Finding Text
2022-004 – Department of Health and Human Services
CFDA #93.829 Section 223 Demonstration Programs to Improve Community Health
Services (CCBHC)
Activities Allowed or Unallowed, Allowable Costs/Cost Principles, Period of
Performance, and Reporting
Material Weakness in Internal Control over Compliance
Criteria – 2 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 conditions of the federal award.
Condition – Rimrock Foundation’s final expenditures identified as eligible and claimed under the federal
program were reviewed and approved by separate individuals outside of the preparer. However, the expense
submissions for reimbursement had no evidence of review and approval by a separate individual outside of the
preparer. Rimrock Foundation’s statistical reports submitted under the federal program had no evidence of
review and approval by a separate individual outside of the preparer.
Cause – Rimrock Foundation has multiple individuals identifying and compiling eligible costs and statistics,
however, Rimrock Foundation did not have an internal control process in place to ensure evidence of a
secondary review and approval of eligible expenditures and statistical data that were summarized from the
underlying supporting spreadsheets to the final expenditure listing and the final statistical reports. The final
expenditure listing was used to claim allowable costs under the federal program. The review and approval of the
final expenditure listing and the statistical reports submitted to the Substance Abuse and Mental Health Services
Administration was not performed by someone other than the preparer of the report.
Effect – Without a secondary review and approval, there is a possibility that ineligible expenditures may be
claimed under the program and the reports of statistical data may not be accurately completed.
Questioned Costs – None reported.
Context/Sampling – A nonstatistical sample of 60 expenditures was selected, from reports submitted to the
Substance Abuse and Mental Health Services Administration, for testing of payroll, supplies, and equipment for
activities allowed and unallowed and allowable costs/cost principles. The 20 statistical reports and forms
submitted to the Substance Abuse and Mental Health Services Administration were all tested for internal
controls and compliance.
Repeat Finding from Prior Year – Yes.
Recommendation – While we recognize that this condition is not unusual for an organization with limited
staffing, it is important that Rimrock Foundation is aware of this condition for financial reporting purposes.
Management and the board of directors should continually be aware of the financial accounting and reporting
of Rimrock Foundation and any changes in the accounting and reporting requirements. We recommend a review
and approval process which is documented in writing, by someone other than the preparer, of any
reimbursement requests or any statistical reports submitted to the Substance Abuse and Mental Health Services
Administration.
Views of Responsible Officials – Management agrees with the finding.