Finding 976396 (2023-002)

2023-002: Indirect Costs Federal Agency: U.S. Department of Health and Human Services Federal Program: Child Care and Development Block Grant Federal Assistance Listing Number: 93.575 Pass-Through Agency: MN Department of Health and Human Services Pass-Through Number(s): None Award Period: March 7, 2022 through September 30, 2023 Type of Finding: Significant Deficiency in Internal Control over Compliance, Other Matters Criteria or specific requirement: Per Uniform Guidance 200.214 Indirect Costs, the Organization is subject to indirect cost regulations and uses the de minimis cost rate. The Organization’s internal control structure requires approval of calculation of indirect costs prior to submission of reimbursement requests. Condition: There was no documentation of approval of calculation of indirect costs retained. Questioned costs: None Context: For a one out of three indirect cost disbursements tested there was no documentation of approval of reimbursement requests retained. Cause: The process in place for reviewing monthly reports prior to submission was not consistently effective. Effect: Without consistency of procedure in place, there is a heightened risk that drawdowns could be made that are incorrectly calculated, or an erroneous amount not supported by expenditures made by the Organization. Repeat Finding: No Recommendation: We recommend the Organization follow their process to approve reimbursement requests prior to submission and retain documentation of such approval. Views of responsible officials and planned corrective actions: There is no disagreement with the finding.