Negative First $3,332
93.RD A222004 $3,266
93.RD AWD00002605 Kaplan NCI COG ANBL2131 $2,827
93.395 CANCER TREATMENT RESEARCH $2,783
93.855 ALLERGY AND INFECTIOUS DISEASES RESEARCH $2,566
93.110 SPECIAL PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $2,389
93.866 AGING RESEARCH $1,911
12.300 BASIC AND APPLIED SCIENTIFIC RESEARCH $1,716
93.RD Sickle Cell #1507 $1,035
93.262 OCCUPATIONAL SAFETY AND HEALTH PROGRAM $849
93.394 CANCER DETECTION AND DIAGNOSIS RESEARCH $783
93.RD National Experimental Therapeutics Consortium $724
93.RD ECOG-ACRIN - EA1141 $685
93.RD ANBL1531 $630
93.RD LCCC1317 $621
93.RD APEC1621_COG MATCH $547
93.RD MYELOMATCH_AWD00002888 $502
93.RD ARST2031 $500
93.RD ACNS1931 $434
93.RD Knight_Thomas_NCI_MM1YA-CTG01-CLT $417
93.137 COMMUNITY PROGRAMS TO IMPROVE MINORITY HEALTH $380
93.667 SOCIAL SERVICES BLOCK GRANT $228
93.RD ALTE1631 $210
93.RD C11173_BMT CTN2207_CLT $206
93.RD AHOD1331 $144
93.RD AGCT1532 $129
93.RD ARST2032 $129
93.RD A021806 $116
93.RD MMRC-089 $93
93.839 BLOOD DISEASES AND RESOURCES RESEARCH $43
93.360 BIOMEDICAL ADVANCED RESEARCH AND DEVELOPMENT AUTHORITY (BARDA), BIODEFENSE MEDICAL COUNTERMEASURE DEVELOPMENT $-4,155
93.310 TRANS-NIH RESEARCH SUPPORT $-13,543
93.865 CHILD HEALTH AND HUMAN DEVELOPMENT EXTRAMURAL RESEARCH $-53,508