Finding Text
Assistance Listing, Federal Agency, and Program Name 93.224, 93.527; COVID 19: Health Center Program Cluster
Federal Award Identification Number and Year H80CS24134, H8ECS37956, H8FCS40356, and H8GCS48255 2022
Pass through Entity N/A
Finding Type Material weakness and material noncompliance with laws and regulations
Repeat Finding No
Criteria In accordance with notice of awards and the Uniform Data System Health Center Data Reporting Requirements, the health center is required to submit an annual performance report that includes data that reflects all activities in the HRSA health center project.
Condition Due to material entries identified and recorded during the 2022 financial statement audit of the Organization, the data submitted within the annual performance report was not accurate. Additionally, there was no evidence of review over the required reports.
Questioned Costs None
Identification of How Questioned Costs Were Computed N/A
Context The lack of timely appropriate reconciliation impacted significant balances recorded on the balance sheet and statement of activities and changes in net assets. For two out of two reports tested, there was no evidience of review.
Cause and Effect The Organization did not have controls in place to ensure that the preparation of account reconciliation occurred appropriately in a timely manner. See finding 2022 001 for entries identified. In addition, subsequently to starting our audit procedures, the Organization provided us with a significant amount of adjusting journal entries. The entries provided by the Organization subsequent to the commencement of the audit impacted several balance sheet accounts, and had and had an overall impact to decrease change in net assets by approximately $2,000,000. As a result, the reports filed with HRSA are materially incorrect. The Organization did not comply with the related compliance requirement.
Recommendation We recommend that controls be put in place to prepare and review accurate reconciliation with supporting information over all accounting cycles in a timely fashion.
Views of Responsible Officials and Planned Corrective Actions Management agrees with the finding and is evaluating options to implement timely reconciliation process.