Finding Text
Finding 2023-02 Material Weakness in Internal Control Over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Period of Performance and Reporting
Assistance Listing Numbers
93.958 Block Grants for Community Mental Health Services
93.959 Block Grants for Prevention and Treatment Substance Abuse
Federal Agency: U.S. Department of Health and Human Services
Passthrough Agency: Illinois Department of Human Services
Award Number/Year: 2023
Criteria
The Organization is responsible for keeping an accurate accounting of all federal expenditures and maintaining all of the required documentation and reports in accordance with applicable federal regulations.
Condition
For AL No. 93.958, Block Grant for Community Mental Health Services, a sample of fourteen (14) expense transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. For AL No. 93.959, Block Grant for Prevention and Treatment of Substance Abuse, a sample of fourteen (14) expense transactions were tested for Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance. The Organization was not able to provide vendor invoices for any of the expense transactions selected for testing. We did note that the expense transaction details matched the appropriate vouchers for reimbursement and supporting documentation of vendor payment.
It was also noted that one person prepared, reviewed and submitted all vouchers and reports which is an indication of improper segregation of duties.
Cause
The Organization did not follow its established policies and procedures which resulted in new accounting and grant administration personnel not knowing where appropriate documentation was stored so that it could be readily available when required.
Effect
The Organization is not in compliance with the Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Period of Performance requirements of its grant agreements within its federally funded programs as prescribed by Uniform Guidance.
Questioned Costs
See scope limitation.
Repeat Finding
Yes
Recommendation
We recommend that the Organization implement the following corrective actions:
• Enforce its current specific internal control procedures to ensure compliance with applicable federal regulations.
• Require that all personnel files have authorization and approval of current pay rates along with correspondence regarding to which grant an employee’s salary and fringe benefits should be expensed including any allocations if the employee worked on several grants.
• Require that all expenses have proper invoices with approvals and should be organized within the Organization’s office.
• Require that vouchers have all related invoices attached to them and be reconciled with monthly, quarterly and close-out financial reports.
• Require that all vouchers and reports be prepared by one individual and independently reviewed and approved by a second individual prior to submission. There should be documentation of the review such as a sign-off or initials.
• Require that all vouchers and reports should be filed timely in accordance with the various grant agreements.
• Require that correspondence be received from those agencies indicating that required reports per the written grant agreements are not necessary when applicable.
• Ensure that the data collection form is filed the earlier of thirty (30) days after the report date or no later than nine months after the fiscal year-end.
Views of Responsible Officials and Planned Corrective Actions
See corrective action plan.