Finding 575419 (2024-003)

Finding: The Uniform Guidance, 2 CFR Part 200, Appendix XI Compliance Supplement dated May 2024, stipulates for a cost to be allowable under federal awards certain general criteria must be met, including costs that are adequately documented and necessary and reasonable for the performance of the federal award. The Alabama Department of Public Health (ADPH) passed through a portion of the Immunization Cooperative Agreement federal award to subrecipients. A total of fourteen subrecipients requested and received reimbursement of program expenses during the fiscal year. Based upon procedures performed, we noted that of the fourteen subrecipients who received federal award reimbursement, three did not provide adequate detailed documentation to support their request for reimbursements. In addition, sixteen of the fifty-four invoices submitted for reimbursement by the subrecipients did not have adequate documentation, resulting in question costs of $5,072,637.00. The documentation which was submitted by the subrecipients and approved by ADPH for payment consisted only of summary information and did not contain detailed information to ensure that reimbursement request costs were necessary and reasonable for the performance of the federal award. The ADPH did not have adequate policies and procedures in place to ensure that all requests for reimbursement were supported by adequate detailed documentation to ensure all costs are allowed under the federal award. Recommendation: The Alabama Department of Public Health should take action to ensure that all reimbursements of expenses are adequately documented, based on true and accurate invoices, and to ensure costs are allowable under the federal award. Views of Responsible Officials of the Auditee: We agree with the Examiners' finding; adequate documentation did not exist at the time of the audit to substantiate payments that resulted in questioned costs and improper payments. To confirm the total amount of questioned costs, ADPH’s Office of Program Integrity initiated its own ongoing investigation. ADPH also requested the Examiners of Public Accounts to conduct a special program audit which is ongoing. As this process continues, ADPH is requesting additional documentation from the subrecipients, which may affect the questioned costs of this program.