Finding 598845 (2022-002)

Material Weakness
Requirement
P
Questioned Costs
-
Year
2022
Accepted
2023-03-06
Audit: 20284
Organization: Valleylife and Related Entities (AZ)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: The Organization lacks effective internal controls to verify employee qualifications for incentive pay.
  • Impacted Requirements: This violates 2 CFR 200.303(a), which mandates proper management of federal awards.
  • Recommended Follow-Up: Implement a secondary review process for final expenditure listings to ensure compliance and accuracy.

Finding Text

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 Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award. Condition: The Organization did not have proper review procedures in place to determine employees? qualifications for individual incentive pay that was allocated to the program. Cause: The Organization has limited staffing and did not have proper controls in place relating to review of incentive pay per individual. Effect: There is a reasonable possibility that the Organization could submit inaccurate information. Questioned Costs: None reported. Context: A nonstatistical sample of 60 transactions were selected for testing or $31,103 out of $780,498 of eligible expenditures. Repeat Finding from Prior Years: No Recommendation: We recommend the Organization implement a control process which includes a secondary review and approval of the summarized final expenditure listing used to claim the allowable costs under the federal program. Views of Responsible Officials: Management agrees with the finding.

Categories

Allowable Costs / Cost Principles Internal Control / Segregation of Duties

Other Findings in this Audit

  • 22402 2022-001
    Significant Deficiency
  • 22403 2022-002
    Material Weakness
  • 598844 2022-001
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.498 Provider Relief Fund $780,498
21.027 Coronavirus State and Local Fiscal Recovery Funds $200,000
14.218 Community Development Block Grants/entitlement Grants $9,581