FAC Explorer

Finding 1241634 (2021-007)

Material Weakness Repeat Finding
Requirement
F
Questioned Costs
-
Year
2021
Accepted
2026-11-04
Audit: 415697
Organization: Commonwealth Healthcare Corporation (MP)
Auditor: ERNST & YOUNG (CNMI) INC

AI Summary

  • Core Issue: CHCC lacks documented review and approval procedures for physical inventory results, leading to ineffective internal controls.
  • Impacted Requirements: This finding violates 2 CFR 200.303(a), which mandates effective internal control over federal awards.
  • Recommended Follow-Up: CHCC should establish and document review and approval processes for annual physical inventory inspections to ensure accurate reconciliation with property records.

Finding Text

Finding No. 2021-007 - Equipment and Real Property Management Identification of the federal program: Federal Agency: U.S. Department of Health and Human Services AL Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance Award Number: H79SM062879, H79SM081982, U79SP020710 Criteria or specific requirement (including statutory, regulatory or other citation): In accordance with 2 CFR 200.303(a), the recipient and subrecipient must 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. Condition: CHCC performed a physical inventory inspection during fiscal year 2021. However, the physical inventory documentation did not contain evidence that the inventory results and related reconciliation were reviewed and approved by authorized personnel. Cause: CHCC has not implemented documented review and approval procedures over physical inventory results and the related reconciliation to property records. Effect or potential effect: CHCC’s internal controls over the physical inventory count are not effective. Questioned Costs: There is no questioned cost as this is an internal control finding. Context: The documentation supporting the inventory count inspection during FY 2021 did not contain evidence of review or approval by the program managers or the procurement director. Identification as a repeat finding, if applicable: Finding No. 2020-007 Recommendation: CHCC should establish and document its review and approval procedures over the results of the annual physical inventory inspection, including related reconciliations, to ensure that differences identified are resolved and reconciled to the property records of each program. Views of Responsible Officials: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results.

Corrective Action Plan

Finding No.: 2021-007 AL Program: 93.243 Substance Abuse and Mental Health Services Administration Area: Equipment and Real Property Management Questioned Costs: -0- Contact Person(s): Director of Procurement and Supply and Chief Financial Officer Corrective Action Plan: CHCC concurs with the findings. CHCC updated its Capital Assets policy on June 10, 2026, to comply with the requirements of 2 CFR 200.313. Pursuant to the revised policy, CHCC will update the fixed assets listing for all the required components and proper documentation reconciliation results. Responsible Official: Director of Procurement and Supply, Director of DGFI and Chief Financial Officer Proposed Completion Date: 12/31/2026

Categories

Equipment & Real Property Management

Other Findings in this Audit

  • 1241631 2021-004
    Material Weakness Repeat
  • 1241632 2021-005
    Material Weakness Repeat
  • 1241633 2021-006
    Material Weakness Repeat
  • 1241635 2021-008
    Material Weakness Repeat
  • 1241636 2021-009
    Material Weakness Repeat
  • 1241637 2021-010
    Material Weakness Repeat
  • 1241638 2021-011
    Material Weakness Repeat
  • 1241639 2021-012
    Material Weakness Repeat
  • 1241640 2021-013
    Material Weakness Repeat
  • 1241641 2021-014
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 PROVIDER RELIEF FUND AND AMERICAN RESCUE PLAN (ARP) RURAL DISTRIBUTION $5.21M
21.027 CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY FUNDS $5.01M
97.036 DISASTER GRANTS - PUBLIC ASSISTANCE (PRESIDENTIALLY DECLARED DISASTERS) $3.63M
10.557 WIC SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN $3.62M
93.268 IMMUNIZATION COOPERATIVE AGREEMENTS $3.51M
93.323 EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ELC) $1.92M
93.243 SUBSTANCE ABUSE AND MENTAL HEALTH SERVICES PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $1.02M
93.354 PUBLIC HEALTH EMERGENCY RESPONSE: COOPERATIVE AGREEMENT FOR EMERGENCY RESPONSE: PUBLIC HEALTH CRISIS RESPONSE $1.00M
93.870 MATERNAL, INFANT AND EARLY CHILDHOOD HOME VISITING GRANT $869,181
15.875 ECONOMIC, SOCIAL, AND POLITICAL DEVELOPMENT OF THE TERRITORIES $687,143
93.136 INJURY PREVENTION AND CONTROL RESEARCH AND STATE AND COMMUNITY BASED PROGRAMS $596,181
93.104 COMPREHENSIVE COMMUNITY MENTAL HEALTH SERVICES FOR CHILDREN WITH SERIOUS EMOTIONAL DISTURBANCES (SED) $528,358
93.116 PROJECT GRANTS AND COOPERATIVE AGREEMENTS FOR TUBERCULOSIS CONTROL PROGRAMS $462,618
93.982 MENTAL HEALTH DISASTER ASSISTANCE AND EMERGENCY MENTAL HEALTH $438,257
93.889 NATIONAL BIOTERRORISM HOSPITAL PREPAREDNESS PROGRAM $432,556
93.994 MATERNAL AND CHILD HEALTH SERVICES BLOCK GRANT TO THE STATES $422,872
93.236 GRANTS TO STATES TO SUPPORT ORAL HEALTH WORKFORCE ACTIVITIES $400,328
93.217 FAMILY PLANNING SERVICES $343,159
97.088 DISASTER ASSISTANCE PROJECTS $341,416
93.069 PUBLIC HEALTH EMERGENCY PREPAREDNESS $337,474
93.959 BLOCK GRANTS FOR PREVENTION AND TREATMENT OF SUBSTANCE ABUSE $328,371
93.898 CANCER PREVENTION AND CONTROL PROGRAMS FOR STATE, TERRITORIAL AND TRIBAL ORGANIZATIONS $290,825
93.251 EARLY HEARING DETECTION AND INTERVENTION $240,262
93.665 EMERGENCY GRANTS TO ADDRESS MENTAL AND SUBSTANCE USE DISORDERS DURING COVID-19 $214,228
93.377 PREVENTION AND CONTROL OF CHRONIC DISEASE AND ASSOCIATED RISK FACTORS IN THE U.S. AFFILIATED PACIFIC ISLANDS, U.S. VIRGIN ISLANDS, AND P. R. $179,144
93.788 OPIOID STR $168,753
93.912 RURAL HEALTHCARE SERVICES PROGRAMS $147,842
93.958 BLOCK GRANTS FOR COMMUNITY MENTAL HEALTH SERVICES $143,060
93.165 GRANTS TO STATES FOR LOAN REPAYMENT $125,000
93.817 HOSPITAL PREPAREDNESS PROGRAM (HPP) EBOLA PREPAREDNESS AND RESPONSE ACTIVITIES $123,359
10.855 DISTANCE LEARNING AND TELEMEDICINE GRANTS $120,717
93.504 FAMILY TO FAMILY HEALTH INFORMATION CENTERS $119,371
93.110 SPECIAL PROJECTS OF REGIONAL AND NATIONAL SIGNIFICANCE $69,403
93.103 FOOD AND DRUG ADMINISTRATION RESEARCH $45,076
93.917 HIV CARE FORMULA GRANTS $44,846
93.150 PROJECTS FOR ASSISTANCE IN TRANSITION FROM HOMELESSNESS (PATH) $43,612
93.991 PREVENTIVE HEALTH AND HEALTH SERVICES BLOCK GRANT $41,888
93.314 EARLY HEARING DETECTION AND INTERVENTION INFORMATION SYSTEM (EHDI-IS) SURVEILLANCE PROGRAM $26,630
93.946 COOPERATIVE AGREEMENTS TO SUPPORT STATE-BASED SAFE MOTHERHOOD AND INFANT HEALTH INITIATIVE PROGRAMS $5,817
16.575 CRIME VICTIM ASSISTANCE $5,696
93.644 ADULT MEDICAID QUALITY: IMPROVING MATERNAL AND INFANT HEALTH OUTCOMES IN MEDICAID AND CHIP $3,089
93.495 COMMUNITY HEALTH WORKERS FOR PUBLIC HEALTH RESPONSE AND RESILIENT $732