Finding Text
Item: 2024-001
Assistance Listing Number: 93.243
Program: Substance Abuse and Mental Health Services, Projects of Regional and National Significance
Federal Agency: U.S. Department of Health and Human Services
Pass-Through Agency: N/A
Contract Number: 5H79TI082775-02
Award Year: 9/30/2023 – 9/29/2024
Compliance Requirement: Cash Management, Reporting
Criteria: Per 2 CFR 200.305, under the reimbursement method, expenditures must be incurred prior to the date of the reimbursement request. The Organization is also responsible for submitting an annual Federal Financial Report (“FFR” or SF-425) to the U.S. Department of Health and Human Services, Substance Abuse and Mental Health Services Administration.
Condition: The Organization erroneously included a duplicate request for reimbursement in a monthly reimbursement request report submitted to the granting agency and was overpaid by the amount of this duplicate request for reimbursement totaling $41,042. Additionally, the total expenditures reported in the FFR/SF-425 were misstated by $23,058.
Questioned Costs: $41,042
Context: In our testing of the annual FFR/SF-425, we noted that the total expenditures reported did not agree to the expenditures reported on the Schedule of Expenditures of Federal Awards by $23,058. Upon further investigation and review of each monthly request for reimbursement submitted for fiscal 2024, we noted a duplicate reimbursement request totaling $41,042. Additionally, we noted that $17,984 representing an expense accrual at September 30, 2024, while properly reflected on the Schedule of Expenditures of Federal Awards, was not properly included in the detail of expenditures noted in the FFR/SF-425 for fiscal 2024. As a result, the FFR/SF-425 misreported expenditures by $23,058, the net of the two errors noted above.
Effect: The duplicate federal draw request resulted in a duplicate payment from the grantor. Thus, the Organization has drawn federal funds in excess of the federal expenditures incurred totaling $41,042, which is reported as a questioned cost as the overpayment is due back to the granting agency. Additionally, the expenditures reported on the FFR/SF-425 for fiscal 2024 were misstated by $23,058. This is deemed to be a material weakness in internal control over compliance.
Cause: Review and approval controls of the monthly reimbursement request and the annual FFR/SF-425 report were not operating effectively.
Identification as a Repeat Finding: Not a repeat finding
Recommendation: The Organization should ensure monthly requests for reimbursement and reviewed and approved prior to submission. Additionally, the annual FFR/SF-425 should be reviewed and reconciled to the monthly draws.
Views of Responsible Officials: Management of the Organization concurs with the finding. See Corrective Action Plan.