Finding 60332 (2022-002)

Finding 2022-002: Internal control deficiency and noncompliance over amounts reported in the Schedule of Expenditures of Federal Awards (SEFA). Identification of the federal program: Assistance Listing Number 93.732: ? Mental and Behavioral Health Education and Training Grants ? US Department of Health and Human Services ? Federal Award Identification Number: o T2537600 ? Federal Award Year ? July 1, 2020 to June 30, 2025 o MC142086 ? Federal Award Year ? July 1, 2021 to June 30, 2025 Criteria or specific requirement (including statutory, regulatory or other citation): Title 2, Subtitle A Chapter II Part 200 Subpart D Section 200.303 Internal Controls. The non-Federal entity must: (a) 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). Title 2, Subtitle A Chapter II Part 200 Subpart F Section 200.502 Basis for determining Federal awards expended. (a) Determining Federal awards expended. The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs. Condition: During our testing over the SEFA, we observed management did not have effective internal controls in place to ensure accurate reporting of expenditures in the SEFA. This resulted in the incorrect amount reported in the SEFA. Cause: Management did not have effective internal controls in place to ensure accurate reporting of expenditures in the SEFA. Effect or potential effect: The expenditures were incorrectly reported in the SEFA. Questioned costs: None. Context: During our testing over the SEFA, we observed the incorrect balance was reported on the SEFA as management included $235,330 in out-of-period expenditures that related to June 30, 2021, and did not include $306,646 in expenditures that related to June 30, 2022. The expenditures that are required to be on the SEFA should be based on the service period of July 1, 2021 to June 30, 2022. Management?s internal control over the review of the SEFA did not identify this incorrect reporting. The amount reported in the SEFA was subsequently corrected and the corrected amount is reflected in the data collection form. Identification as a repeat finding, if applicable: No. Recommendation: Management should develop and implement internal controls to ensure the completeness and accuracy of the SEFA. Views of responsible officials: These out-of-period expenditures were not captured in the financial records of the related fiscal year. An additional review process of the SEFA will be implemented and performed by management to ensure the SEFA contains complete and accurate reporting of expenditures.