Finding Text
FINDING NO. 2022-004: Ineffective Internal Controls over Expenditure Report Preparation
Federal Program Name Health Center Program
Project NO. H80CS00680-21-00, H80CS00680-20-03
CFDA # 93.224
Federal Agency Department of Health and Human Services
Criteria/Specific Requirement:
Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principals, and Audit Requirements for Federal Awards (Uniform Guidance) requires that a non-federal entity’s financial management system, including records documenting compliance with federal statutes, regulations, and the terms and conditions of the federal award, must be sufficient to permit the preparation of the reports required by general and program-specific terms and conditions; and the tracing of funds to a level of expenditures adequate to establish that such funds have been used according to federal statutes, regulations, and the terms and conditions of the federal award.
Health Resources & Services Administration (HRSA) also implements various quarterly and annual reporting deadlines at the grant agency level.
Condition:
The Organization’s internal controls over the preparation and review of grant expenditure reports were not properly followed during the current fiscal year. Certain expenditure reports submitted to HRSA were not timely filed:
• The Medicaid cost report is due to Illinois Healthcare and Family Services (HFS) within 180 days after the close of the Clinic’s fiscal year. The Organization filed this report on September 8, 2022 for year-end June 30, 2021.
• The Medicare cost report is due to Centers for Medicare & Medicaid Services (CMS) on
November 30, 2021 but was not submitted until December 6, 2021.
Questioned Costs:
N/A
Context:
Exceptions were noted in 2 of the 4 reports tested.
Effect:
Untimely or inaccurate expenditure reporting could result in either overstatements or understatements of expenditures to granting agencies. A return of grant funds could be requested from the granting agencies.
Cause:
Lack of oversight by the Organization’s personnel.
Recommendation:
The Organization should create a system of internal controls to ensure all expenditure reports are submitted accurately and timely filed.
Management’s Response:
Management agrees with the finding.