Finding No.: 2019-008
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5H79SM062879-02 and 6U79SP020710-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $452,311
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 non-payroll expenditures tested, aggregating $88,128 of a total population of $1,284,340, the following deficiencies were noted:
1. For twenty (or 33%), payments comprised of various invoices for which payment details were not provided. Accordingly, CHCC was not able to substantiate payments made for the following expenditures agreed to the invoice amounts.
Finding No.: 2019-008, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5H79SM062879-02 and 6U79SP020710-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $452,311
Condition, continued:
2. For ten (or 17%), either the trip reports, travel vouchers, boarding passes and/or documentations supporting travel cash advances and perdiem calculations were not provided.
3. For nineteen (or 32%), check payments were not provided.
Finding No.: 2019-008, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5H79SM062879-02 and 6U79SP020710-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $452,311
Condition, continued:
4. For two (or 3%), invoices were not provided. No questioned costs are presented as amounts are questioned at Condition 3.
Finding No.: 2019-008, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5H79SM062879-02 and 6U79SP020710-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $452,311
Condition, continued:
Of twenty-five payroll expenditures tested, aggregating $33,121 of a total population of $686,242, the following deficiency was noted.
5. For one (or 4%), payperiod ended 04/13/19 payroll register substantiating the payroll cost of $349 for Employee No. 403867 (Business Unit H9243B) was not provided, for which the amount is questioned.
Test of grant awards noted the following:
6. Cumulative expenditures of $1,144,077 exceeded the grant award’s funding limit of $718,339 for Business Unit H9243B, resulting in an excess amount of $425,738. Documentation of any increase in funding limit was not provided, for which the excess amount of $425,738 is questioned.
Cause:
CHCC did not enforce recordkeeping controls in accordance with applicable allowable costs/cost principles requirements.
Effect:
CHCC is in noncompliance with allowable costs/cost principles requirements and questioned costs of $$452,311 result.
Identification as a Repeat Finding: Finding No. 2018-015.
Finding No.: 2019-008, continued
Federal Agency: U.S. Department of Health and Human Services
CFDA Program: 93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Award Number: 5H79SM062879-02 and 6U79SP020710-04M001
Area: Allowable Costs/Cost Principles
Questioned Costs: $452,311
Recommendation:
The responsible personnel should establish a recordkeeping system whereby underlying support for each transaction is processed timely and filed accordingly for easy retrieval to substantiate costs. The responsible personnel should not approve program expenditures unless underlying support is provided for review.
Views of Responsible Officials:
CHCC’s Corrective Action Plan provides a detailed rationale for disagreement with the finding described in Conditions 1 to 6.
Auditor Response:
Condition 1 - Payment vouchers were not provided.
Condition 2 - Underlying travel documentations were not provided.
Condition 3 - Cancelled checks were not provided.
Condition 4 - Of the $25,000 for Document Number 1452571, $2,079 was not supported with an invoice. In addition, the invoice for Document 1479633 was not provided.
Condition 5 - The payroll register provided for PPE 04/13/19 did not reflect the employee’s payroll costs.
Condition 6 - Grant awards provided only equates to $718,339. Grant award documentation of the increase in funding limit was not provided.
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.