Finding Text
2023-004 Material Weakness in Internal Control and Compliance over Eligibility
Federal Agency: U.S. Department of Health and Human Services
Federal Program: 93.558, Temporary Assistance for Needy Families Cluster
Criteria or Specific Requirement - OMB Circular A-122, Costs Principles for Non-Profit Organizations requires specific compliance with the provisions of allowable costs and activities. The Organization is responsible for having internal controls designed to ensure compliance with this provision. Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, require that, among other things, participants in the program meet certain eligibility requirements. In compliance with 2 CFR Part 200, Subpart D, Performance and Financial Monitoring and Reporting § 200.329, financial records, supporting documents, statistical records, and all other non-federal entity records pertinent to a federal award, must be retained for a period of three years from the date of submission of the final expenditure report.
Condition - During our testing of participant eligibility, we noted that certain required documentation for participation in the program had not been obtained and retained in the participant’s file.
Cause - There is a lack of sufficient adherence to internal controls over document retention, independent review and approval of required items, and the organization and accuracy of supporting documentation.
Effect - Lack of supporting documentation could result in the Organization being required to return funds received for providing services to ineligible participants. Additionally, the funding agency could impose compliance actions against the Organization.
Questioned Costs - $180,071 Context - As part of our audit procedures, we sampled a total of 25 participants to test internal controls over compliance and compliance with the eligibility of federal awards.
During our testing of participant eligibility, we noted the following deviations:
- Three selections in our statistically valid sample lacked appropriate documentation to substantiate the participants’ health records were obtained within 60 days of enrollment in the program and subsequently retained by the Organization.
Repeat Finding - No
Recommendation - The Organization should implement controls and procedures for obtaining and retaining supporting documentation for all participants as required by the specific provisions of each contract or grant agreement pertaining to the federal program. Procedures should include the implementation of controls over document retention that would prevent acceptance into the program until all supporting documentation has been verified by an individual independent of the admission process.
Views of Responsible Officials and Planned Corrective Actions - Out of over 182 compliance records requested, the Organization was unable to provide 3 health assessments, all other requested documentation was provided. The missing health assessments were for high school students, who are not required to provide them to attend school and often do not have access to updated health assessments. We have been directed by the funding agency never to exclude these youth from participation for an inability to obtain a health assessment.
BGCP has already taken steps to address these issues. The funding agency, PHMC, has begun sending monthly compliance reports. Over the last three months, we have collected 42% of missing health assessments organization-wide. Additionally, on our recent FY24 Admin review from PHMC, which included a full compliance report, all of our sites received overall scores of above 95%. We will continue to monitor compliance and follow-up with youth and families to complete needed items.