Finding Text
2024-001 Internal Controls over Preparation of the Schedule of Expenditures of Federal Awards and Reporting for Maine DHHS 93.667 Social Services Block Grant (SSBG) and Maine DHHS 21.027 COVID-19 - Coronavirus State and Local Fiscal Recovery Funds (Significant Deficiency in Internal Controls over Compliance and Noncompliance)
Criteria: 2 CFR 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards, £200.508(b) The auditee must prepare appropriate statements including an accurate Schedule of Expenditures of Federal Awards (SEFA) in accordance with £200.510, Financial Statements. Federal reporting standards require the timely and accurate filing of reports as required by pass-through grantor agreements.
Condition and Context: Agreement Closeout Report filed for the Agreement ADS-23-3351D (Social Services Block Grant) for the component period ended 6/30/24 was filed late by 27 days. In addition, the report contained inaccuracies including use of fee-for-service rates that were not specified by the Fee For Service Rider. Reporting for the period ended 6/30/24 contained inaccuracies resulting from budgeted income and expenses sourced from an outdated contract amendment, budgeted percentage of expenses reimbursable by state and federal agreement funds, and the total component amount received by the provider for service months in the reporting period.
In addition, to the conditions noted above, the following errors were noted and corrected as a result of auditing procedures on the SEFA:
• Social Services Block Grant expenditures were overstated by $159,088 due to errors in accounting for expenditures of the grant which were based on outdated calculations.
• Federal expenditures were understated for the State of Maine DHHS Agreement ADS-23-3004B (93.044 Special Programs for the Aging – Title III, Part B, Grants for Supportive Services and Senior Centers) by $27,492 due to errors in reconciling grant reports to the SEFA.
• Federal expenditures were overstated for the State of Maine DHHS Agreement ADS-24-3004B (Coronavirus State and Local Fiscal Recovery Funds) by $25,500 due to errors reconciling grant reports to the SEFA.
Cause: There is a gap in training and understanding of the instructions for the Maine DHHS Agreement Closeout Report and Quarterly Financial Report. There are insufficient internal controls over the preparation, review, and documentation process for the SEFA and supporting documents.
Effect: The Agreement Closeout Report was filed 27 days late. The Agreement Closeout Report was filed using incorrect reporting forms. Due to errors in entering federal funds available for cost sharing and calculating department funds not utilized, Agreement Cost Sharing percentages were incorrectly calculated by the reporting form. Incorrect component agreement funds and budgeted income and expenses were referenced, as key information was omitted which prevented the quarterly reports from calculating the amounts due to or from the Agency. Errors in reporting can lead to issues in reconciling and tracking of awards earned and recognized in the financial statements. They could also lead to findings and corrective action with funders.
Recommendation: Management should review their processes and procedures over review and approval of reporting, and for tracking of reporting deadlines. Both the preparer and reviewer should have a clear understanding of the required minimum elements and instructions. As part of the review, all required minimum elements should be vouched to original source documents including copies of awards, grant reporting, and the trial balance profit and loss reports. Any inconsistencies should be resolved before submission. Management should strengthen their controls for the tracking of required report filings and their due dates. Management should consider training for staff tasked with completing, reviewing, and filing these reports.
Views of Responsible Officials and Planned Corrective Actions: Management will review and update processes and procedures over reporting and additional training will be provided as needed to prevent future findings.