Finding 392105 (2023-002)

Finding Number: 2023-002 Finding Type(s): Material weakness in internal control over compliance Non compliance related to the reporting compliance requirement Information on the Federal Program: Program Name: Health Center Program Cluster (AL 93.224) Federal Awards Project Title: Health Center Program Service Expansion - School Based Service Sites (SBSS) (H2E) Award Period: May 1, 2022 - April 30, 2023 Award Number: 22H2ECS45509 Agency: U.S. Department of Health and Human Services, HRSA Program Name: Health Center Program Cluster (AL 93.224 and 93.527) Federal Awards Project Title: American Rescue Plan Act Funding for Health Centers (H8F) Award Period: April 1, 2021 - March 31, 2024 Award Number: 21H8FCS40415C6 Agency: U.S. Department of Health and Human Services, HRSA Criteria: Management is responsible for ensuring required reports for federal awards include all activity of the reporting period, are supported by applicable accounting or performance records, and are fairly presented in accordance with governing requirements. Condition: In a nonstatistical sample, two of three annual Federal Financial Reports (FFR) tested included certain amounts which were not supported by underlying accounting records. The reports were to be completed on the accrual basis of accounting; however, based on procedures performed, it was determined the reports were completed on the cash basis of accounting. This resulted in the FFRs under-reporting grant expenditures for H2E and H8F by $13,183 and $320,691, respectively, and over-reporting unobligated (unused) funds for each grant by $13,183 and $320,691, respectively. Cause: The platform for filing the annual FFRs changed a few years ago from the Electronic Handbook to the Payment Management System (PMS). PMS is the platform in which the Organization requests the draw down of grant funds and completes quarterly Federal Cash Transaction reports. With the switch to PMS, certain amounts are now prepopulated on the FFR from the Organization's cash activity for the budget period. These amounts are required to be updated when the annual FFR is completed. Management was not aware the prepopulated amounts were to be updated. Effect: Inaccurate reports could result in the loss of grant dollars or the repayment of previously received grant dollars. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management develop a procedure for the annual FFR filing, outlining each step in the process to help ensure the reports are completed accurately and are fully supported by the Organization's accounting records. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding. A process will be established related to the completion of federal reports.