Finding 380533 (2020-004)

Material Weakness
Requirement
L
Questioned Costs
-
Year
2020
Accepted
2024-03-15
Audit: 295322
Auditor: Marcum LLP

AI Summary

  • Core Issue: The schedule of expenditures for federal awards was not completed on time and lacked necessary details.
  • Impacted Requirements: This noncompliance indicates a material weakness in internal controls over financial reporting as per Uniform Guidance.
  • Recommended Follow-Up: Implement a formal monthly close process to ensure timely completion of the schedule of expenditures.

Finding Text

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

Corrective Action Plan

Subsequent to July 31, 2020, QCHC has hired a new fiscal team: Chief Financial Officer (2021), Accounting Manager (2023), Senior Accountant (2024) and Staff Accountant (2022). As of August 15, 2023, Health Resources and Services Administration (HRSA), Office of Federal Assistance Management's (OFAM) Division of Financial Integrity (DFI) provided Fiscal Technical Assistance (FTA) to Quality Community Health Care for six months. During the Fiscal Technical Assistance, DFI provided QCHC best practices and recommendations for improving weaknesses and internal control processes. The key topics discussed during the PTA that DFI recommended QCHC have an in-depth understanding and strengthen internal controls over were the following: Legislative Mandates, Delinquent Single Audit, Financial Management System, Cash Management, Compensation for Personal Services (Time and Effort Reporting) and Policies and Procedures. As a repeated finding, the Chief Financial Officer has been charged with reviewing past accounting procedures for posting, reconciling, and documentation. To date, all Financial Accounting and Financial Management procedures have been enforced by the Chief Financial Officer to ensure QCHC will be complainant. The Accounting Manager ensures the month-end close process is implemented and account reconciliations and balances are properly stated at month end. In the accounting system all federal awards are assigned a general ledger account number in which funds are recorded or disbursed. The Schedule of Expenditures for the Federal Awards will be completed by the Accounting Manager as part of the monthly close to ensure timely availability.

Categories

Reporting HUD Housing Programs Material Weakness

Other Findings in this Audit

  • 380534 2020-005
    Material Weakness Repeat
  • 380535 2020-006
    Material Weakness Repeat
  • 380536 2020-007
    Material Weakness Repeat
  • 380537 2020-004
    Material Weakness
  • 380538 2020-005
    Material Weakness Repeat
  • 380539 2020-006
    Material Weakness Repeat
  • 380540 2020-007
    Material Weakness Repeat
  • 380541 2020-004
    Material Weakness
  • 380542 2020-005
    Material Weakness Repeat
  • 380543 2020-006
    Material Weakness Repeat
  • 380544 2020-007
    Material Weakness Repeat
  • 956975 2020-004
    Material Weakness
  • 956976 2020-005
    Material Weakness Repeat
  • 956977 2020-006
    Material Weakness Repeat
  • 956978 2020-007
    Material Weakness Repeat
  • 956979 2020-004
    Material Weakness
  • 956980 2020-005
    Material Weakness Repeat
  • 956981 2020-006
    Material Weakness Repeat
  • 956982 2020-007
    Material Weakness Repeat
  • 956983 2020-004
    Material Weakness
  • 956984 2020-005
    Material Weakness Repeat
  • 956985 2020-006
    Material Weakness Repeat
  • 956986 2020-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $2.16M
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $1.43M