Finding Text
2022-003 Review and Approval of Grant Expenditures (Significant Deficiency) Federal Agency: Department of Health and Human Services Program Name: Unaccompanied Alien Children Program Assistance Listing Number: 93.676 Award period: Year ended December 31, 2022 Compliance Requirement: Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Period of Performance Condition: We have determined that there was an inadequate design of internal control over the approval of grant expenditures during the fiscal year ended December 31, 2022. Criteria: An effective internal control system exists if controls are effective in preventing or detecting material misstatements and potential fraudulent activities in the cash disbursement and payroll process. It provides reasonable assurance for the safeguarding of assets, the reliability of financial information and compliance with laws and regulations. Cause: The Organization?s policies and procedures were not designed to ensure that all grant expenditures obtain proper approval and that evidence of that approval is maintained. Questioned costs: None identified. Perspective Information: Our expense testing revealed that of 16 nonpayroll samples selected for testing, there were 3 instances in which there was lack of evidence of review by the Executive Director. Effect: The Organization's lack of proper internal controls over approval of grant expenditures increases the risk of material misstatements and potential fraudulent activities. Repeat Finding: Yes. Prior year reference number - 2021-003. Recommendation: We recommend that the Organization implement controls and processes that ensure grant expenditures charged to the program are reviewed to ensure costs are allowable and properly supported. Views of Responsible Officials and Planned Corrective Actions: Management acknowledges there is a control weakness as discussed above and will work to implement additional controls and reviews as recommended.