Finding Text
Criteria – The Hospital is required to establish and maintain effective internal control over federal awards that provides reasonable assurance the entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Condition – Evidence of payment of certain expense transactions under the United States Department of Homeland Security program was not maintained by management.
Context – For 23 out of 40 tested transactions, evidence of payment of expense transactions was not able to be provided. There are additional supportable costs in excess of funding received, for which evidence of payment is available. Therefore, the errors had no impact on the amount of federal awards the Hospital was allowed to retain due to the excess of related costs over the amount of federal awards received.
Cause – Evidence of payment was not available as audit testing occurred approximately four years after expenses were incurred. Certain documentation was transferred to long-term storage and unavailable during audit testing. Additionally, there was an accounting software conversion since such expenses were incurred and the Hospital no longer has access to the prior accounting software.
Effect – The Hospital was unable to provide supporting documentation for certain of its expenses.
Recommendation – We recommend that management review procedures and change as necessary to ensure evidence is maintained to support the expense transactions.
Views of Responsible Officials and Planned Corrective Actions – Management agrees with this finding. There has been turnover within the organization, in addition to the accounting software conversion, and policies are being reviewed and new procedures put in place as needed to ensure documentation of proper compliance.