Finding 605542 (2022-002)

Material Weakness Repeat Finding
Requirement
AB
Questioned Costs
-
Year
2022
Accepted
2023-06-29
Audit: 24566
Organization: Eventide (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: There is a material weakness in internal controls over compliance, specifically regarding the lack of formal documentation for expenditure reviews and tracking of funding sources.
  • Impacted Requirements: The organization failed to meet 2 CFR 200.303(a), which requires effective internal controls to ensure compliance with federal award management.
  • Recommended Follow-Up: Enhance internal control policies to ensure formal documentation of review and approval processes is established and maintained.

Finding Text

2022-002 Department of Health and Human Services Federal Assistance Listing/CFDA #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution Applicable Federal Award Number and Year ? Period 2 TIN #463364672, Period 2 TIN #272608086, Period 2 TIN #410721640, Period 2 and Period 3 TIN #450275011, Period 2 and Period 3 TIN #204531061 Activities Allowed or Unallowed and Allowable Costs/Costs Principles Material Weakness in Internal Control Over Compliance 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: There was no formal documentation of review and approval for the final expenditure listing. There was also no formal review over tracking of other sources of funding to ensure that expenses claimed for the program were not claimed by other funding sources. The Organization?s calculation of lost revenue claimed under the federal program as an allowable cost contained no formal review or approval by a separate individual outside of the preparer. Cause: The Organization did not have an adequate internal control policy in place to ensure review and approval of direct COVID expenses, tracking of other funding sources, or calculation of lost revenue was documented. Effect: The lack of adequate policies governing review and approval increases the risk that employees participating in the federal award administration may not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context/Sampling: Detail testing was performed over payroll and expenses for activities allowed and unallowable and allowable cost/cost principles. In addition, the lost revenue calculation for all applicable quarters was tested. Repeat Finding from Prior Years: Yes Recommendation: We recommend that the Organization enhance internal control policies to ensure that formal documentation of review and approval is present. Views of Responsible Officials: Management agrees with the finding

Categories

Allowable Costs / Cost Principles

Other Findings in this Audit

  • 29100 2022-002
    Material Weakness Repeat
  • 29101 2022-003
    Material Weakness
  • 29102 2022-001
    Material Weakness Repeat
  • 605543 2022-003
    Material Weakness
  • 605544 2022-001
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
10.766 Community Facilities Loans and Grants $5.96M
93.498 Provider Relief Fund $2.62M
14.157 Supportive Housing for the Elderly $149,042