FAC Explorer

Finding 563807 (2024-001)

Significant Deficiency
Requirement
C
Questioned Costs
-
Year
2024
Accepted
2025-06-04
Audit: 358023
Organization: Healthwest (MI)
Auditor: Roslund Prestage & Company PC

AI Summary

  • Core Issue: Cash was requested over a month before funds were disbursed, violating federal cash management guidelines.
  • Impacted Requirements: This situation breaches 2 CFR 200.305(b), which mandates timely fund transfers and disbursements.
  • Recommended Follow-Up: CMHSP should reassess its cash request processes to align with disbursement timing.

Finding Text

2024-001: CASH MANAGEMENT Type: Considered a significant deficiency in internal control over compliance/immaterial noncompliance Program: ALN 93.788 Opioid STR; grant number H79TI085750 ALN 93.959 Block Grants for Prevention and Treatment of Substance Abuse (SUD Block Grant); grant number B08TI085813 Criteria: As detailed by 2 CFR 200.305(b), “For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means.” Condition: During testing, it was noted that cash was requested prior to disbursement of funds by a month or more. Cause/Effect: This condition appears to be the result of a misunderstanding of the cash management requirements by management. Questioned Cost: Immaterial Recommendation: We recommend that the CMHSP review its methods to ensure that cash requests are made for expenditures for which disbursement has been made.

Corrective Action Plan

Finding 2024-001: Cash Management Federal Grant – ALN 93.788 and ALN 93.959 Condition – During testing, it was noted that cash was requested prior to disbursement of funds by a month or more. Corrective Action –HealthWest finance management will conduct a mandatory staff training session for all relevant staff on cash management requirements, including timing of cash requests, documentation of expenditures, and consequences of non-compliance. Refresher grant compliance and cash management policy review and training will be incorporated into annual training for all grant management personnel. HealthWest will update grant pre-draw process to require a documented review and approval of all cash draw requests by finance leadership or designee ensuring drawdowns are supported by general ledger expenditure activity reports. Contract Person – Brandy Carlson, Chief Financial Officer Anticipated Completion Date – June 30, 2025

Categories

Subrecipient Monitoring Internal Control / Segregation of Duties Cash Management Significant Deficiency

Other Findings in this Audit

  • 563808 2024-001
    Significant Deficiency
  • 1140249 2024-001
    Significant Deficiency
  • 1140250 2024-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.696 Certified Community Behavioral Health Clinic Expansion Grants $732,295
93.788 Opioid Str $721,478
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (sed) $428,783
16.838 Comprehensive Opioid, Stimulant, and Other Substances Use Program $376,770
93.959 Block Grants for Prevention and Treatment of Substance Abuse $128,934
93.778 Medical Assistance Program $79,266
93.575 Child Care and Development Block Grant $67,876
14.259 Community Compass Technical Assistance and Capacity Building $26,967
14.235 Supportive Housing Program $20,397
93.958 Block Grants for Community Mental Health Services $9,581
16.745 Criminal and Juvenile Justice and Mental Health Collaboration Program $3,943