Finding Text
Department of Health and Human Services
Federal Financial Assistance Listing #93.498
COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution (PRF)
Applicable Federal Award Number and Year – Period 6 TIN #205330283
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Material Weakness in Internal Control over Compliance
Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Care Center claimed expenses based on specifically identified COVID related expenses.
Condition: During our testing, we noted there was no formal review or approval of the expenditure spreadsheet used to calculate the expenditures claimed for the federal program outside of the preparer. In addition, we noted the individual transactions were also not reviewed or approved by someone outside of the business office manager.
Cause: The Care Center did not have adequate internal controls to ensure review and approval over the expenditure spreadsheet or individual transactions was completed and retained.
Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner.
Questioned Costs: None reported.
Context: Detail testing was performed over eligible expenditures which included a population of 162 expenditures which totaled $211,843. A sample of 33 of the 162 expenditures was tested and the total of the items tested was $35,345.
Repeat Finding from Prior Years: No
Recommendation: We recommend management enhance internal controls to ensure that formal documentation of reviews is present for all supporting documentation.
View of Responsible Officials: Management agrees with the finding.