Finding Text
Failure to properly track grant expenditures.
Federal programs impacted: 93.958 Block grants for community mental health services, 93.558 TANF DYS
Questioned Costs: None
Condition: The Clinic expended more than $750,000 in federal awards, triggering a single audit requirement, however when asked to prepare a SEFA/SESA multiple attempts were made and numbers changed numerous times throughout the audit. Client is unable to distinguish co-mingled federal and state funding and expenditures for DYS grants, one of the major programs tested. Client is able to maintain overall expenditures, but not on a segregated level. Appears tracking was done in the same manner as other program expenses. Client failed to maintain proper records to segregate federal and state funding as required by the Uniform Guidance.
Criteria: 2 CFR section 200.329 states that one responsibility of the auditee is to monitor its activities under Federal awards. See also 200.332.
Cause: Funding for the TANF DYS grant is received on a state and federal level. DHS is able to segregate in their tracking software but the Clinic belives they did not have the ability to separate these payements as they come from the same source and are often received in tandem, they did not have proper internal controls in place to segregate the funding received and related expenditures as required by the Uniform Guidance.
Effect: Difficulty in establishing the SEFA/SESA, causing a delay in single audit testing. Co-mingling of federal and state funding used could present the possibility that expenses tested in single audit were paid for with the state portion of the grant.
Recommendation: We recommend that the Clinic maintains an effort to track federal and state funding and expenditures separate from regular program expenditures, inquiring of granting agencies if needed by developing and implementing internal control policies related to grant funding and expenditure tracking.
Management Response: Management believes it will be very difficult to segregate the fundings for the reasons listed above, but they mentioned they would request clarification from awarding agencies on which portion is federal and which is state in order to properly track.