Finding Text
2023-005 United States Department of Agriculture
Federal Financial Assistance Listing #10.766
Communities Facilities Loans and Grants Cluster
Activities Allowed or Unallowed and Allowable Costs/Cost Principles
Significant Deficiency 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: The Hospital’s requests for reimbursement under the Community Facilities Grant Agreement were not reviewed and approved by a separate individual.
Cause: The Hospital had multiple individuals involved in the process for identifying and compiling the requests for reimbursement; however, the Hospital did not have a formal documented review and approval process in place.
Effect: Without a documented review and approval, there is a possibility ineligible expenditures may be claimed under the program.
Questioned Costs: None reported
Context/Sampling: A nonstatistical sample of 4 ($134,681) out of a population of 9 transactions ($221,625) relating to equipment items were tested.
Repeat Finding from Prior Years: No
Recommendation: We recommend the Hospital implement a control process which includes a formally documented review and approval over the requests for reimbursement submitted under the Community Facilities Grant Agreement.
Views of Responsible Officials: Management agrees with the finding.