Finding Text
Finding 2022-001 ? L. Reporting Identification of the federal program: Federal Agency: U.S. Department of Education Assistance Listing: 84.425, COVID-19 Higher Education Emergency Relief Fund Award Period: July 1, 2021 through June 30, 2022 Criteria or specific requirement (including statutory, regulatory or other citation): Section 200.303 of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) states the following regarding internal control: ?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: The Christ Hospital Health Network (the Network) did not appropriately design and execute internal controls in order to satisfy all quarterly and annual reporting requirements relating to the student aid portion (84.425E) and institutional portion (84.425F) funds received under the program. The controls designed by the Network lacked the precision necessary to ensure the accuracy of the quarterly and annual reporting for the program. Cause: The controls designed by the Network lacked the precision necessary to ensure the accuracy of the quarterly and annual reporting for the program. Effect or potential effect: The absence of effective internal controls could result in untimely or inaccurate information reported to the U.S. Department of Education and the public in regard to the Network?s participation in the program and use of program funding received. Questioned costs: None. Context: All of the quarterly reports relating to the fiscal year ending June 30, 2022 were obtained as part of testing procedures. This included both the student aid portion publications and institutional portion reports. The 2021 annual report was submitted during the period under audit. Therefore, the 2021 annual report was obtained with consideration given to all quarterly reports from calendar year 2021. Balances included in the annual and quarterly reports were traced to the underlying support including program expense detail utilized to test other relevant program compliance attributes. In total, $1,892,007 of program funds were reported for the fiscal year ending June 30, 2022. While performing our procedures, we noted instances in which certain reports were incomplete, were not filed timely, or included balances that did not agree to the underlying documentation. The student aid publication for the quarter ended September 30, 2021 did not include the required balance of student awards granted at that date. The student awards issued as of September 30, 2021 were included in the December 31, 2021 quarterly publication; however, both the student aid publication and the institutional portion report for the quarter ended December 31, 2021 were submitted three days subsequent to the permitted ten day window following period end (as both submissions were made on January 13, 2022). The 2021 annual report filed for the program understated institutional expenses by $47,782 when compared to the aggregation of the 2021 quarterly reports. Further, the institutional portion report for the quarter ended March 31, 2022 included a lost revenue balance for the fall 2021 semester that was derived from a budgeted number of students which could not be agreed to an approved budget. Had the budgeted students aligned with the final budget, the lost revenue for the semester would have been reduced by $89,297. However, there are no questioned costs due to excess lost revenue from the spring 2022 semester that exceeded the remaining program funding. Identification as a repeat finding, if applicable: This finding is not a repeat finding from a prior year. Recommendation: Management should reassess its internal controls over the review and approval of the various reporting requirements of the program. Views of responsible officials: Management concurs that the internal controls relating to the reporting requirements of the program were not effectively designed and executed. As a result, certain instances of quarterly and annual information reported were delayed and/or inaccurately stated. However, such issues are not indicative of the Network in appropriately utilizing program funds.