Finding Text
ALN 93.958 Block Grants for Community Mental Health Services
Pass-through Entity Identification Number GRK 213195
U.S. Department of Health and Human Services
Minnesota Department of Human Services
Finding 2023-003
Compliance Requirement: Allowable Costs/Cost Principles
Type of Finding: Material Weakness
Criteria: OMB’s Uniform Guidance requires nonfederal entities to establish and maintain effective internal control over federal awards that provides reasonable assurance that the awards are being managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award, and permit the preparation of reliable financial statements and Federal Reports.
Condition: The system used for processing transactions does not include documentation that transactions have been reviewed for compliance with OMB regulations, before they are charged to a federal grant. In a population of 60 transactions, there was no documentation of any control step that would prevent a transaction that should not be charged to a federal grant, from being charged to a federal grant in error.
Cause: The Organization’s staff did not receive training on OMB Uniform Guidance guidelines to understand the need for internal control over compliance and how this should be documented.
Effect or Potential Effect: The system in place is not effective to prevent an unallowable cost from being charged to a federal grant.
Questioned Costs: Unknown
Repeat Finding: This finding is a repeat finding (see prior year finding number 2022-004)
Recommendation: The Organization should establish an in-house accounting staff and have them obtain additional training on Uniform Guidance and federal grant management so that a system of internal control over compliance can be installed.
Views of Responsible Officials: American Child Wellness Institute, Inc. is in agreement with the audit finding.