Finding Text
Assistance Listings number
and name: 93.575 Child Care and Development Block Grant
Award numbers and years: DI22-002326, July 1, 2023 through June 30, 2024;
P00003796, July 1, 2023 through June 30, 2024;
P0001273602, July 1, 2023 through June 30, 2024
Federal agency: U.S. Department of Health and Human Services
Pass-through grantor: Arizona Department of Economic Security
Compliance requirements: Reporting
Questioned costs: Not applicable
Condition—Contrary to federal regulation, the District’s Student Affairs Department (Department) did not develop, document, or implement internal control procedures to monitor compliance with the program’s reporting requirements. Specifically, for all 4 federal program reports we tested, the Department did not retain documentation that it had reviewed and approved reports prior to submitting them to the pass-through grantor to ensure the reported expenditures were accurate and agreed to the District’s records, and contained only allowable expenses. Despite lacking internal control procedures, we did not identify any inaccurate program information reported to the pass-through grantor.
Effect—Without effective internal control procedures in place, there is an increased risk that the Department may not prevent or detect and correct errors on reports it submits to the pass-through grantor, which relies on them to effectively monitor the program administration, including its compliance with program requirements and ability to prevent and detect fraud, and to evaluate the program's success. Finally, the District is at risk that this finding applies to other federal programs it administers.
Cause—The Department’s management reported that it had performed independent reviews and approvals of the reports but did not maintain documentation because the District did not have a formal policy requiring a documented review and approval of its reports.
Criteria—Federal regulation requires establishing and maintaining effective internal control over federal awards that provides reasonable assurance that federal programs are being managed in compliance with all applicable laws, regulations, and award terms (2 CFR §200.303).
Recommendation—The Department should develop, document, and implement policies and procedures, and train responsible employees, to monitor compliance with the program’s reporting requirements, including processes to perform and document an independent review and approval of all federal program reports before submitting them to the pass-through grantor to ensure reports are accurate, agree to District records, and contain only allowable expenditures.
The District’s corrective action plan at the end of this report includes the views and planned corrective action of its responsible officials. We are not required to audit and have not audited these responses and planned corrective actions and therefore provide no assurances as to their accuracy.