Finding Text
Program Information:
See the audit finding for chart/table
Criteria or specific requirement:
Indian Health Services, 42 CFR 136.61, requires the Department to bill third-party insurance for services provided and use the income for health care or health care related activities.
Condition/Context:
The Department was unable to provide support for program income to ensure they were spending third-party funds on allowable costs for the following:
• 2 of 10 IIIs and 2 of 12 nonpayroll samples did not have all management approvals.
• 2 of 10 IIIs were not coded to the proper fund on the purchase requisition.
• 1 of 12 nonpayroll samples did not have a PO provided to verify management approval and fund coding.
• 16 of 48 payroll samples did use the approved payrate.
• 3 of 12 nonpayroll samples did not have adequate support.
[X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness
Cause:
Lack of sufficient oversight and internal controls over this requirement may have contributed to this finding.
Effect:
We were unable to determine whether program income is being used for allowable activities. Additionally, lack of sufficient documentation may cause the funding agency to question costs.
Questioned Costs: N/A, the known plus likely questioned costs did not exceed $25,000, therefore no questioned costs are reported.
Repeat Finding:
Yes – 2020-011.
Recommendation:
We recommend the Department continue to strengthen and reinforce its internal control policies and procedures and to ensure that monthly accounting reconciliations are performed and reviewed timely to produce accurate financial data related to third-party income and related expenses.
Views of Responsible Officials and Planned Corrective Action:
Management agrees with the finding and has prepared corrective action as detailed in its Corrective Action Plan.