Finding Text
Department of Homeland Security
Federal Assistance Listing #97.036
COVID‐19 Disaster Grants – Public Assistance
Activities Allowed or Unallowed and Allowable Costs/Costs Principles and Period of
Performance
Material Weakness in Internal Control Over Compliance
Criteria: 2 CFR 200.303 (a) establishes that the auditee must establish and maintain effective internal control over federal awards that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations and conditions of the federal award.
Condition: During our testing, it was noted that the review and approval of the expenditure listings was not retained.
Cause: The Clinic did not have an internal control policy in place to ensure the review and approval of the expenditure listings was documented and retained.
Effect: The lack of adequate policies governing review and approval over the expenditure listings increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner.
Questioned Costs: None reported.
Context/Sampling: A nonstatistical sample of 42 of 209 expenditures were selected for testing, which accounted for $120,934 of $346,290 direct program expenditures. None of the expenditures contained evidence of a secondary review to verify that expenditures met the terms and conditions of the program.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Clinic enhance internal control policies to ensure the expenditure listings are reviewed and approved and all of that information is retained to ensure that all payments are necessary, correct, and meet the requirements of the federal program.
View of Responsible Officials: Management agrees with the finding.