Finding Text
#2021-006 – Material Weakness – Reporting – Schedule of Expenditures of Federal Awards
Opioid STR Grant ALN 93.788
Block Grants for Prevention and Treatment of Substance Abuse 93.959
Criteria
The Office of Management and Budget issuance of the Code of Federal Regulations (CFR) specifically states uniform administrative requirements, cost principles, and audit requirements for federal awards.
In accordance with 45 CFR 75.302(b) “The financial management system of each non-Federal entity must provide for the following:
(1) Identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received. Federal program and Federal award identification must include, as applicable, the ALN title and number, Federal award identification number and year, name of the HHS awarding agency, and name of the pass-through entity, if any.
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(3) Records that identify adequately the source and application of funds for federally-funded activities. These records must contain information pertaining to Federal awards, authorizations, obligations, unobligated balances, assets, expenditures, income and interest and be supported by source documentation.”
Condition
The Organization designated an individual responsible to oversee Hamilton and Musser, PC’s preparation of the SEFA. The Organization has assumed responsibility for evaluating the completeness and accuracy of the SEFA.
The expenses reported on the Schedule of Expenditure of Federal Awards (SEFA) are not properly supported by the Organization’s accounting records and supporting source documentation. The SEFA includes $200,951 of unsupported expenditures under the major program #93.788 Opioid STR Grant.
Additionally, the SEFA does not necessarily include all Federal awards and expenditures of the Organization for the year ended December 31, 2021.
Cause
The Organization’s designee does not have the experience to prepare the SEFA. In addition, the Organization was unable to provide supporting documentation for all grants received for the year ended December 31, 2021.
Effect
The effect of not maintaining proper documentation and providing a complete and accurate SEFA is the potential for under-reported amounts to the granting agencies.
Questioned Costs
Unknown
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Perspective Information
Summaries of the expenditures reported on the reports filed with the granting agencies were compared to total expenses recorded in the Organizations accounting records and to the grant agreements.
Identification as a repeat finding
A similar issue was noted in prior year finding #2020-006.
Recommendation
We recommend that the Organization begin to track revenues and expenses in the accounting system by source. The Organization should also develop a record keeping system to properly maintain grant documentation (agreements, receipts, invoices, etc.). This will provide more accurate data for the preparation and reconciliation of the SEFA.
View of responsible officials and planned corrective action
To better prepare for the SEFA JFT has started organizing and tracking revenues and expenses in the accounting system by source. As stated earlier there have been checks and balances put into place through existing and new policies. This has been done with the above listed assigning and hiring of extra staff for the fiscal department, Quick Books, hiring of the accountants from The Gift, A new filing system, a receipt machine and the new policies that will be in the newly created fiscal manual that is being worked on currently and shall be completed by July 1, 2023.