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 2022-003
Noncompliance - Activities Allowed/Unallowed
Material Weakness
Criteria: OMB’s Uniform Guidance requires that all non-federal entities implement a process designed to provide reasonable assurance regarding the achievement of effective and efficient operations, reliability of reporting for internal and external use, and compliance with applicable laws and regulations (internal controls).
Condition: The system of internal control in use during the year did not consistently provide supporting documentation sufficient to verify expenditures. Also, the performance of important control procedures is not documented when performed.
Cause: The Organization did not establish a document retention and destruction policy that would have retained supporting documentation for all expenditures for a period sufficient for them to be audited. The internal controls are not designed comprehensively to require documentation of major control steps.
Effect or Potential Effect: For a sample of 40 expenditures, only 18 contained supporting documentation sufficient to verify that the item was an actual expense of the Organization. The review of the monthly bank account reconciliation is not documented.
Questioned Costs: Unknown
Repeat Finding: N/A
Recommendation: The Organization should implement a written document retention and destruction policy and apply it consistently. Internally produced documents should not be substituted as support for items paid to vendors. Thus, policies should be revised to mandate that all vendors and contractors submit their request for payment using the vendor’s invoice, statement, or signed timesheet. The performance of primary control procedures such as the review of the bank reconciliation should be documented.
Views of Responsible Officials: African American Child Wellness Institute, Inc. is in agreement with the audit finding.