Finding Text
2022-005 Department of Health and Human Services Federal Assistance Listing #93.498 COVID-19 Provider Relief Fund and American Rescue Plan Applicable Federal Award Number and Year ? Period 2 TIN #420953968 Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Reporting Significant Deficiency in Internal Control Over Compliance Criteria ?2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition ? The Organization?s Period 2 report to HHS included expenditures that were not properly supported. Cause ? The Organization had multiple individuals identifying and compiling eligible costs, however, the Organization did not have an internal control process in place to ensure a secondary review and approval of eligible expenditures that were summarized in the final expenditure listing. The summary spreadsheet was used to claim allowable costs under the federal program. In addition, the review and approval of the lost revenue calculation was not performed by someone other than the preparer. Effect ? Without a secondary review and approval, there is a possibility that ineligible expenditures or lost revenue may be claimed under the program and the report may not be accurately completed. Questioned Costs ? None over limit of $25,000. Context ? A nonstatistical sample of 60 expenditures were selected for testing, which accounted for $301,444 of $831,368 direct program expenditures. Noted errors for all items included in the sample. All lost revenue periods were tested. Repeat Finding from Prior Years ? No Recommendation ? We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing and lost revenue calculation used to claim the allowable costs under the federal program and a secondary review and approval of required reports to be submitted to the federal agency. Views of Responsible Officials ? Management agrees with the finding.