FAC Explorer

Finding 38755 (2022-002)

Material Weakness
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2022-10-24
Audit: 34640
Organization: South Arkansas Regional Health Center, Inc. (AR)
Auditor: Thomas & Thomas CPAS PLLC

AI Summary

  • Core Issue: The Center made errors in reimbursement requests for the CCBHC program, leading to overstatements of revenue by about $118,000.
  • Impacted Requirements: Compliance with cash management regulations under 48 CFR Section 52.216-7 was not met due to inadequate internal controls.
  • Recommended Follow-Up: Implement monthly reconciliations of CCBHC expenses in the general ledger to reimbursement requests to prevent future errors.

Finding Text

Identification of Federal Program Certified Community Behavioral Health Clinic (CCBHC) Expansion Grant, AL #93.829 Criteria or specific requirement (including statutory, regulatory, or other citation) Cash Management: 48 CFR Section 52.216-7 provides requirements for cost reimbursement contracts. Condition In testing compliance with cash management related to the CCBHC program, we noted instances where the Center requested reimbursement for expenses in error. Cause The errors were due to unsatisfactory internal controls in monitoring the monthly reconciliations of total expenses within the general ledger to the amounts requested for reimbursements. Effect of Potential Effect Prior to the adjustments made as part of the audit process, the Center had recognized CCBHC program revenues in excess of expenses. Questioned Cost None Context The Center requested reimbursements through the CCBHC contract in error which resulted in reimbursements exceeding the expenses incurred by approximately $118,000 as of June 30, 2022. Recommendation In order to monitor the status of the CCBHC contract revenues and expenses we recommend that the Center reconcile the general ledger accounts for CCBHC expenses to the requests for reimbursements on a monthly basis. This will help prevent errors in reimbursement requests and will simplify future reconciliations.

Corrective Action Plan

In reconciling the cash payments received for the CCBHC grant during the year, the auditors identified approximately $118,000 in expenses that were requested for reimbursement in error. This amount will be reported as deferred revenue in the Center?s financial statements. The CCBHC grant period ends on August 30th each year, so this allows the Center adequate time to reconcile this grant before the end of the grant period. The Center has created a reconciliation to help with reconciling amounts that are requested for reimbursement each month. Each month there will be a reconciliation between the trial balance and the amounts submitted to be drawn down from the grant. The expenses included in the general ledger will be reviewed to ensure they are allowable and adequate expenses, and the amounts submitted through the Payment Management System will also be reviewed. The expenses in the general ledger will be kept in an Excel spreadsheet to ensure that the Center has not over or under drawn monies from the grant.

Categories

Cash Management Subrecipient Monitoring

Other Findings in this Audit

  • 615197 2022-002
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.829 Section 223 Demonstration Programs to Improve Community Mental Health Services $872,037
94.002 Retired and Senior Volunteer Program $94,508
93.958 Block Grants for Community Mental Health Services $33,333
93.048 Special Programs for the Aging_title Iv_and Title Ii_discretionary Projects $5,000
10.558 Child and Adult Care Food Program $2,693
93.575 Child Care and Development Block Grant $2,500
93.667 Social Services Block Grant $1,488