Finding Text
2022‐004 Department of Health and Human Services
Federal Assistance Listing #93.498
COVID‐19 Provider Relief Fund and American Rescue Plan Rural (ARP) Distribution
Applicable Federal Award Number and Year ‐ Period 4 TIN #841276376
Activities Allowed or Unallowed and Allowable Costs/Costs Principles
Material Weakness in Internal Control Over Compliance and Noncompliance
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 entity is managing the federal award in compliance with
federal statutes, regulations, and conditions of the federal award.
Condition ‐ The Organization had various invoices and employee timecards identified as COVID‐19 eligible that
did not follow the Organization’s review and approval process for COVID‐19 funding.
Cause ‐ The Organization did not have an adequate internal control policy in place to ensure documented review
and approval over specific invoices and employee timecards as it relates to COVID‐19.
Effect ‐ The lack of adequate policies governing review and approval of the specific invoices and employee
timecards increase the risk that employees participating in the federal award administration may not be able to
detect and correct noncompliance in a timely manner. Without this documentation, ineligible expenditures may
be claimed under the program.
Questioned Costs ‐ None. $6,686 of improper expenses were noted due to use of incorrect pay rates or invoice
amounts. However, the Organization has excess lost revenue of $157,250 and excess expenses of $345,951 that
can be substituted for these expenses.
Context ‐ Detail testing was completed over expenses. A nonstatistical sample of 60 expenditures were selected
for detail testing and 11 of the expenditures did not follow the internal control process for the COVID‐19
funding. In addition, incorrect pay rates were utilized on the wages tracking sheet for four selections along with
one incorrect invoice amount on the tracking sheet.
Repeat Finding from Prior Years ‐ Yes, Finding 2021‐004.
Recommendation ‐ We recommend that the Organization enhance internal control policies to ensure all invoices
and employee timecards follow the internal control policies implemented by the Organization as it relates to the
COVID‐19 funding. We recommend that the Organization also ensure proper reviews are completed to ensure
invoices and pay rates are recorded correctly on the expense tracking sheet. This will ensure that all expenses
claimed under the federal program are necessary, reasonable, and meet the requirements of the federal
program.
Views of Responsible Officials ‐ Management agrees with the finding.