Finding Text
#2024-003 FINDING: Compliance Controls
Federal Program Affected: H-1B Rural Healthcare Grant, Assistance Listing #17.286.
Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, Eligibility, Earmarking.
Questioned Costs: None.
Condition and Cause: During compliance testing, we noted there was an overall lack of segregation of duties and weaknesses in internal controls related to compliance.
Criteria and Effect: Adequate internal controls are necessary to ensure compliance with federal grant programs. We noted:
1.
There is no formal approval of electronic funds transfers related to the DOL program. The Executive Director receives invoices and remits payment electronically with no subsequent formal review.
2.
We noted 17 federal expenditures out of 60 selected for testing did not have executive director coding or approval to indicate the expenditure was allowable.
3.
Federal grant expenditures were not charged consistently to general ledger accounts. The lack of consistency makes tracking expenditures difficult for federal grant budget categories and for financial statement natural classification. Adjustments were made to reclassify inconsistencies identified during the audit.
4.
Stipends for participants are required to be less than 10 percent of the grant budget. However, there is a lack of consistency when tracking tuition stipends.
5.
We noted a lack of control processes surrounding cutoff of federal expenditures at year end. An adjustment was recorded to correct cutoff of grant expenditures.
6.
Proper supporting documentation for eligibility requirements was not maintained during the year. Eligibility support was obtained during the audit process from participants.
Repeat Finding from Prior Year: Yes, prior year finding 2023-003.
Recommendation: We recommend the Organization continue to develop additional oversight and segregation of duties related to internal controls over compliance.
Response/Corrective Action Plan: See Organization’s Corrective Action Plan