Finding 575326 (2024-002)

Federal Agency: U.S. Department of Health and Human Services Assistance Listing Numbers: 93.623 Federal Program Titles: Basic Center Grant Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Code of Federal Regulations 2 CFR 200.303(a), non-federal entities must establish and maintain effective internal controls over federal awards. Furthermore, 2 CFR 200.403(g) requires that costs be adequately documented in order to be allowable under federal awards. Condition: During our testing of expenditures charged to the major program, we noted multiple instances that did not contain documented evidence of review or approval by a supervisor or program manager. Questioned Costs: None. Context: During our testing of ten expenditures charged to the major program, we noted three instances that did not contain documented evidence of review or approval by a supervisor or program manager. Although management stated that expenditures are reviewed before processing, no signatures, initials, timestamps, or electronic workflow logs were retained to demonstrate the review occurred. Effect: Failure to document review and approval increases the risk that unallowable or erroneous expenditures could be charged to the federal award and go undetected. Although no unallowable costs were identified in our testing, the control deficiency could lead to future noncompliance or questioned costs. Repeat Finding: This is not a repeat finding. Recommendation: We recommend that the Organization enforce policies requiring all expenditures charged to federal programs to be reviewed and approved by an appropriate official, and document the approval through dated signatures, electronic approvals, or maintained audit trails in software utilized by the Organization. Views of Responsible Officials: Management agrees with the finding.