Finding Text
2022-006 Significant Deficiency in Internal Controls over Compliance – Cash Management
Agency: U.S. Department of Health and Human Services Program(s) and
Federal Award Identification
Number(s): Special Programs for the Aging, Title VI, Part A, Grants to Indian Tribes AL 93.047
New or Repeat: Repeat
Criteria: Per 2 CFR 200.303, the non-Federal entity is responsible for maintaining effective internal controls over cash management to comply with terms and conditions of the Federal award. Per CFR 200.305(b), for cost reimbursement awards, the timing of cash draws shall be as close as administratively feasible to the actual disbursements of program costs. Additionally, per 2 CFR 200.334, “financial records, supporting documents . . . and all other non-Federal entity records pertinent to the Federal award must be retained for a period of three years from the date of submission of the final expenditure report.”
Condition: Internal controls were not sufficiently designed and implemented to ensure that reimbursement requests were accurate and supported by expenditures incurred prior to the drawdown request. Monthly reimbursement requests were not reviewed by an individual, other than the preparer, to ensure the amount requested agreed to the supporting records. Additionally, the supporting records used to prepare the reimbursement requests were not retained. Reconciliation and monitoring activities were not in place to ensure amounts requested matched recalculated expenditure totals between periods.
Cause: Vacancies in key financial positions and lack of adequate resources in the finance department lead to a breakdown of established controls and inadequate monitoring of cash management requirements and documentation.
Context: See condition.
Effect: Due to the condition of the supporting records and lack of an effective tracking system regarding expenditures already reimbursed, there is potential that CCS could have been reimbursed for the same expense twice or that drawdowns occurred before expenses are incurred. Records had to be recreated in order to complete our audit procedures.
Questioned costs: No questioned costs.
Recommendation: We recommend management establish policies and procedures to ensure controls are properly designed and implemented to ensure that
reimbursement requests are accurate and supported by expenditures incurred. Further, we recommend management develop a tracking spreadsheet to record and monitor monthly reimbursement amounts, as well as the total amount drawndown, over the award’s period of performance.
View of responsible
officials: Management concurs with this finding, see corrective action plan.