Finding 586553 (2021-005)

Material Weakness
Requirement
ABL
Questioned Costs
$1
Year
2021
Accepted
2024-01-25

AI Summary

  • Core Issue: The Organization claimed expenses reimbursed by other sources, leading to inaccuracies in the HHS Special Report.
  • Impacted Requirements: Failure to maintain effective internal controls as required by 2 CFR 200.303(a) resulted in material noncompliance.
  • Recommended Follow-Up: Enhance internal control policies to ensure accurate documentation of expenses and thorough review of reports before submission.

Finding Text

2021-005 Department of Health and Human Services CFDA #93.498 COVID-19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year – Period 1 TIN #381649577 Activities Allowed or Unallowed, Allowable Costs/Cost Principles, and Reporting Material Weakness in Internal Control Over Compliance and Material Noncompliance Criteria: 2 CFR 200.303(a) establishes 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. Condition: The Organization claimed expenses that were reimbursed by other funding sources. These expenses were improperly included in the HHS Special Report which caused the report to be inaccurate. Cause: The Organization submitted expenses that were to be reimbursed by other funding sources (i.e., Medicare). The Organization did not have an adequate internal control policy in place to ensure review and approval of cash disbursements claimed under the federal programs were documented and to ensure that expenses claimed in the Special Report were complete and accurate. Effect: The lack of adequate policies governing expenses and preparation and submission of the Report increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. The Organization submitted expenses over their actual allowable expenses. Questioned Costs: $186,061 which was reimbursed from other sources and an additional $35,521 that was unsupported. Context: A nonstatistical sample of 65 expenditures was selected for testing, which accounted for $92,432 of $1,198,401 of direct program expenditures. Repeat Finding from Prior Years: No Recommendation: We recommend that the Organization enhance internal control policies to ensure all amounts reimbursed by other funding sources are adequately documented and reduced from the eligible expenditure listing and are properly recorded in the Special Report required to be submitted to the federal agency. We also recommend the Organization enhance internal control policies to ensure that the required Reports are properly reviewed prior to submission to ensure all key line items are necessary, correct, meet the requirements of the federal program, and are properly recorded in the Special Reports required to be submitted to the federal agency. Views of Responsible Officials: Management agrees with the finding.

Categories

Questioned Costs Allowable Costs / Cost Principles Material Weakness Reporting

Other Findings in this Audit

  • 10109 2021-003
    Material Weakness
  • 10110 2021-004
    Material Weakness
  • 10111 2021-005
    Material Weakness
  • 586551 2021-003
    Material Weakness
  • 586552 2021-004
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.498 Covid-19 Provider Relief Fund $4.41M
93.697 Covid-19 Testing for Rural Health Clinics $433,942
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $77,349
93.301 Small Rural Hospital Improvement Grant Program $67,500
93.889 National Bioterrorism Hospital Preparedness Program $7,000