Finding 503564 (2022-007)

Material Weakness Repeat Finding
Requirement
L
Questioned Costs
-
Year
2022
Accepted
2024-10-23

AI Summary

  • Core Issue: KCHC failed to submit accurate SF-425 reports, leading to noncompliance with federal reporting requirements.
  • Impacted Requirements: The inaccuracies violate 2 CFR section 200.328, which mandates precise financial reporting.
  • Recommended Follow-Up: Implement monitoring processes to ensure SF-425 reports align with accounting records and support reported expenditures.

Finding Text

Finding No. 2022-007 Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Reporting Questioned Costs: $-0- Criteria: In accordance with 2 CFR section 200.328 and applicable reporting requirements, the Program is required to submit an accurate SF-425, Federal Financial Report. Condition: For three (or 100%) SF-425 reports tested, the following variances were noted: 1. Grant Award H80CS31624 - 04/30/2022 Reporting Period End Date: 2. Grant Award H8DCS36429 - 03/31/2022 Reporting Period End Date: 3. Grant Award H8FCS41048 - 03/31/2022 Reporting Period End Date: Finding No. 2022-007, continued Federal Agency: U.S. Department of Health and Human Services AL Program: 93.224 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Federal Award No.: H8031624, H8F41048, H8D36529 Area: Reporting Questioned Costs: $-0- Cause: KCHC did not effectively monitor the accuracy and completeness of the SF 425 report based on underlying accounting records. Effect: KCHC is in noncompliance with the SF-425 federal reporting requirements. No questioned costs are presented as the variances are due to reporting errors. Identification as a Repeat Finding: Finding No. 2021-007 Recommendation: Responsible personnel should take steps to monitor reports and determine that expenditures and program income reported on the SF-425 report are supported by underlying accounting reports. Views of Responsible Officials: Management agrees with the finding and has developed a plan to correct the finding. Refer to separate Corrective Action Plan.

Corrective Action Plan

Finding No. 2022-007 We agree and acknowledge the audit findings related to the reporting discrepancies identified in Finding No. 2022-007, associated with our Federal Awards: H8031624, H8F41048, and H8D36529 under the U.S. Department of Health and Human Services (AL Program 93.224). To address this issue and ensure that future SF-425 reports are accurately aligned with the underlying accounting records, KCHC has implemented the following corrective actions: 1. Enhanced Reporting Procedures: A rigorous review process has been put in place to reconcile the SF-425 reports with the underlying accounting records before submission. The finance team will reconcile program expenditures and income monthly, ensuring that all figures match the accounting system's data. 2. Monthly Reconciliations: To maintain accurate and up-to-date records, we have implemented a monthly reconciliation schedule for all federal grants. This practice allows us to monitor the program's financial data consistently, reducing the possibility of variances between the reported and actual figures. 3. Training and Education: Our finance personnel have undergone additional training on SF-425 reporting requirements and reconciliation processes. This ensures that they are fully aware of federal guidelines and capable of handling reporting tasks accurately. 4. Improved Internal Controls: To further ensure compliance, we have enhanced our internal controls by requiring dual approval of all SF-425 reports. Both the preparer and the Chief Financial Officer (CFO) will review the reports to verify that the data aligns with the accounting records before final submission. We have also incorporated periodic internal audits to detect potential errors early. 5. Use of Integrated Software Systems: To improve accuracy and tracking, KCHC has integrated its accounting and procurement systems (ProcurementExpress) to facilitate real-time data entry and reconciliations for grants. These systems enhance the workflow and reduce the risk of manual errors. Implementation Timeline: Implemented in August 01, 2024 and by the end of Fiscal Year in April 30, 2025, KCHC will be in full compliance with the SF425 reporting requirements. Responsible person: Arlene Deleon Guerrero, CFO

Categories

Reporting

Other Findings in this Audit

  • 503560 2022-003
    Significant Deficiency Repeat
  • 503561 2022-004
    Significant Deficiency
  • 503562 2022-005
    Material Weakness Repeat
  • 503563 2022-006
    Material Weakness Repeat
  • 503565 2022-003
    Significant Deficiency Repeat
  • 503566 2022-004
    Significant Deficiency
  • 503567 2022-005
    Material Weakness Repeat
  • 503568 2022-006
    Material Weakness Repeat
  • 503569 2022-007
    Material Weakness Repeat
  • 503570 2022-003
    Significant Deficiency Repeat
  • 503571 2022-004
    Significant Deficiency
  • 503572 2022-005
    Material Weakness Repeat
  • 503573 2022-006
    Material Weakness Repeat
  • 503574 2022-007
    Material Weakness Repeat
  • 1080002 2022-003
    Significant Deficiency Repeat
  • 1080003 2022-004
    Significant Deficiency
  • 1080004 2022-005
    Material Weakness Repeat
  • 1080005 2022-006
    Material Weakness Repeat
  • 1080006 2022-007
    Material Weakness Repeat
  • 1080007 2022-003
    Significant Deficiency Repeat
  • 1080008 2022-004
    Significant Deficiency
  • 1080009 2022-005
    Material Weakness Repeat
  • 1080010 2022-006
    Material Weakness Repeat
  • 1080011 2022-007
    Material Weakness Repeat
  • 1080012 2022-003
    Significant Deficiency Repeat
  • 1080013 2022-004
    Significant Deficiency
  • 1080014 2022-005
    Material Weakness Repeat
  • 1080015 2022-006
    Material Weakness Repeat
  • 1080016 2022-007
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $100,511
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $85,996