Finding 388424 (2023-002)

Secondary Review of Billings (Significant Deficiency) Federal Agency: U.S. Department of Health and Human Services Program Title: Child Care and Development Block Grant Assistance Listing Number: 93.575 Federal Award Source: Pass-Through Funding Pass-Through Entity: Arizona Department of Economic Security Pass-Through Identifying Number: SX222367 Criteria – Section §200.303 of the Uniform Guidance states that a non-Federal entity must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. Condition and Context – During our audit of allowable activities, we noted the Organization did not conduct a secondary internal supervisory review of the monthly billings for this program prior to submission to the funding source. Cause and Effect – Due to a shortage in staff, all 12 monthly billings for this program were prepared by one individual and were not reviewed and approved by secondary supervisory personnel. Questioned Costs – None identified. Recommendation – We recommend that the Organization improve its internal controls over the preparation of billings for this program to ensure all billings are reviewed and approved by secondary supervisory personnel. View of Responsible Officials: We agree with the finding. We have implemented procedures to ensure secondary reviews of all billings. See our Corrective Action Plan for the fiscal year ended June 30, 2023 for additional detail. Corrective Action Plan: CCS will improve its internal controls over the preparation of all billings. Effective April 1, 2024, Tammy Gallegos, CCS Accounting Manager, will make certain all billings are reviewed and approved by a secondary supervisor. The Accounting Manager will check off and sign off on a listing of all billings in an effort to ensure and document that 1) the billings were reviewed by a secondary supervisor, 2) the billings were submitted to the payers, and 3) the billings were submitted on a timely manner.