Core Issue: There was a significant deficiency in internal controls over compliance, specifically related to documentation for cash disbursements.
Impacted Requirements: The agency failed to maintain effective internal controls as required by 2 CFR 200.303, leading to potential risks in managing Federal awards.
Recommended Follow-Up: Review and improve the document retention process to ensure all costs are properly documented and approved before charging to the Federal program.
Finding Text
Federal Agency: U.S. Department of Health and Human Services
Federal Program Name: ACL Centers for Independent Living
Assistance Listing Number: 93.432
Federal Award Identification Number and Year:
2004WAILC3 - 2021
2006WAILC3 - 2021
2104WAILCL - 2022
2106WAILCL – 2022
Pass-Through Agency: N/A
Pass-Through Number(s): N/A
Award Period:
2004WAILC3 - 4/1/2020-9/30/22
2006WAILC3 - 4/1/20-9/30/22
2104WAILCL - 9/30/21-9/29/23
2106WAILCL - 9/30/21-9/29/23
Type of Finding:
Allowable Activities and Allowable Costs - General Disbursements
• Significant Deficiency in Internal Control over Compliance
Criteria or specific requirement: Per 2 CFR 200.303, non-Federal entities must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statues regulations, and the terms and conditions of the Federal award.
Condition: Documentation not maintained to support one cash disbursement.
Questioned costs: None
Context: 1/40 of the general disbursements tested lacked indication of approval. Deemed to be an isolated incident as the particular vendor in question provides physical receipts to DEC, which is an unusual and infrequent method. Limited transactions with said vendor.
Cause: Vendor purchases are in-person and physical receipt is obtained. This is unusual for common vendors used and leads to more opportunity for documentation loss.
Effect: Reimbursement requests could be made for unallowed expenditures.
Repeat Finding: No
Recommendation: Review document retention process to ensure all costs that are charged to a Federal program are adequately reviewed and documentation of that process is maintained. If documentation is not available, costs should not be charged to the Federal program.
Views of responsible officials: There is no disagreement with the audit finding.
Categories
Procurement, Suspension & DebarmentAllowable Costs / Cost PrinciplesCash ManagementSignificant DeficiencyMatching / Level of Effort / EarmarkingInternal Control / Segregation of Duties