Finding Text
Finding 2022-003 ? Approval of Invoices Federal Agency: U.S. Department of Health and Human Services Federal program title: Block Grants for Community Mental Health Services Assistance Listing Number: 93.958 Award Period: 09/30/2021 ? 09/29/2023 and Federal Agency: U.S. Department of Labor Employment and Training Administration Federal program title: YouthBuild Assistance Listing Number: 17.274 Award Period: 01/01/2020 ? 03/31/2023 Type of Finding: Material Weakness in internal control over compliance Criteria: 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 statues, regulations, and conditions of the federal award. Condition: During our review of charges to the Block Grants for Community Mental Health Services program, many charges were incurred on employees? credit cards. The Organization?s credit card process does not have a formal approval process of the charges by the program director prior to being charged to the grant. Charges are to be sent to the program director for review to ensure they are allowable under the grant but the process was not completed consistently. In addition, all credit card receipts are sent to accounting for processing and there is no indication of approval before being charged to the grant or being processed for payment. During our review of charges for the YouthBuild program, we noted expenditures that did not have documentation of proper approval. Context: For the Block Grants for Community Mental Health Services, 42 out of the sample of 60 were relating to credit card charges that did not have documented approvals. For the YouthBuild program, we noted 6 out of the sample of 22 that did not have documentation of proper approval. 5 out of the 6 related to a signed memorandum of understanding with one vendor, however, the individual invoices were not approved.Cause: There is not a formal process to ensure all expenditures are appropriated documented and approved. Effect: For transactions related to federal grants, without the appropriate supporting documentation, charges may be disallowed. Recommendation: We recommend that management establish controls and implement policies to ensure that support is obtained and maintained for all expense transactions.