Finding Text
#2022-005 – Material Weakness – Reporting
Opioid STR Grant ALN 93.788
Block Grants for Prevention and Treatment of Substance Abuse 93.959
Criteria
The Organization’s agreements with the Department of Military and Veterans Affairs (DMVA) requires the Organization to submit monthly progress reports no later than 13 business days after the end of each month.
Per the agreements with the Drug and Alcohol Programs, "Unless otherwise specified elsewhere in this Grant Agreement, the following shall apply. Grantee shall submit monthly invoices within 30 days from the last day of the month within which the work is performed. The final invoice shall be submitted within 45 days of the Grant Agreement’s termination date. The Department will neither honor nor be liable for invoices not submitted in compliance with the time requirements in this paragraph unless the Department agrees to an extension of these requirements in writing. The Grantee shall be reimbursed only for services acceptable to the Department."
Condition
During the audit we were not able to obtain the monthly reports filed with the DMVA properly approved by management and there was no date to indicate that the reports were filed within the appropriate period required by the grant agreements.
During our audit, we noted that the Organization reallocated expenses across budget line items without a formal budget modification or tracking of the reallocation. The reallocations were not properly documented and resulted in unsupported expenditures charged to the grant programs.
Cause
The Organization does not have proper internal controls which include the review and approval of monthly reports filed with granting agencies for accuracy and completeness. These policies and procedures should also ensure that all reports are filed within the timeframe in accordance with the grant contract. The Organization also lacks a formal process for budget modifications and tracking of related expense adjustments.
Effect
The potential effect of not having proper review and approval of monthly reports is the potential for errors in the reports that would be caught by an independent review and improper reporting to the granting agencies. Reports not submitted within the required timeframe may not be approved for reimbursement.
Questioned Costs
None
Perspective Information
We reviewed a sample of reports filed with the Drug and Alcohol Program. The finding represents errors noted in all reports reviewed.
Identification as a repeat finding
A similar issue was noted in prior year finding #2021-005.
Recommendation
We recommend that the Organization implement policies and procedures to include a second independent review of the monthly reports filed with the granting agencies for accuracy and completeness. Monthly reports should be properly signed and dated to indicate this review and timely filing of the reports. Additionally, the reports should be filed on the correct basis of accounting and only include expenses of the period for which they are filed.