Finding 977589 (2021-002)

Finding 2021-002 – Preparation of the Schedule of Expenditures of Federal Awards (Significant Deficiency) Federal agency: U.S. Department of Health and Human Services Federal program title: COVID-19 HRSA COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund AL Number: 93.461 Award Period: 2021 Type of Finding: Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: The Uniform Guidance (2 CFR 200) Section 200.510 requires an auditee to “prepare a schedule of expenditures of Federal awards (SEFA) for the period covered by the auditee’s financial statements [that]….at a minimum shall…list individual Federal programs by Federal agency…[and] provide total Federal awards expended for each individual Federal program and the Assistance Listing Number (ALN) number or other identifying number when the ALN information is not available.” In accordance with Uniform Guidance, the Organization is required to maintain a structure of internal control to ensure compliance with applicable reporting requirements. Condition/Context: The Organization did not have sufficient controls to ensure the SEFA included all expenditures that qualified as an expenditure of a federal award during the period. Questioned costs: None noted. Cause: Factors contributing to the condition included the high volume of activity related to the new COVID-19 programs and the lack of understanding that the related payments represented grant expenditures that were required to be reported on the SEFA. Effect: The total expenditures presented per the preliminary SEFA increased by $1,340,525 related to ALN #93.461, COVID-19 Claims Reimbursement for the Uninsured Program and the COVID-19 Coverage Assistance Fund. No changes to the other financial statements were needed and the final SEFA was corrected to reflect the change. Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Organization develop and implement a review process throughout the year to ensure compliance with SEFA reporting requirements as outlined in Uniform Guidance. Views of Responsible Officials: Processes will be put in place to compile the SEFA, reconcile to support, and perform a related review prior to audit. In addition, grant agreements will be required to go through the contract approval process. This will allow all grants to be identified and tracked, ensuring completeness. This has been implemented as of March 2024.