Finding Text
Finding 2022-001 Management?s review of allowable costs Federal Programs: COVID-19 Coronavirus State and Local Fiscal Recovery Funds CFDA No.: 21.027 Federal Agency: U.S. Department of the Treasury Federal Award Years: CFDA 21.027 ? March 3, 2022 ? December 31, 2024 Criteria 45 CFR section 75.303 (a) states the non-federal entity must: Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government,? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework,? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 45 CFR section 75.303 (b) states the non-federal entity must: Comply with Federal statutes, regulations, and the terms and conditions of the Federal awards. Recipients of coronavirus state and local fiscal recovery funds must support all expenses with adequate documentation and maintain proper control documentation to substantiate that these funds were used for health care-related expenses. Condition Management reviews quarterly expenditure reports to ensure compliance with the laws and regulations of the federal program, specifically the allowability of the related expenditures. There was no evidence of review of the expenditure reports. Cause and Effect ROH?s controls were not designed or implemented effectively to maintain evidence of management?s review, and the issue stems from the fact the review took place verbally. This level of review results in the inability to show evidence that the review has taken place. By ROH not providing evidence of the review of the expenditure reports, the appropriate review procedures may be insufficient in evaluating ROH?s compliance with the laws and regulations of the federal program. Questioned Cost None. Statistically Valid Sample The sample was not intended to be, and was not, a statistically valid sample. Identification of whether the audit finding is a repeat of a finding in the immediately prior audit. This is not a repeat finding. Recommendation We recommend that management implement appropriate controls and processes to ensure that once all costs incurred by the grant are properly reviewed for allowability that the evidence of review is maintained. Management?s Response ROH will implement controls and processes to ensure all costs are manually reviewed and approved to ensure allowability under the grant and that evidence of review is maintained.