Finding Text
2024-001 – Fiscal Policies and Procedures Not Fully Aligned with Uniform Guidance
Federal Program: Temporary Assistance for Needy Families, Family Violence Prevention Services Act,
ARP Supplemental and ARP Covid-19
Federal Assistance Listing Number: 93.558 and 93.671
Pass-Through Agency: Texas Health and Human Services Commission
Pass-Through Grantor Number: HHS000380000040
Criteria:
Non-federal entities are required under 2 CFR §200.303 to establish and maintain effective internal controls
over federal awards that provide reasonable assurance of compliance with federal statutes, regulations, and
terms and conditions of the award. Adequate written policies and procedures are a critical component of an
effective internal control system.
Condition:
During our review of the Center’s fiscal policies and procedures, we noted that several key elements
required for compliance with 2 CFR Part 200 were either missing or lacked sufficient detail. Specifically,
the following areas were underdeveloped:
Conflict of interest policies were not clearly defined or aligned with 2 CFR § 200.112.
Procedures for determining allowable costs under 2 CFR §200.403–§200.405 were not well
documented.
Subrecipient monitoring procedures required by 2 CFR §200.331 were not adequately addressed.
Record retention and access policies under 2 CFR §200.333–§200.338 were not clearly outlined.
While some general policies were in place, they do not currently meet the level of specificity and
comprehensiveness required under the Uniform Guidance.
Cause:
The Center is in the process of updating its financial policies and procedures to comply with Uniform
Guidance requirements. A consultant has been engaged to assist with this process, and updates are expected
to be finalized and approved by the Board of Directors in August 2025.
Effect:
The lack of complete and detailed policies increases the risk of noncompliance with federal requirements,
especially in areas such as cost allowability, subrecipient oversight, and recordkeeping. It also creates
challenges in ensuring consistent and compliant financial practices across the Center.
Questioned Costs:
$0 – No noncompliant expenditures were identified; however, the absence of sufficient policies represents
a control deficiency.
Recommendation:
We recommend for the Center to prioritize the completion and formal adoption of revised fiscal policies
and procedures, ensuring they fully align with the requirements of 2 CFR Part 200. These should include
detailed written policies on conflict of interest, allowable costs, subrecipient monitoring, and record
retention. Finalizing and implementing these policies ahead of the new fiscal year, as planned, will
strengthen internal controls and help ensure compliance moving forward.
Management’s Views and Corrective Action Plan:
Management agrees with the finding. The Center is currently in the process of updating its fiscal policies
and procedures to align with the requirements of 2 CFR Part 200. The Finance Committee is leading this
effort and is reviewing each policy area identified, including conflict of interest, allowable costs,
subrecipient monitoring, and record retention.
Updated policies and procedures will be finalized and presented for Board approval by August 30, 2025.
Once approved, the Center will ensure implementation across all departments and provide internal guidance
to promote consistent application.
Anticipated Completion Date: August 30, 2025
Responsible Party: Finance Committee, with support from Executive Director, Nichole Henry.