Finding 304 (2022-002)

Compliance Requirement: Allowable Costs/Cost Principles (Indirect Costs), Cash Management Internal Control Impact: Significant Deficiency Federal Agency: HHS AL Numbers and Titles: 93.592 - Family Violence Prevention and Services/Discretionary Federal Award Number: 90EV0474, 90EV0501, 90EV0531 Questioned Costs: None Repeat Finding: Yes, 2021-002 and 2021-003 Criteria: As a recipient of federal awards, Caminar Latino is required to establish and maintain effective internal controls over federal awards that provide reasonable assurance of managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal award pursuant to Title 2. U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) §200.303 – Internal Controls. Additionally, Caminar Latino’s corrective action plans related to the fiscal year 2021 finding 2021-002 and 2021-003 state that the Caminar Latino will implement segregation of duties over the preparation and review of indirect cost calculations and drawdowns. Condition: Upon review of the indirect cost calculations throughout the fiscal year, it was noted that there was no documentation of review and approval of three of the seven calculations tested. The auditors were able to review the drawdown reconciliations performed by the Caminar Latino and determine the reports were materially accurate; however, no evidence of a formal supervisory review and approval of the reconciliation was maintained on-file in these three instances. Cause: Due to the timing of the prior year audit results, Caminar Latino did not implement its corrective action plan and maintain documentation of the review and approval of the indirect costs calculations and drawdowns submitted until the end of the fiscal year under review. Effect: A lack of independent review of the drawdowns could result in a reasonable possibility that Caminar Latino would not detect errors in the normal course of performing duties and correct them in a timely manner. Recommendation: Caminar Latino should establish a system to document and verify the review and approval of each federal drawdown by someone independent of the preparation of the drawdown request. Views of Responsible Officials and Corrective Actions: Caminar Latino agrees with this finding. Please refer to the Corrective Action Plan.