Finding 523406 (2023-002)

Significant Deficiency
Requirement
L
Questioned Costs
-
Year
2023
Accepted
2025-02-17
Audit: 342673
Organization: Houston Recovery Center, Lgc (TX)

AI Summary

  • Core Issue: Houston Recovery Center failed to properly review and approve reimbursement requests for federal programs, risking incorrect billing and reimbursement.
  • Impacted Requirements: Internal controls over government grant billings were inadequate, violating management responsibilities under generally accepted accounting principles and Uniform Guidance.
  • Recommended Follow-Up: Provide training to staff on the importance of independent review and approval processes to ensure compliance with policies and procedures.

Finding Text

Finding #2023-002 – Significant Deficiency. Major federal programs: U. S. Department of Treasury, Assistance Listing #21.027, COVID-19 Coronavirus State and Local Fiscal Recovery Funds, Passed through Harris County, Texas, Contract #220163, Contract year: 12/01/22 – 12/31/24, Assistance Listing #93.788, Opioid STR, Passed through the Texas Health and Human Services Commission Contract #HHS000357900001, Contract years: 09/01/21 – 08/31/22 and 09/01/22 – 08/31/23, Passed through the University of Texas Health Science Center, San Antonio, Contract #HHS000561800001, Contract year: 09/01/21 – 08/31/22. Other federal programs: U. S. Department of Health and Human Services:, Assistance Listing #93.243, Substance Abuse and Mental Health Services Projects of Regional and National Significance, Contract #5H79TI080624-03, Contract year: 09/30/21 – 09/29/22, Contract #5H79TI080624-04, Contract year: 09/30/22 – 09/29/23, Passed through the City of Houston Health Department, Assistance Listing #93.243, Contract #H79SP080300, Contract years: 11/01/21 – 10/31/22, 11/01/22 – 10/31/23 and 06/08/21 – 06/30/23, Assistance Listing #93.959, Block Grants for Prevention and Treatment of Substance Abuse, Passed through the Texas Health and Human Services Commission, Contract #HHS000130500019, Contract years: 09/01/21 – 08/31/22 and 09/01/22 – 08/31/23. Criteria: Reporting – Management is responsible for establishing and maintaining an effective system of internal control over government grant billings to ensure all costs are reimbursed and that government grant revenue and receivables are properly reflected in the financial statements in accordance with generally accepted accounting principles and the Uniform Guidance. Condition and context: Houston Recovery Center is required to submit monthly reimbursement requests for five of its federal programs; one program requires reimbursement requests based on achievement of certain milestones rather than time. Out of a sample of 17 requests for the five reimbursement programs, we found six did not have evidence of review and approval as required by Houston Recovery Center’s policies and procedures. Cause and effect: The Senior Grant Accountant position did not provide the grant reimbursements to the Executive Director for review and approval prior to submission. The person in this role has transitioned. Failure to establish and maintain an adequate internal control system over government grant billings could result in the Houston Recovery Center not being reimbursed for program costs or overbilling government grants. Recommendation: Training should be provided to ensure that policies and procedures regarding independent review and approval are followed. Views of responsible officers and planned corrective action: Management agrees with the finding. See Corrective Action Plan.

Categories

Cash Management Reporting Significant Deficiency Internal Control / Segregation of Duties

Other Findings in this Audit

  • 523399 2023-001
    Material Weakness
  • 523400 2023-002
    Significant Deficiency
  • 523401 2023-001
    Material Weakness
  • 523402 2023-002
    Significant Deficiency
  • 523403 2023-001
    Material Weakness
  • 523404 2023-002
    Significant Deficiency
  • 523405 2023-001
    Material Weakness
  • 523407 2023-001
    Material Weakness
  • 523408 2023-002
    Significant Deficiency
  • 523409 2023-001
    Material Weakness
  • 523410 2023-002
    Significant Deficiency
  • 1099841 2023-001
    Material Weakness
  • 1099842 2023-002
    Significant Deficiency
  • 1099843 2023-001
    Material Weakness
  • 1099844 2023-002
    Significant Deficiency
  • 1099845 2023-001
    Material Weakness
  • 1099846 2023-002
    Significant Deficiency
  • 1099847 2023-001
    Material Weakness
  • 1099848 2023-002
    Significant Deficiency
  • 1099849 2023-001
    Material Weakness
  • 1099850 2023-002
    Significant Deficiency
  • 1099851 2023-001
    Material Weakness
  • 1099852 2023-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
21.027 Coronavirus State and Local Fiscal Recovery Funds $490,328
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $281,568
93.959 Block Grants for Prevention and Treatment of Substance Abuse $193,291
93.788 Opioid Str $28,876