Finding Text
Finding 2023-004: Significant Deficiency in Internal Control - Review and Approval
Assistance Listing Number: 93.498 COVID-19 - Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution
Federal Agency: U.S. Department of Health and Human Services
Pass-Through Agency: Not applicable
Award Number / Year: N/A / 2022
Compliance Requirements: Activities Allowed or Unallowed/ Allowable Costs
Criteria: As outlined in Pub. L. No. 116-136, 134 Stat. 563 and Pub. L. No. 116-139, 134 Stat. 622 and 623, funds are appropriated to prevent, prepare for, and respond to coronavirus, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. That funds appropriated under this paragraph in this Act shall be available for building or construction of temporary structures, leasing of properties, medical supplies and equipment, including personal protective equipment and testing supplies, increased workforce and trainings, emergency operation centers, retrofitting facilities and surge capacity. Uniform Guidance requires that charges to federal awards must be based on records that are supported by a system of internal controls that provide reasonable assurance about the accuracy, allowability and proper allocation of the charges.
Condition and Context: During our testing of accounts payable, we noted that four expenditure samples out of 7 tested for covid related expenses were supported by an invoice that was for allowable expenses, but there was no evidence of review and approval by an appropriate individual for proper authorization of payment. This was not a statistically valid sample.
Effect: Although the underlying expenses are allowable expenditures under the provider relief program, the support was not maintained to document to approval as required by Uniform Guidance, therefore this is considered a significant deficiency in internal controls.
Questioned Cost: None
Cause: The Center does not have an adequate polices and systems needed to implement a properly designed system of controls over these significant transaction cycles.
Recommendation: Policies and procedures related to review and approval around disbursements should be assessed to determine whether additional review procedures or further segregation of duties are feasible.
Management's Response: Management agrees with the finding. While we have policies and procedures as recommended by the auditors, there is an opportunity to review our policies and procedures related to the review and approval around disbursements. Through the leadership of our Chief Financial Officer and our Director of Finance, our internal control policies and procedures will be evaluated and as needed, amended, with an effective date no later than June 30, 2025.