Finding Text
Finding 2022-004: Compliance with Reporting Requirements
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Section 223 Demonstration Programs for Improving Community Mental Health Services –
Assistance Listing No. 93.829
Compliance Findings: Reporting (L)
Criteria: Per the terms of the Award Notice, grantees are required to submit certain financial
reports and programmatic reports by specified due dates.
Additionally, per 2 CFR 200.303, 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 award. These internal controls should be in
compliance with guidance in “Standards for Internal Control in the Federal Government”
issued by the Comptroller General of the United States or the “Internal Control Integrated
Framework”, issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO).
Condition: During our audit, it was determined that one of two financial reports selected for
testing was not submitted and two of the three reports selected for testing were not submitted
by the specified due date.
In addition, it was discovered that evidence to document reports are reviewed and approved
prior to submittal is not maintained by the Organizatoin. Per COSO, segregation of duties
should exist between those preparing and those reviewing and filing required reports. Best
practices would include ensuring adequate supporting evidence exists to substantiate controls
are being followed and all required reports are being submitted and submitted by their
specified due dates.
Cause: Internal controls were not in place to ensure reports were submitted by the specified
due date and processes were not in place to ensure internal control procedures over review of
reporting sbumissions were documented and retained.
Effect: The Organization is not in compliance with reporting requirements.
Context: During our audit, the Organization had indicated that their internal control
procedures include a review of reporting submissions, however the auditor was unable to
substantiate statements made due to lack of supporting evidence and due to staff turnover at
the organization.
Questioned Costs: $0
Identification of Repeat Finding: Not a repeat finding.
Recommendation: We recommend that the Organization review and improve its internal
control procedures to ensure compliance with reporting requirements. Additionally, we
recommend the Organization ensure internal control procedures include retaining
documentation of the procedures performed.
Views of Responsible Officials and Corrective Action Plan: Management agrees with this
finding and is in the process of developing internal controls to ensure timely and appropriate
actions are made on the deficiency noted. Additional details can be found in the
Organization’s Corrective Action Plan.