Finding Text
Federal Agency: Department of Health and Human Services
Federal Assistance Listing Number: 93.959
Program: Block Grants for Prevention and Treatment of Substance Abuse Program
Award/Pass-Through Entity Identifying Numbers: Washington State Health Care Authority
Criteria: The grant agreement requires that the Organization comply with period of performance as a direct and material compliance requirement. The Organization should have a system of internal control designed and operating to ensure that requirements related to performance of performance and cutoff are achieved.
Condition and Content: Due to lack of internal controls over financial reporting, the Organization did not properly record all grant expenses in the proper periods, resulting in a compliance finding related to the period of performance direct and material compliance requirement.
Questioned Costs: None.
Cause: The Organization does not have internal controls in place to ensure proper cutoff such that expenditures are always recorded in the proper period.
Repeat Finding: N/A
Effect: Expenditures could be submitted for federal awards during the wrong contract period.
Recommendation: We recommend the Organization complete a review of the entity’s financial statements and internal control environment to ensure that key controls are properly designed to support the preparation of timely and accurate financial statements including consideration of transactions dates to ensure expenditures are properly reported in the correct period and accrued for if necessary.
Management’s Response: Management agrees with the finding. Management plans to complete a review of resources assigned to accounting and finance departments as well as identify and implement sufficient internal controls over expenditures cutoff to ensure compliance with the period of performance compliance requirement.