Finding 390719 (2023-001)

Significant Deficiency
Requirement
P
Questioned Costs
-
Year
2023
Accepted
2024-03-31

AI Summary

  • Core Issue: Key responsibilities are not separated, increasing the risk of errors or fraud in financial transactions.
  • Impacted Requirements: Segregation of duties is essential for cash management, accounts receivable, accounts payable, and payroll functions.
  • Recommended Follow-Up: Implement better segregation of duties and enhance board oversight to mitigate risks.

Finding Text

U.S. Department of Health and Human Services Health Resources and Services Administration Health Care Center Program CFDA 93.224 2023-01: Segregation of Duties Criteria: The assignment of responsibilities should be segregated so that one person is not responsible for the authorization and recording of a transaction and the custody of the related asset. There needs to be a reconciliation or control activity to provide reasonable assurance that transactions are handled appropriately. Condition: Key duties and functions are not segregated among Organization personnel. This is especially a concern in the cash management, account receivable, accounts payable, and payroll functions. Effect: Transaction could be mishandled, due to errors or fraud, that could lead to loss of assets or the reporting of misleading financial information. Cause: There are a limited number of personnel for certain functions and lack of board oversight. Identification of a repeat finding: No. Recommendation: We recommend that duties be segregated as best as possible with the people available. The Board should oversee these areas as much as possible. Views of responsible officials and planned corrective actions: The Organization agrees with this finding and will adhere to the corrective action plan on page 32 in this audit report.

Corrective Action Plan

2023-01: Segregation of Duties Name of contact person: Caroline Aultman, Executive Director Corrective Action: Duties and functions will be reviewed to determine where segregation needs to occur. The duties will be separated as much as possible and alternative controls will be implemented to compensate for lack of segregation. However, the risk of not segregating certain duties is not worth the additional costs. Nonfinancial employees will be trained and provide some assistance. Proposed completion date: The Board will implement the above procedure immediately.

Categories

Internal Control / Segregation of Duties Cash Management Reporting

Other Findings in this Audit

  • 390720 2023-002
    Significant Deficiency
  • 390721 2023-003
    Significant Deficiency
  • 390722 2023-004
    Significant Deficiency
  • 390723 2023-005
    Material Weakness
  • 967161 2023-001
    Significant Deficiency
  • 967162 2023-002
    Significant Deficiency
  • 967163 2023-003
    Significant Deficiency
  • 967164 2023-004
    Significant Deficiency
  • 967165 2023-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $587,709
93.107 Area Health Education Centers Point of Service Maintenance and Enhancement Awards $379,129