Finding 9185 (2023-001)

Finding No: 2023-001 Activities Allowed or Unallowed/Allowable Costs Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.498 Program: COVID -19 Provider Relief Fund and American Rescue Plan (ARP) Rural Distribution Award Year: January 1, 2020 through December 31, 2022 (a) Criteria or Requirement The specific requirements for activities allowed or unallowed are unique to each federal program and are found in the federal statutes, regulations, and the terms and conditions of the federal award pertaining to the program. This program allows expenditures to prevent, prepare for, and respond to coronavirus and COVID-19, domestically or internationally, for necessary expenses to reimburse, through grants or other mechanisms, eligible health care providers for health care related expenses or lost revenues that are attributable to coronavirus. Per 2 CFR 200.303, a non-Federal entity must 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. (b) Condition Found, Including Perspective During our test work, we selected a sample of 60 non-payroll disbursements made during the fiscal year 2023 reporting period. We noted eight instances totaling $1,717 in which expenditures were approved for payment based on vendor invoices which included inaccurate calculations. In addition, we noted three instances of duplicate expenditures totaling $38,971 being transferred and charged to the program. Lastly, the University was unable to provide supporting documentation and evidence of the effective operation of the management review control for one of the 60 disbursements sampled totaling $803. (c) Possible Cause The University has a management review process to review invoices and related documentation before payments are disbursed. The University management review control that was in place did not operate effectively to prevent duplicate charges, inaccurate amounts and charges that lacked supporting documentation from being submitted for reimbursement by the federal agency. (d) Questioned Cost Duplicate expenditures totaling $38,971 and payment of inaccurate vendor invoices totaling $1,717. (e) Effect Federal funds were expended for duplicated or inaccurate amounts and supporting documentation and evidence of the effective operation of management review controls were not consistently maintained in accordance with Federal requirements. (f) Statistical Validity The sample was not intended to be, and was not, a statistically valid sample. (g) Repeat Finding in the Prior Year This finding also occurred in the prior year listed as Finding No. 2022-001. (h) Recommendation We recommend that the University strengthen controls over the management review process to prevent duplicate and inaccurate amounts from being charged to Federal programs and to enhance the retention of supporting documentation and evidence of management review and approval. (i) View of Responsible Officials Management concurs with the finding. While appropriate controls exist relative to management review and recalculation of expenditures, opportunities exist to retrain staff and further enhance controls related to procedures for submission, review, and approval of contract labor invoices. Specific instructions to recalculate each contract employees’ timesheet(s) and agree the totals to the related invoice prior to approval were distributed and outlined for department managers, accountants, and accounts payable staff. In addition, the process for reviewing and approving grant expenditures has since been enhanced subsequent to manager turnover during the fiscal year. Specifically, employees responsible for processing grant transfer documentation will ensure documents contain management approval(s), grants and contracts accounting approval, and appropriate documentation prior to keying and uploading documentation into the general ledger. The new practice will help compensate for employee turnover as documentation of historical review will be available to successors.