Finding Text
Section III ? Federal Award Findings and Questioned Costs Finding Reference: 2022-001 ? Activities Allowed or Unallowed, Allowable Costs/Cost Principles and Reporting Federal Program Information Federal Agencies: Department of Health and Human Services Awards: Assistance Listing Number 93.498 COVID 19 ? Provider Relief Fund (PRF) Award Periods: Period 2 ? January 1, 2020 to December 31, 2021 Description: Internal control deficiency over review of expenditures Type of Finding: Material Weakness in Internal Control Over Compliance Criteria or specific requirement (including statutory, regulatory or other citation) In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, ?Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award.? These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or the ?Internal Control Integrated Framework?, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition The Corporation did not retain audit evidence of its internal controls over its review and approval of supporting documentation of the expenditures related to the report submission. Cause Management designed a process to accumulate and review expenditures; however, they did not retain supporting documentation to evidence that the internal review controls were appropriately designed and functioning throughout the process. Section III ? Federal Award Findings and Questioned Costs Effect or potential effect The Period 1 report submission included an error in reporting personnel and facilities expenditures. Management identified that the expenditures were overstated by $25,192 due to duplicating fringe benefits within the General and Administrative Expenses. The Corporation attempted to correct the overstatement of fringe benefits by restating and unintentionally duplicating expenditures in the amount of $206,002 within the Period 2 submission. Questioned costs $206,002 Identification of a repeat finding This is a repeat finding and relates to prior year finding 2021-001. Context All expenditures were approved by the payroll and finance department. The Corporation developed protocols of which efforts and expenses should be accumulated related to COVID 19 and communicated these protocols throughout the Corporation to ensure costs were being appropriately compiled. Management developed a spreadsheet to accumulate the expenditures for reporting. However, management did not maintain evidence supporting the review and approval of expenses under the grant and subsequently identified errors in the Period 1 submission. These errors were identified prior to the Period 2 submission in which the Corporation attempted to correct by restating and unintentionally duplicating the expenditures. The overstatement of expenditures had no impact on meeting the requirement to retain the funding received. Recommendation We recommend that management develop and implement effective internal controls to ensure expenditures are reviewed and approved to ensure that the report submissions are accurate. View of responsible officials There is no disagreement with the audit finding.