Finding Text
2020-107 Lack of ACH Payment Review and Approval (initially reported 2020)
Assistance Listing Number: 93.224
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)
Compliance Requirement: Activities Allowed, Allowable Costs and Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: 6H80CS06452-15 (2020), COVID-19 1H8CCS35035-01 (2020), COVID-19 1H8DCS36007-01 (2020) and COVID-19 1H8ECS39010-01 (2020)
Finding Type: Material Weakness in Internal Control
Known Questioned Costs: $0
Condition: Payments are not reviewed prior to ACH payments. The Organization has no documented policies and procedures for handling the processing and review of ACH payments.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Based on grant compliance requirements related to activities allowed and allowable costs, costs charged to federal programs under the HCP award must comply with the cost principles at 45 CRF part 75, subpart E, and any other requirements or restrictions on the use of federal funds. Based on compliance requirements related to period of performance, federal awards are charged for (a) allowable costs incurred during the period of performance: or (b) costs incurred prior to the date the federal award was made that were authorized by the federal awarding agency or pass-through entity.
Cause: The payment for expenses under the program were not reviewed prior to payment for allowability of costs and whether the costs were incurred during the period of performance.
Effect: The Organization could report costs that were not allowable or not incurred during the period of performance which could result in losing funding.
Recommendation: We recommend the Organization develop policies and procedures related to processing and reviewing ACH payments under federal award programs for allowability of costs and determination of whether the costs were incurred during the period of performance.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. Management understands the importance of reviewing ACH payments prior to payment. We will update our policy to include a process for ACH reviews prior to payment. The planned corrective action for this finding is currently in the process of development, approval, and implementation.