Finding Text
Finding 2023-001
Identification of the federal program:
COVID-19 Disaster Grants – Public Assistance (Presidentially Declared Disasters) (FEMA)
Federal Agency: Department of Homeland Security
Pass-Through Entity: Illinois Emergency Management Agency
Award ID: COVID-19 PA-05-IL-4489-PW-00786
Assistance Listing Number: 97.036
Criteria or specific requirement (including statutory, regulatory or other citation):
2 CFR Section 200.303 of the Uniform Guidance states the following regarding internal control:
“The non-Federal entity must:
(a) 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 Federal 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:
Per inquiry of management, Memorial Health has processes and internal controls in place to ensure personnel expenses submitted to FEMA were allowable COVID-19-related expenses. These internal controls include ensuring completeness and accuracy of the expenses to ensure the expenses comply with the terms and conditions of the award. However, management did not retain documentation evidencing the performance of the internal controls.
Cause:
Management did not retain supporting documentation to evidence the performance of internal controls over the allowability of expenses charged to FEMA.
Effect or potential effect:
A lack of internal controls over the review and approval of FEMA expenditures could result in unallowable expenses being charged.
Questioned costs:
None
Context:
There was one project worksheet in 2023 and management did not maintain documentation over the review and approval over the expenses submitted to FEMA.
We tested 40 transactions charged to the FEMA grant ($56,621). Management did not maintain documentation over the review and approval for all the 40 transactions submitted to FEMA.
Total FEMA expenditures reported on the Schedule of Expenditures of Federal Awards for the year ended September 30, 2023 were $4,093,663.
Identification as a repeat finding, if applicable:
The finding is a repeat finding, finding 2022-004.
Recommendation:
Memorial Health should refine its internal control procedures and retain documentation evidencing that management reviewed expenses charged to FEMA to ensure the expenses are allowable.
Views of responsible officials:
Management agrees with the finding. The FEMA submission request was submitted by management in 2021, which occurred prior to management’s implementation of its corrective action plan to address finding 2022-004. Management performed an independent review of the expenditure for FEMA eligibility as part of an iterative review process with its FEMA consultants and FEMA representatives. This review was also documented in management’s representation on the FEMA online portal when the submission was made. However, management’s process did not include internal documentation to evidence an independent review had occurred prior to submission. The process has been corrected for any future FEMA submissions.