Finding Text
FINDING REFERENCE NUMBER 2023-030 (See Finding Reference Number 2023-002)
FEDERAL PROGRAM (ALN – 93.489; 93.575 AND 93.596) CHILD CARE CLUSTER
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
AWARD NUMBER G2101PRCDC6 (Federal Award Years: 2020 through 2023)
ADMINISTRATION ADMINISTRATION FOR THE CARE AND COMPREHENSIVE DEVELOPMENT OF CHILDREN (ACUDEN, BY ITS SPANISH ACRONYM)
COMPLIANCE REQUIREMENT ACTIVITIES ALLOWED OR UNALLOWED // ALLOWABLE COSTS/COSTS PRINCIPLES
TYPE OF FINDING MATERIAL NONCOMPLIANCE AND MATERIAL WEAKNESS
CRITERIA Uniform Guidance at 2 CFR Section 200.302 (b)(4) establishes that the financial management system of each non-Federal entity must provide effective control over, and accountability for, all funds, property, and other assets. The non-Federal entity must adequately safeguard all assets and assure that they are used solely for authorized purposes. In 2 CFR 200.405 (a)(1) establishes that a cost is allocable to a particular Federal award or other cost objective if the goods or services involved are chargeable or assignable to that Federal award or cost objective in accordance with relative benefits received. This standard is met if the cost: is incurred specifically for the Federal award. In addition, 34 CFR 76.702 establishes that a State and a subgrantee shall use fiscal control and fund accounting procedures that insure proper disbursement of and accounting for Federal funds.
STATEMENT OF CONDITION As part of our audit procedures over internal controls and compliance with the allowable activities’ requirement, we selected a sample of forty-four (44) disbursements to suppliers made during the fiscal year under audit of a total population of 2,534. In one (1) instance, we found that the ACUDEN issued an advance payment to a supplier who in turn subcontracted with other suppliers for professional services or consumer education advertising campaign, media plan, and event coordination not performed, and that they had been invoiced in advance as of the invoice date.
QUESTIONED COSTS $208,823.33.
PERSPECTIVE INFORMATION This deficiency is a systemic problem. When the invoices reach the ACUDEN finance personnel in charge of the payment issuance process, they must review the invoice in all its parts, ensuring that the billed services are received accordingly, identifying the period of service performed. However, a supplier issued an invoice dated March 21, 2023, which included professional services of marketing for a consumer education campaign, media planning, and event coordination for the ACUDEN Child Care Program and PDG-B-5 programs. These services had been invoiced in advance for the period from April 1, 2023 through September 30, 2023 and during the payment process this situation was not detected and the payment for these services invoiced in advance was incorrectly issued on May 2, 2023, according to the disbursement voucher. During our inspection of the disbursement voucher, we noted the voucher had a note from de Finance Director indicating her refusing to authorize the disbursement voucher. However, although the disbursement voucher had this note, the Administrator signed the disbursement voucher and authorized the payment.
STATEMENT OF CAUSE The lack of proper training and controls that requires standard evaluation and approval of expenditures incurred, in accordance with the state and Federal regulation.
POSSIBLE ASSERTED EFFECT ACUDEN incurred in overpayments to suppliers for services not rendered to ACUDEN.
IDENTIFICATION OF
REPEAT FINDING No reported as prior audit finding.
RECOMMENDATIONS We recommend management to establish internal control processes consistent with the requirements of 2 CFR 200. In addition, design and implement internal control processes to meet the requirements of subrecipient monitoring and procurement standards.