Finding 611121 (2022-005)

FINDING # 2022-005 OTHER - BASIS OF ACCOUNTING ? MATERIAL DEFICIENCY EPIDEMIOLOGY AND LABORATORY CAPACITY FOR INFECTIOUS DISEASES (ALN 93.323) PASS-THROUGH AGENCY: HEALTH RESEARCH, INC. IDENTIFICATION NUMBER(S): 6831-01 FEDERAL AGENCY: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES COUNTY AGENCY: SUFFFOLK COUNTY HEALTH DEPARTMENT 1. CRITERIA Basis of Accounting ?Uniform Guidance states the basis of accounting used may be a special purpose framework. However, it does state that the determination of when an award is expended must be based on when the activity related to the federal award occurs. Uniform Guidance also states for Grants, cost reimbursement contracts, cooperative agreements, and direct appropriation type of contracts, the federal expenditure or expense should be reported when the transaction occurs. Uniform Guidance further states, the auditee should also be able to reconcile amounts presented in the financial statements to related amounts in the schedule of expenditures of federal awards. 2. CONDITION/PERSPECTIVE The Suffolk County Department of Health Services (the ?Department?) receives Epidemiology and Laboratory Capacity for Infectious Diseases funds from Health Research, Inc. (the ?Agency?). The Department reports to the Agency on an accrual basis, as required by the Agency. The County?s Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting. The Department provides all supporting documents to the Agency for reimbursement. Of the sixty (60) files selected for testing: ? We noted that the Department submitted four (4) allowable invoices in the amount of $549,538, which were incurred and dated in the prior year. The Department recorded the expenditures and revenue in the 2022 financial statements. These invoices were also added to the Schedule of Expenditures of Federal Awards in calendar year ended December 31, 2022. 3. CAUSE The Departments did not ensure that all program expenditures were reported in the correct year in the County?s schedule of expenditures of federal awards. 4. EFFECT The Pass-through agency may consider Suffolk County noncompliance. 5. REPEAT FINDING No 6. RECOMMENDATION We recommend the Department report program expenditures on the Schedule of Expenditures of Federal Awards on the same basis as the County. 7. QUESTIONED COST Cannot be determined. 8. VIEWS OF RESPONSIBLE OFFICIAL During year end processing, the Suffolk County Department of Health Services, when entering vouchers into the financial system, will ensure items to be accrued will contain the letter ?A? as a prefix to the voucher number. The department will also check to ensure all items that should be accrued, are in fact accrued prior to year end closing. In addition, the department will confirm the date entered in the financial system, reflects the proper year in which the expense and associated revenue should be recorded. When preparing the annual Schedule of Expenses of Federal Awards (?SEFA?). The department will reconcile expense reports with the expenses reported on the annual SEFA.