Finding 512107 (2021-002)

Finding 2021-002 - Material Weakness: Allowable Activities and Costs - Control Finding ALN 93.558 - Temporary Assistance for Needy Families Federal Agency: U.S. Department of Health and Human Services Pass-Through Entity: The State of Tennessee Criteria Or Specific Requirement: Uniform Guidance requires that controls over compliance be properly designed, in place and operating effectively to ensure compliance with the requirements of the federal program. Condition: Based on the testing completed over the allowable activities and costs compliance requirement, the Organization did not retain documentation that expenditures were reviewed and approved prior to payment. Cause: Controls over compliance put in place by management were not operating effectively as it relates to these compliance requirements. Effect: The possibility exists that noncompliance with federal requirements could go undetected without proper controls over compliance. Questioned Costs: Not applicable. Context: During testing performed for allowable activities and costs, appropriate documentation that expenditures were reviewed and approved prior to payment was not retained. For 29 of the 40 expenditures tested, the expenditure was paid without appropriate documentation to support proper review. All 40 expenditures tested appear to be allowable. Statistical sampling was not used to test this compliance requirement. Identification As A Repeat Finding: Not applicable. Recommendation: We recommend that management put a control in place for a review of expenditures prior to payment. The review should be properly documented with the reviewer's signature and the date the review was performed. The review should be performed by someone other than the preparer and who has knowledge of the grant's eligibility requirements. Views Of Responsible Officials: The management agrees with the finding and has put together a correction action plan for finding. See corrective action plan included in this report.