Finding Text
2023-001: Lack of Internal Control Review for Allowable Costs
Compliance Requirement: Activities Allowed/Unallowed & Allowable Costs
Questioned Costs: None
Type of Finding: Material Weakness in Internal Control over Compliance of Major Programs
•Criteria: Caritas Family Solutions is responsible for implementing and maintaining a proper internal
control system over allowable costs and activities allowed under the major program.
•Condition: Lack of documentation of an internal control indicating formal review of timesheets of each
individual funded under the grant. During the audit, it was observed that for three individuals, the
timesheets for a selected payroll period lacked the necessary approval from the Host Site supervisor.
•Cause: The Organization did not consistently implement a control to review the allowable costs and
activities allowed allocated to the grant. The absence of Host Site supervisor approval on these
timesheets may be attributed to oversight, miscommunication, or a lack of established procedures for
timely approvals.
•Effect: Failing to obtain Host Site supervisor approvals on timesheets raises concerns about the
accuracy of reported hours worked and compliance with the major program requirements. This could
result in the misallocation or misuse of grant funds.
•Recommendation: The Organization should establish and communicate clear procedures for the timely
approval of timesheets by Host Site supervisors and ensure that these procedures are consistentlyfollowed.
•Responsible Party: Gary Huelsmann, Chief Executive Officer
Management Response and Corrective Action Plan: This deficiency was also discovered during our
internal investigation, and Caritas Family Solutions has implemented a new process to ensure that
internal controls are in place.
Program participants will only be paid for verified hours of service. An annual meeting (either oneon-
one or in a group) will be held with site supervisors to discuss processes and procedures and
program expectations. During this meeting, supervisors will be shown how to complete the
timesheet and given details on how to submit them for processing.
Individual and group meetings will be held with program participants to explain the process to
them and remind them that payments will not be made until timesheets are accurate and complete.
Timesheets are due on Friday prior to pay dates.
The ES will review submitted timesheets for accuracy and completeness and will forward them to
the PM for review and final approval before they are submitted to Payroll for processing.
The PM will review the form, sign, and date it after confirming that all information is accurate and
complete.
If there are inaccuracies and/or missing information, the form will be returned to the ES who will
follow up with the host site to obtain the missing information or correct the inaccuracy.
Steps 1 and 2 will be repeated.
The QI department will conduct quarterly file reviews to determine if processes are being followed.
•Anticipated Completion Date: Implemented in September 2023, but the process will be ongoing while
the program is funded.