Finding 405700 (2023-003)

Finding 2023-003 Significant deficiency over internal controls and noncompliance for cash management compliance requirement. Federal Agency: Department of Health and Human Services Program Title: Section 223 Demonstration Programs to Improve Community Mental Health Services Assistance Listing Number: 93.829 Award Numbers: 21SM85247A; 1H79SM085247-01 Award Period: August 31, 2021 - August 30, 2022; August 31, 2022 - August 30, 2023 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires a non-federal entity to establish a system of internal controls in order to ensure compliance with compliance requirements under federal awards. Condition/Context for Evaluation During the audit, it was determined that there was no evidence of oversight and approval over the reimbursement requests related to cash management of the federal award. Cause This condition appears to be the result of the Organization not keeping records of their authorized reimbursement requests before it was submitted to the federal program. Effect or Potential Effect Without proper approval or evidence of approval, the Organization could request costs for reimbursement that are not allowed and do not comply with the criteria requirements under Uniform Guidance. Questioned Costs Not applicable. Repeat Finding Yes. 2022-002 Recommendation We recommend that the Organization development a system of internal controls that allows for proper approval and retention of the approval prior to cash draws being made. Views of Responsible Officials Management concurs with the finding and has provided the accompanying corrective action plan.