Finding Text
Finding No.: 2019-005
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04 and 6U79SM062447-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $16,190
Criteria:
In accordance with 2 CFR Part 200, Subpart E, cost must be necessary and reasonable for the performance of the federal award and be allocable thereto. Further costs must conform to any limitations or exclusions and be adequately documented.
Condition:
Of sixty nonpayroll expenditures tested, aggregating $39,974 of a total population of $330,391, the following deficiencies were noted:
1. For five (or 8%), check/wire transfer payment vouchers were not signed and were not stamped as paid; accordingly, CHCC was not able to substantiate that the expenditures were approved.
2. For twenty-seven (or 45%), the check/wire transfer payments were not provided.
Finding No.: 2019-005, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04 and 6U79SM062447-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $16,190
Condition, continued:
Of twenty-five payroll expenditures tested, aggregating of $35,967 of a total population of $433,601, the following deficiencies were noted:
3. For one (or 4%), the Request for Personnel Action and Notification of Personnel Action forms for employee number 373605 (Business Unit H71040, amounting to $625), covering payperiod ended 10/13/18, were not provided, for which the amount is questioned.
Finding No.: 2019-005, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04 and 6U79SM062447-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $16,190
Condition, continued:
4. For one (or 4%), payperiod ended 04/13/19 payroll register substantiating the payroll cost of $529 for Employee No. 403867 (Business Unit H81040) was not provided, for which the amount is questioned.
Cause:
CHCC did not enforce recordkeeping and monitoring controls over compliance with applicable allowable costs/cost principles requirements.
Effect:
CHCC is in noncompliance with the applicable allowable costs/cost principles requirements and questioned costs of $16,190 result as the projected questioned costs exceed the $25,000 threshold.
Identification as a Repeat Finding: Finding No. 2018-011.
Recommendation:
Responsible CHCC personnel should establish recordkeeping system whereby underlying support for each transaction is substantiated and filed. Further, the responsible CHCC personnel should ensure that payment vouchers are approved and stamped as paid.
Finding No.: 2019-005, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED)
Award Number: 5U79SM062447-04 and 6U79SM062447-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $16,190
Views of Responsible Officials:
CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1, 2 and 4, and states agreement for Condition 3.
Auditor Response:
Condition 1 - Batch headers evidencing approvals were not provided.
Condition 2 - Cancelled checks provided comprised of numerous invoice payments for which corresponding check vouchers were not provided; thus, CHCC was not able to substantiate whether cancelled checks provided pertain to transactions being tested.
Condition 4 - The payroll register provided for PPE 04/13/19 did not reflect the employee’s payroll costs.
In addition, initial draft reports were provided to CHCC on 09/06/24 and 09/24/24. It was also agreed during the 09/06/24 and 10/04/24 meetings for CHCC to provide corresponding underlying accounting records to resolve the finding; however, no documentations were provided within the agreed timeline. Accordingly, finding is sustained.