Finding Text
Finding Number: 2023-001
Program Name/Assistance Listing Title: Substance Abuse Block Grant
Federal Assistance Listing No: 93.959
Federal Agency: U.S. Department of Health and Human Services
Federal Award Identification: Unknown
Pass-Through Entity Number: 2200549
Applicable Pass-through Entity: Substance Abuse and Mental Health Services Administration
Type of Finding: Significant Deficiency
Compliance Requirement: Reporting
Criteria: According to Section 200.303 of the Uniform Guidance, 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. LIMA UMADAOP needs to establish and document their policies and procedures to
meet the control objectives outlined in 2 CFR section 200.1. One of the objectives
focuses on ensuring that transactions are accurately recorded and accounted for,
enabling the accurate preparation of dependable financial statements and federal
reports.
Condition: After examining the Schedule of Expenditures of Federal Awards (SEFA) in the
current year, it was observed that there was a significant misstatement in the reported
expenditures from the previous year.
Cause of Condition: The organization is small size and relies heavily on an external accountant to prepare the financial statement.
Effect: Monitoring of the federal expenditures is not formal throughout the year and reconciliation is only done at year-end. Informal monitoring of expenditure throughout the year and reconciliation at year-end
does not permits timely reconciliation for the management to verify accuracy and
completeness in reconciling items which may lead to misstatement in financial
statements and federal reports.
Questioned Cost: $43,340 Context: Under ALN 93.959, the organization received a grant of $220,907 for OHIO MHAS –
Adult Treatment AUD covering the period from October 1, 2021, through March 31,
2024. This grant was included in the schedule of federal expenditures for the fiscal
years ending June 30, 2023, and June 30, 2022, with reported amounts of $131,774
and $132,473, respectively. However, the figures for 2022 represented the drawdown
amount instead of the actual expenditures, leading to an overstatement of $43,340 in
the schedule of expenditures of federal awards. Our testing of expenditures did not
reveal any unallowable costs, inadequate documentation, or unreasonable costs.
However, the 2022 schedule of expenditures of federal awards was misstated,
resulting in an excess of expenditures over the total award, leading to a questioned
cost of $43,340.
Recommendations:We suggest that Management engage in quarterly monitoring of their federal
expenditures. This proactive strategy will aid management in preparing the Schedule
of Expenditures of Federal Awards (SEFA) at year-end, as the amounts will have
undergone partial scrutiny for completeness and accuracy throughout the year.
Views of Responsible
Official: See separate page for the Corrective Action Plan.