Finding 542005 (2024-003)

Finding Reference: 2024-003 – H. Period of Performance 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: Timely Payment of Financial Obligations 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.” In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.344(c), Closeout, “The recipient must submit, no later than 120 calendar days after the end date of the period of performance, all financial, performance, and other reports as required by the terms and conditions of the Federal award.” Condition Management’s monitoring control over compliance with applicable period of performance requirements and timely payment of the reported expenditures following their reimbursement from BHSB was not designed appropriately to ensure all expenditures were paid within the specific period of performance.   Cause The Corporation did not process payments to one vendor within the applicable period of performance requirement for federal award expenditures reimbursed by the BHSB. Effect or potential effect The expenditures included in the BHSB submissions are not in compliance with applicable period of performance requirements. Questioned costs $17,151 represents Federal expenditures that remained unpaid or were paid outside of the 120 days following the end date of the period of performance for the following subawards: • 93.959: BH031 - OUD MEETS-OTP-UMMC - $ 3,589 • 93.959: BH031 - OUD MEETS-HOS-UMMC - $13,562 Identification of a repeat finding No. This is not a repeat finding. Context As part of our testing, we selected 25 expenditures. We identified that four selections or $1,695 of the total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. This was isolated to one vendor that is set up under the Corporation’s group purchasing process. As part of our testing, there were $4,362 purchases tested and $36,943 total purchases related to the one vendor within the grant period. Due to complexities of group purchase billing and recording for the vendor, management further investigated and identified that $17,151 of total expenditures within the grant period or approximately 5% of total expenditures remained unpaid or were paid outside of the 120 days from the end of the period of performance or June 30, 2024. Recommendation As the grant period has ended, we recommend that the Corporation works with the funding agency to remedy the period of performance noncompliance. In addition, we recommend that the Corporation reassess the design of its period of performance controls to identify where enhancement or additional controls are needed over liquidation of financial obligations subsequent to the end of a grant award. View of responsible officials There is no disagreement with the audit finding.