Finding 381209 (2023-003)

U.S. Department of Health & Human Services Federal Financial Assistance Listing 93.958 Block Grants for Mental Health Services - #AL22514C Period of Performance Significant Deficiency in Internal Control over Compliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: In connection with the audit procedures performed, it was noted that there was one expenditure amount that was incurred prior to the period of performance. Cause: The Organization did not have internal controls in place to ensure that all program expenditures were incurred during the corresponding contract’s period of performance. Effect: There is an increased risk of noncompliance when internal controls are not adequately established, followed, and documented related to the period of performance compliance requirement. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used for this compliance requirement. Sample size was 60 program expenditure transactions out of 1,341 total program expenditure transactions, and included $83,946 of $418,405 federal awards. For one expenditure selected and tested, it was noted that $65 of costs charged to the program (out of $83,946 costs sampled and tested) were incurred prior to the related contract’s period of performance. Repeat Finding from Prior Year: No Recommendation: The Organization should improve its processes and controls for: identifying each contract’s period of performance and ensuring that all costs charged to were incurred during the period of performance. Views of Responsible Officials: Management agrees with this finding.