Finding Text
2022-003 Department of Health and Human Services Federal Financial Assistance Listing #93.697 COVID-19 Testing and Mitigation for Rural Health Clinics Activities Allowed or Unallowed and Allowable Costs/Cost Principles and Period of Performance 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 federal awards that provides reasonable assurance that the Facility is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Facility?s expense tracking spreadsheet which identified the expenses claimed under the federal program as allowable costs included three expenses which related to a future period. The Facility also claimed the cost of eleven chairs which had been returned to the third-party vendor during November 2022. A formula error was also identified within the calculation of clinic salaries and fringe benefits claimed under the federal program which was based upon a prorated basis of COVID related clinic visits as a percentage of total clinic visits. The Facility had multiple individuals identifying and compiling eligible expenses; however, the Facility?s review and approval process over the Facility?s expense tracking spreadsheet was not formally documented. Cause: The Facility?s review and approval process over the Facility?s expense tracking spreadsheet did not identify the future period expenses, the cost of the returned chairs, or the formula error. Effect: The Facility?s expense tracking spreadsheet which identified the expenses claimed under the federal program as allowable costs had more expenses identified than funds received; therefore, the expenses relating to a future period and the cost of the eleven chairs had no effect on the amount of federal expenditures included in the schedule of expenditures of federal awards for the year ending December 31, 2022 as excess expenses had been identified by the Facility on their expense tracking spreadsheet. Additional clinic salaries and fringe benefits could have been claimed under the federal program due to the formula error identified. Additionally, it is hard to determine if a review and approval process occurred as no documentation was retained to support the process. Questioned Costs: No questioned costs to report as the Facility?s expense tracking spreadsheet which identified the expenses claimed under the federal program as allowable costs included excess expenses over the amount of funds received. Context: Summary level testing was performed over clinic salaries and fringe benefits claimed under the federal program. In addition, a nonstatistical sample of 24 ($110,187) from a population of 127 nonpayroll items ($142,733) were tested. Repeat Finding from Prior Years: No Recommendation: We recommend the Facility implement a control process which includes an independent review and approval of the expense tracking spreadsheet which identifies the expenses claimed under the federal program as allowable costs and retain documentation of the review process. Views of Responsible Officials: Management agrees with the finding.