Finding Text
Assistance Listing Number: 93.958
Name of Federal Program: Block Grants for Community Mental Health Services
Name of Federal Agency: Department of Health and Human Services
Name of Pass-through Entities and Award Periods: Wisconsin Department of Health Services – October 1, 2021 through September 30, 2022, April 1, 2022 through September 30, 2022, October 1, 2022 through September 30, 2023, Milwaukee County Behavioral Health Division – January 1, 2022 through December 31, 2022, and Milwaukee County Department of Health Services – January 1, 2022 through December 31, 2022
Criteria or Specific Requirement: Non-federal entities must establish policies and procedures to implement the requirements of 2 CFR section 200.305. Program costs must be incurred by non-federal entity before submitting a reimbursement request.
Condition: During our testing of reimbursement requests, we identified amounts that were requested for reimbursement prior to the expenses being incurred.
Cause: Sufficient internal controls for reimbursement requests have not been implemented to ensure costs have been incurred prior to requests for reimbursement.
Effect or Potential Effect: Noncompliance with cash management requirements occurred within the federal program and costs incurred could be disallowed.
Context and Questioned Costs: A sample of 6 reimbursement requests totaling $135,397 was selected for testing from a population of 10 reimbursement requests totaling $347,508. The testing found 1 reimbursement request totaling $32,073 that included $21,180 of expenses that had not been incurred as of the date of the reimbursement request.
Repeat Finding: No
Recommendation: Additional internal controls for reimbursement requests should be implemented, including having another individual outside the process review and approve reimbursement requests prior to submission or require detailed accounting expense transactions be included with reimbursement requests to ensure expenses have been incurred prior to reimbursement.
Views of Responsible Officials: Management agrees with the finding and the Organization and outsourced accounting rep will meet monthly to review cost reports and correlating invoices together before approving and submitting to the funder to ensure no invoices are submitted in advance of incurring expenses.