Finding Text
Finding Number 2022-007: Costs Incurred & Paid Prior to Reimbursements (Significant Deficiency over Internal Control and Instance of Noncompliance – Cash Management; Period of Performance) FALN 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance
Criteria: 2022 Compliance Supplement stated that program costs must be paid by non-federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)) (i.e., the non-federal entity must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity). In addition, a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance.
Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of $2,500 nonpayroll expenditures that was submitted for reimbursement prior to the expenditure being incurred. In addition, the cost incurred was outside of the period of performance ended 9/30/2021.
Repeat Finding from Prior Year(s): Yes, Finding Number 2021-005
Cause and Effect: The Health System did not have proper controls in place to ensure expenditures are incurred and paid for prior to reimbursements, and that expenditures are incurred within the period of performance of the contract, which resulted in noncompliance with the compliance requirements of the program.
Questioned Cost: None
Recommendation: We recommend management implement policies and procedures to ensure funds are disbursed for expenditures incurred prior to reimbursement requests, and that expenditures are incurred within the contract’s performance period.
Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that funds are disbursed for incurred expenditures prior to reimbursement requests.