Finding Text
2022-006 Department of Health and Human ServicesFederal Financial Assistance Listing #93.498COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural DistributionApplicable Federal Award Number and Year ? Period 1 TIN #376020408Activities Allowed or Unallowed and Allowable Costs/Cost Principles and ReportingMaterial Weakness in Internal Control Over ComplianceCriteria: 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: There was no evidence of formal review and approval over tracking of expenditures that wereclaimed for the program. In addition, there was no evidence retained that the Hospital?s special reportsubmitted to the Department of Health and Human Services for Period 1 TIN #376020408 was reviewed orapproved by an individual separate from the preparer prior to submission. The approval for individual payroll and fringe benefit expenditures was not retained in the transition to a new payroll software, and certain other expenditures did not have retained approval.Cause: The Hospital did not have an internal control process in place to ensure documentation of review and approval was retained for individual expenditures, the workpaper tracking expenditures claimed under the federal program, and the special report submitted to the Department of Health and Human Services for Period 1.Effect: The lack of adequate policies governing review, approval, and retention of documents increases the risk that employees participating in the federal awards administration may not be able to detect and correct noncompliance in a timely.Questioned Costs: None reported.Repeat Finding from Prior Years: NoRecommendation: We recommend the Hospital enhance internal control policies to ensure that formal documentation of review and approval is obtained and retained.Views of Responsible Officials: Management agrees with the finding.