Finding Text
2023-003 — Allowable Cost/Allowable Activities – Significant Deficiency in Internal
Controls Over Compliance and Noncompliance
Federal program information:
Funding agency: U.S. Department of Health and Human Services
Title: Urban Indian Health Service
ALN number: 93.193
Award years and number: 1/1/2018–12/31/2022, 75H70921C00004 &
H722IHS0138-20-00
Pass-through entity: (if applicable) N/A
Criteria: According to the Uniform Guidance (2 CFR § 200.303 - Internal Controls) and the
Center’s internal control policies, adequate documentation must be maintained to support all
transactions, including evidence of approval and authorization by designated personnel.
Condition: 2 of the 25 nonpayroll transactions tested did not have the required approval and
authorization forms retained, thus, the auditor could not verify if the expenses were properly
approved and authorized.
Questioned Costs: None.
Cause: Management has not designed a proper system of internal control to ensure that all
nonpayroll disbursements have authorized supporting documentation.
Effect: Without a proper authorization process, unallowable costs or activities may be
charged to the federal program, which could lead to the withdrawal of funding from the
federal government.
Auditor’s Recommendations: Management should design and implement an internal control
system that properly maintains the required documentation.
Management Response: All Nations Health Center has a more lenient approval process for
must have charges that are under the “auto-pay” status. All Nations has moved away from
this leniency and will require all “auto-pay” must have charges to go through the regular
approval process.