Finding 375583 (2023-001)

U.S. Department of Health and Human Services, NC Department of Health and Human Services: Award 43852 Temporary Assistance for Needy Families (TANF): Federal Assistance Listing Number 93.558 Compliance Requirement: Reporting Criteria Uniform Guidance requires the Schedule of Expenditures of Federal Awards to include all sources of grants which originate at the Federal Level. ConditionThe initial preparation of the Schedule of Expenditures of Federal Awards did not identify all of the Federal awards received and expended for the Temporary Assistance for Needy Families program during fiscal year 2023. Cause Management did not have controls in place to ensure proper inclusion of all Federal awards through grantors for the Temporary Assistance for Needy Families program on the Schedule of Expenditures of Federal Awards. Effect or Potential Effect Management is not in compliance with the Uniform Guidance requirement to report all sources of grants which originate at the Federal level for the Temporary Assistance for Needy Families program on the Schedule of Expenditures of Federal Awards. Questioned Costs None. Context During out testing for completeness of the Schedule, it was determined that $1,561,142 of Federal funds for the Temporary Assistance for Needy Families program were omitted and required adjustment to properly state the Schedule of Expenditures of Federal Awards. Identification as a Repeat Finding No. Recommendation Management should institute procedures and controls to ensure that the Schedule of Expenditures of Federal Awards includes all sources of grants which originate at the Federal level. Views of Responsible Officials We agree with our auditor's finding and acknowledge that it came to our attention on October 2, 2023. Subsequent.to this acknowledgement, the affected reports underwent a recalculation and were resubmitted on October 20, 2023, resulting in the correction of the error on that particular date. Our contract with the NC Department of Health and Human Services Division of Child Development and Early Education is comprised of both State and Federal funding. Throughout the year as funds are received, our agency does not know the origin on the funding. As such, we record the funding as State funds when received. At the end of the year, we receive a spreadsheet indicating the composition of the funding. Reclassification journal entries are prepared to allocate the funding to the various funding components of the contract. We will ensure that at the end of each fiscal year that we are reclassifying funds in accordance with the spreadsheet. Once the journal entries have been posted, a MIP report will be created and reconciled to the spreadsheet. This will ensure the funds are properly recorded the correct funding source.