Finding Text
Finding 2023-001 – Internal control deficiency over Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of Performance, Reporting, and Special Tests and Provisions.
Identification of the federal program:
Assistance Listing Number 97.036:
• COVID-19 – Disaster Grants – Public Assistance (Presidentially Declared Disasters)
• U.S. Department of Homeland Security
• Federal Award Identification Number:
o Project Worksheet Number – PA-09-CA-4482-PW-00383(1591)
Federal Award Year – January 20, 2020 to September 22, 2020
o Project Worksheet Number – PA-09-CA-4482-PW-00420(1959)
Federal Award Year – January 20, 2020 to June 30, 2020
o Project Worksheet Number – PA-09-CA-4482-PW-01811(1946)
Federal Award Year – January 20, 2020 to July 1, 2022
• Pass-Through Entity – California Governor’s Office of Emergency Services
Criteria or specific requirement (including statutory, regulatory or other citation):
Title 2, Subtitle A, Chapter II, Part 200, Subpart D, 200.303 – Internal controls. The non-Federal entity must: (a) 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 statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Condition:
We observed management did not design effective internal controls to ensure documentation was retained to evidence the operating effectiveness of the internal controls.
Cause:
Management did not design effective internal controls over the compliance requirements as stated in the criteria or specific requirements section above.
Effect or potential effect:
Management did not design effective internal controls to retain documentation to evidence the operating effectiveness of the internal controls over the projects and related expenses submitted to FEMA for reimbursement.
Questioned costs:
None.
Context:
We did not test internal controls given management did not design effective internal controls to retain documentation to evidence the operating effectiveness of the internal controls over the projects and related expenses submitted to FEMA for reimbursement.
Identification as a repeat finding, if applicable:
No.
Recommendation:
Management should development and implement effective internal controls to ensure documentation is retained to evidence the operating effectiveness of the internal controls over the projects and related expenses submitted to FEMA for reimbursement.
Views of responsible officials:
Management will develop and implement additional internal controls to ensure documentation is retained to evidence the operating effectiveness of the internal controls. These internal controls will ensure expenses included in FEMA grant applications are reported completely and accurately. The additional internal controls will include a reconciliation of application expense detail to final paid invoices along with a notation that each expense is allowed to be included in the FEMA submission. The reconciliation will be reviewed and approved by the Cottage Health Director of Finance prior to final FEMA submission and evidence of the review will be retained.