Finding Text
Federal agency: U.S. Department of Health and Human Services
Federal program title: Rural Communities Opioid Response Program – Medication Assisted Treatment (MAT) Expansion and COVID-19 Rural Health Clinic Vaccine Confidence
Assistance Listing Number: 93.912
Award Period: September 1, 2019 through August 31, 2022
Type of Finding:
• Material Weakness in Internal Control over Compliance
Criteria or specific requirement: 2 CFR 200.303(a) states that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. The Health System did not have documented formal controls and procedures over compliance with federal awards.
Condition: The Health System did not have documented formal review processes over the use of the federal awards or required reporting for the federal awards. Eligible uses of federal awards were tracked in detail, and required reporting under the federal award was completed, but there was not a formal review or approval process in place.
Questioned costs: None
Context: The Health System maintained detailed records of eligible uses of federal funds for tracking and required reporting purposes. The Health System's CFO maintained this schedule as eligible uses of funds were identified throughout the organization, reviewed activity, and reconciled the schedule to the general ledger. There was not, however, documentation of a formal review or approval, outside of the schedule being maintained and reconciled. Similarly, the Health System CFO completed the required reporting under the federal award based on the schedule discussed above and other supporting documentation, but there was no formal review or approval process for that report. The Health System does have in place review processes and controls over all expenditures (AP, Payroll), they are just not designed specifically to consider compliance with federal programs.
Cause: The Health System has not previously received federal awards in an amount sufficient to require an audit under Uniform Guidance. Therefore more formal controls and procedures around the use of federal awards had not been in place.
Effect: Without formal control and review processes in place over use of federal funds or required reporting under those awards, there is a greater risk of improper use of funds or misstatement in required reporting.
Repeat finding: Yes – 2021-003
Recommendation: We recommend that management implement more formal control process surrounding the use of federal awards where there is segregation between individuals identifying or proposing expenditures/uses of funds and an individual reviewing and approving that expenditure/use. We also recommend for any formal reporting required under federal awards that there be a formal review process where an individual is reviewing and approving the report who did not prepare the report. Documentation of review and approval should be retained in both cases.
Views of responsible officials: There is no disagreement with the audit finding.