Finding 371972 (2022-001)

Material Weakness
Requirement
B
Questioned Costs
$1
Year
2022
Accepted
2024-03-03

AI Summary

  • Core Issue: The Organization lacks a proper financial reporting system for federal grants, leading to noncompliance with OMB’s Uniform Guidance.
  • Impacted Requirements: Failure to establish cost centers prevents accurate tracking of expenses charged to federal grants.
  • Recommended Follow-Up: Financial management should receive training on federal grant management and implement a system to record expenditures for each grant.

Finding Text

ALN 93.958 Block Grants for Community Mental Health Services Pass-through Entity Identification Number GRK 213195 U. S. Department of Health and Human Services Minnesota Department of Human Services Finding 2022-001 Noncompliance – Allowable Costs/Cost Principles Material Weakness Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain an effective financial reporting system over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations and the terms and conditions of the federal award. Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred. Cause: The Organization changed accounting services during 2022 and did not establish cost centers in its general ledger that would have allowed expenses to be charged or allocated to each of its federal grants. Additionally, the financial management of the Organization does not have adequate training on OMB Uniform Guidance guidelines and federal grant management to prioritize and maintain an accounting system that complies with this requirement. Effect or Potential Effect: Expenses charged to the grant and reported to the pass-through agency cannot be traced into the accounting records. Questioned Costs: Unknown Repeat Finding: N/A Recommendation: The Organization’s financial management team should obtain additional training on Uniform Guidance and federal grant management and create a system of financial reporting to record expenditures directly to each federal grant award. Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.

Corrective Action Plan

To: U.S. Department of Health and Human Services-Passed through Minnesota Department of Human Services RE: Single Audit Corrective Action Plan for the fiscal year ended December 31, 2022 Name and address of independent accounting firm: BWK Rogers PC 431 South Seventh Street, Suite 2424 Minneapolis, MN 55415 African American Child Wellness Institute submits the following corrective action plan for the year ended December 31, 2022. Please contact Akinyele Akinsanya at 763-522-0100. Finding 2022-001 Noncompliance – Allowable Costs/Cost Principles Material Weakness ALN 93.958 Block Grants for Community Mental Health Services Pass-through Entity Identification Number GRK 213195 U. S. Department of Health and Human Services Minnesota Department of Human Services Condition: The Organization did not create and install a system of financial reporting for federal funds that would record expenses charged to each federal grant into a cost center as those expenses were incurred. Actions Planned in Response to the Finding: The chart of accounts in the accounting software will be revised to include cost centers for each federal grant. The support for each expenditure (other than payroll) will be attached to the transaction in the accounting software. Organization staff will receive additional training on OMB Uniform Guidance requirements and related aspects of federal grant management and reporting. Official Responsible for Ensuring the CAP: Chief Operating Officer Planned Completion Date for the CAP: June 30, 2024

Categories

Questioned Costs Allowable Costs / Cost Principles Subrecipient Monitoring Material Weakness Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 371973 2022-001
    Material Weakness
  • 371974 2022-001
    Material Weakness
  • 371975 2022-001
    Material Weakness
  • 371976 2022-002
    Material Weakness
  • 371977 2022-002
    Material Weakness
  • 371978 2022-002
    Material Weakness
  • 371979 2022-002
    Material Weakness
  • 371980 2022-003
    Material Weakness
  • 371981 2022-003
    Material Weakness
  • 371982 2022-003
    Material Weakness
  • 371983 2022-003
    Material Weakness
  • 371984 2022-004
    Material Weakness
  • 371985 2022-004
    Material Weakness
  • 371986 2022-004
    Material Weakness
  • 371987 2022-004
    Material Weakness
  • 948414 2022-001
    Material Weakness
  • 948415 2022-001
    Material Weakness
  • 948416 2022-001
    Material Weakness
  • 948417 2022-001
    Material Weakness
  • 948418 2022-002
    Material Weakness
  • 948419 2022-002
    Material Weakness
  • 948420 2022-002
    Material Weakness
  • 948421 2022-002
    Material Weakness
  • 948422 2022-003
    Material Weakness
  • 948423 2022-003
    Material Weakness
  • 948424 2022-003
    Material Weakness
  • 948425 2022-003
    Material Weakness
  • 948426 2022-004
    Material Weakness
  • 948427 2022-004
    Material Weakness
  • 948428 2022-004
    Material Weakness
  • 948429 2022-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.958 Block Grants for Community Mental Health Services $196,813
93.959 Block Grants for Prevention and Treatment of Substance Abuse $180,674