Finding 635887 (2022-004)

Material Weakness
Requirement
ABCH
Questioned Costs
-
Year
2022
Accepted
2023-09-27
Audit: 56457
Organization: Washburn Center for Children (MN)
Auditor: Eide Bailly LLP

AI Summary

  • Core Issue: Lack of formal documentation for reviews of wage rates, indirect costs, and reimbursement requests, leading to potential compliance risks.
  • Impacted Requirements: Internal controls must be documented as per CFR 200.303(a) to ensure compliance with federal award regulations.
  • Recommended Follow-Up: Review and reinforce procedures with staff to ensure proper documentation and compliance with program requirements.

Finding Text

Department of Health and Human Services Federal Financial Assistance Listing 93.958, All Awards Block Grants for Community Mental Health Services Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Cash Management, and Period of Performance Material Weakness in Internal Control over Compliance Criteria: 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 the terms and conditions of the federal award. Condition: There was no formal documentation of review of wage rates for eight employees selected for testing. There was no formal documented review for the calculation of indirect costs submitted for reimbursement for four months selected for testing. There was no formal documented review for seven reimbursement requests selected for testing. Cause: Washburn Center has designed internal controls over these areas; however, the controls were not formally documented. Effect: Failure to perform an independent review of reporting could result in a reasonable possibility that Washburn Center would not detect errors in the normal course of performing duties and correct them in a timely manner. Questioned Costs: None reported. Context: Nine employees out of 28 total were selected for testing for the program which made up $199,840 in payroll costs out of $736,089 total payroll costs. Four calculations of indirect costs out of 12 monthly calculations were selected for testing for the program which made up $53,741 indirect costs out of $89,416 total indirect costs. Seven requests for reimbursement submissions out of 22 total submissions were selected for testing for the program. Repeat Finding from Prior Years: No Recommendation: We recommend the procedures related to activities allowed or unallowed, allowable costs/cost principles, cash management, and period of performance be reviewed with applicable program employees to ensure the control process is properly followed and documentation is retained to support compliance with program requirements. Views of Responsible Officials: Management agrees with the finding.

Categories

Allowable Costs / Cost Principles Cash Management Material Weakness Period of Performance Reporting

Other Findings in this Audit

  • 59445 2022-004
    Material Weakness
  • 59446 2022-005
    Material Weakness
  • 635888 2022-005
    Material Weakness

Programs in Audit

ALN Program Name Expenditures
93.958 Block Grants for Community Mental Health Services $1.61M
21.027 Coronavirus State and Local Fiscal Recovery Funds $192,533