Finding Text
Finding #: 2022-004 Reporting – Noncompliance (not material to compliance requirement)
Identification of Federal Program and Award
Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster)
CFDA #: 93.224/93.527 Award #: H8FCS40520 Program Year: 2022
Criteria
Pursuant to 2 CFR 200.302, the financial management system of each non-Federal entity must provide for accurate, current, and complete disclosure of the financial results of each Federal award, and records that identify adequately the source and application of funds for federally-funded activities and supported by source documentation.
Condition
During our testing of financial reporting, we noted an instance of noncompliance relating to the health center’s accurate reporting of FFRs. 1 out of 4 FFRs had no expenditures reported on line 10e, and the amount of federal share of expenditures reported did not reconcile to the accounting records.
Cause
CAMcare’s documented policies and procedures include one control procedure regarding annual FFR completion, which states, “Annually the FFR report is done in EHB reconciling to the quarterly reports submitted in the PMS system.” Accordingly, the control procedure lacks description of written roles and responsibilities to ensure personnel responsible for review and for completion of FFR reports are identified, and to ensure duties are defined for reconciling the FFR amounts to the accounting records prior to submission.
Effect
Possibility of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding.
Questioned Costs
None
Perspective Information
We tested the entire population of 4 total Federal Financial Reports and determined that the audit finding represented an isolated incident.
Repeat Finding
This finding is not a repeated finding.
Recommendation
We recommend that management review DHHS draw down and FFR policies and procedures in place and revise such procedures to describe roles and responsibilities to mitigate the risk of inaccurate reporting and to ensure CAMcare is in compliance with the compliance requirements of 2 CFR 200 section 302.
Views of Responsible Officials
Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that when the FFR was submitted by the prior CFO, it was correct at the time. However, due to miscommunications between the people purchasing items covered by the grants and CAMcare’s accounting department, it wasn’t discovered until later that CAMcare had missed expenses during the period covered by the FFR. Those expenses were then reported on a future FFR. CAMcare has since implemented a system whereby every purchase needs to identify the funding source before it gets to the accounting department to prevent this situation from occurring in the future.