Finding 542004 (2024-002)

Finding Reference: 2024-002 – C. Cash Management; L. Reporting Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing 93.959 – Block Grants for Substance Use Prevention, Treatment, and Recovery Services Award Periods: June 1, 2023 – June 30, 2024 Description: Evidence of Review and Approval of the Reported Expenditures and Timely Report Submission Type of Finding: Compliance and Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.”   The major program includes two sub-vendor contracts between the granting agency, BHSB and the University of Maryland Medical Center (UMMC) for the OUD MEETS Medical Patient Engagement – OTP and OUD MEETS Medical Patient Engagement – Hospital programs. In accordance with both subaward contract terms within Section 2, Financial Reporting and Payment for Services, “invoices are due by the 15th day of the month following the invoice period.” Condition The Corporation did not have appropriately designed internal controls in place over the grant subaward related to review and approval of the expenditures that were included in the BHSB submissions and timeliness of the submissions. Cause The Corporation did not retain sufficient evidence of the review and approval of the expenditures reported to BHSB in the required submissions nor were all submissions made with the required 15-day period. Effect or potential effect The expenditures included in the BHSB submissions could be inaccurate or information reported may be incomplete or untimely. Questioned costs None. Identification of a repeat finding No. This is not a repeat finding.   Context On a monthly basis, the expenditures are compiled and reconciled to the cash reimbursement request and internal tracking spreadsheet. The Corporation submitted a total of 24 BHSB cash reimbursement submissions for the subawards. The total payments received by the Corporation was $352,026. During the last quarter of the grant period, there were changes in employee responsibilities due to employee turnover. Specific to the last quarter of the grant period, for the related monthly BHSB cash reimbursement submissions and the 440 annual financial report submissions, management did not retain documentation to evidence review and approval of the expenditures requested for cash reimbursement. The total expenditures submitted for reimbursement were $111,705 or approximately 32% for the last quarter of the grant period. As part of our testing, we selected 10 out of the 24 BHSB cash reimbursement submissions throughout the grant period, and 9 out of the 10 submissions were not submitted timely. We agreed the ten samples to supporting underlying documentation for each of these selections totaling $215,208. Three of the ten selections totaling $78,336, were within the last quarter. Audit procedures did not identify any unallowable costs when compared to the underlying supporting documentation of the expenditure. Recommendation Management should reassess the design of its controls to ensure submissions to BHSB are made timely within the required 15-day period and that documentation is retained that evidences the review and approval of expenditures submitted to BHSB for reimbursement. View of responsible officials There is no disagreement with the audit finding.