Finding 576210 (2024-006)

Significant Deficiency Repeat Finding
Requirement
BCL
Questioned Costs
-
Year
2024
Accepted
2025-09-12

AI Summary

  • Core Issue: Lack of documented review and approval for indirect cost calculations, cash management requests, and reports, leading to potential errors and compliance risks.
  • Impacted Requirements: Violations of internal control standards under Section 200.303 of the Uniform Guidance, specifically regarding segregation of duties and documentation.
  • Recommended Follow-Up: Implement procedures for mandatory review and approval by qualified individuals for all relevant financial documents before submission.

Finding Text

Finding 2024-006: Crime Victim Assistance Documented Review and Approval Procedures Type of Finding: Control U.S. Department of Justice Pass-through Entity: Michigan Department of Health and Human Services Assistance Listing Number: 16.575 Award Numbers: E20243445-00, E20243384-00, E20243038-00 Award Year End: September 30, 2024 Specific Requirements: (B.) Allowable Costs/Cost Principles, (C.) Cash Management, (L.) Reporting Criteria: Section 200.303 of the Cost Principles of the Title 2 U.S. Code of Federal Regulations Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) requires a non-federal entity to establish and maintain effective internal control over the federal award that provides a reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the specified guidance that requires proper segregation of duties by dividing key responsibilities among different people to reduce the risk of error or fraud. This should include separating the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and handling any related assets. No one individual should control all key aspects of a transaction or event. In addition, this guidance also requires transactions and internal controls to be clearly documented, and the records should be properly maintained and readily available for examination. Questioned Costs: None. Condition: During our detailed testing of the areas of indirect costs, cash management, and reporting for the Crime Victim Assistance program, we noted that the indirect cost calculations, requests for funds, and reports were missing documented approval by an appropriate individual with adequate skills, knowledge, and experience. Context: Of the three months selected for testing indirect cost calculations and requests for funds, none of the calculations or requests were reviewed and approved by an appropriate individual. Additionally, of the three monthly activity reports and the two quarterly reports tested, none of the reports were reviewed and approved by an appropriate individual. The sample was not a statistically valid sample, and the matter appears to be a systemic condition. Effect: Failure to properly prepare and review indirect cost calculations and requests for funds could allow funds to be over requested and potentially overstate federal revenue, resulting in excess funds paid to the Organization. Similarly, there could also be missed opportunities for reimbursement. In addition, failure to properly review reports before they are submitted could result in inaccurate information being transmitted, resulting in a compliance finding. Cause: The Organization was unaware of the requirement to have a documented review and approval over the areas of indirect costs, cash management, and reporting. Repeat Finding: A similar finding was reported during the single audit for the year ended September 30, 2023. Recommendation: The Organization should establish procedures to require the documented review and approval of all indirect cost calculations, cash management requests for funds, and reports by an individual with adequate skills, knowledge, and experience prior to submission. Views of Responsible Officials: The Organization agrees with this finding

Corrective Action Plan

Finding 2024-006: Crime Victim Assistance Documented Review and Approval Procedures U.S. Department of Justice Pass-through Entity: Michigan Department of Health and Human Services Assistance Listing Number: 16.575 Award Numbers: E20243445-00, E20243384-00, E20243038-00 Award Year End: September 30, 2024 Recommendation: The Organization should establish procedures to require the documented review and approval of all indirect cost calculations, cash management requests for funds, and reports by an individual with adequate skills, knowledge, and experience prior to submission. Action Taken: The Executive Director is now reviewing the bank reconciliation and monitoring cash. The Organization will establish the necessary policies and procedures to require the documented review and approval of all indirect calculations, cash management requests for funds and performance reports on a monthly basis prior to submission with documented approval. Responsible Person and Anticipated Completion Date: The Executive Director will oversee the implementation of this plan by September 30, 2025.

Categories

Allowable Costs / Cost Principles Cash Management Internal Control / Segregation of Duties Subrecipient Monitoring Reporting Matching / Level of Effort / Earmarking

Other Findings in this Audit

  • 576209 2024-005
    Material Weakness Repeat
  • 576211 2024-007
    Significant Deficiency Repeat
  • 1152651 2024-005
    Material Weakness Repeat
  • 1152652 2024-006
    Significant Deficiency Repeat
  • 1152653 2024-007
    Significant Deficiency Repeat

Programs in Audit

ALN Program Name Expenditures
16.575 Crime Victim Assistance $587,762
93.558 Temporary Assistance for Needy Families $286,977
14.267 Continuum of Care Program $232,587
93.671 Family Violence Prevention and Services/domestic Violence Shelter and Supportive Services $100,733
93.497 Family Violence Prevention and Services/ Sexual Assault/rape Crisis Services and Supports $96,353
97.024 Emergency Food and Shelter National Board Program $17,399