Finding Text
Finding 2024-005 Inadequate System of Internal Controls over Benefit Limitation
Type of Finding:
Significant Deficiency in Internal Control over Compliance
Condition:
The Organization is required by the federal grant award to limit eligible client families to a maximum of eleven diapering supply "package" distributions per participating child over the course of the grant agreement period. While the program design includes efforts to control this requirement, the eligibility database lacks the capability to assign or track unique participant identifiers needed to reliably enforce this limit. Additionally, there is no documentation to demonstrate that processes related to benefit limits are periodically reviewed or monitored. Due to the nature of recordkeeping in this area, testing compliance is challenging. Although no instances of noncompliance were identified in the sample tested, the Organization has not implemented an adequate system of internal controls to ensure consistent compliance with this grant criterion.
Criteria:
According to the federal grant award, eligible client families will receive a maximum of eleven diapering supply "package" distributions for each participating child, over the course of the grant agreement period. The Organization is required to implement a system of internal controls to ensure compliance with this criteria.
Cause:
This condition results from limitations within the eligibility database system, which lacks both unique participant tracking and comprehensive reporting capabilities necessary to enforce the distribution limit. Combined with the absence of formal review or monitoring procedures, these factors indicate that despite efforts to comply, the Organization has not developed or documented a sufficient internal control system to provide reasonable assurance that this federal requirement is consistently met.
Possible of Known Effect:
The absence of robust internal controls and reporting functionality increases the risk that families may receive benefits exceeding the maximum allowable amount during the grant period. While no noncompliance was identified during testing, these deficiencies hinder the Organization’s ability to prevent or detect potential violations, which could result in questioned costs.
Questioned Costs:
There were no questioned costs identified.
Repeat Finding:
This is not a repeat finding.
Recommendation:
We recommend that the Organization improve its internal control framework by implementing methods to assign unique participant identifiers and accurately track diapering supply distributions within the eligibility system. Enhancing reporting capabilities to allow consolidation of activities across all sites and the full grant period would significantly strengthen monitoring and compliance efforts. Additionally, formalizing periodic reviews and documentation of compliance with the benefit limit, along with staff training, will help ensure adherence to federal grant requirements and reduce compliance risks.
Views of Responsible Officials:
The Organization will transition to Pantry Soft a new CRM to track benefit limitation and mandatory documentation. We will include mandatory eligibility fields and document upload requirements before service can be recorded. We will develop a standardized eligibility checklist to be completed for all new and returning participants. Staff will be trained on Pantry Soft usage, eligibility requirements and document retention stands.