American Cancer Society, Inc.Non-Profit

Federal Program Information: Provision of Technical Assistance and Training Activities to Assure Comprehensive Cancer Control Outcomes (ALN 93.427) Criteria or Specific Requirement: In accordance with standards for documentation of personnel expenses, charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable, and properly allocated (2 CFR §200.430(g)(1)(i)). Condition: ACS’s design of the reconciliation control over personnel expense did not include a monitoring element to ensure that reconciliations were performed consistently and accurately for the program. Cause: Administrative oversight and insufficient internal control. Effect or Potential Effect: Improper allocation of salary and fringe benefits and the potential for unallowable expenditures to be charged to Federal awards. Questioned Costs: None. Context: During after-the-fact reviews of interim charges, adjustments to previously allocated salary expenses were identified but not recorded, or identified but not recorded accurately, ultimately resulting in undercharges to the federal award across all payroll expenditures to the federal award. Although the deviations in internal control over compliance did not result in noncompliance in the aggregate, 10 of 28 instances of the internal control over compliance samples tested were identified as control deviations. Identification as a Repeat Finding: There was no similar finding identified in the prior year. Recommendation: We recommend that ACS enhance and follow its procedures and internal controls to ensure that charges are accurate and properly allocated. Views of Responsible Officials: Internal controls will be enhanced by updating review procedures. After adjustments to allocated salary expenses are identified, a monitoring control will be added to ensure that reconciliations are performed consistently and accurately. We will periodically select samples of time and effort adjustments and trace them to the general ledger to ensure accuracy and completeness.

Federal Program Information: Immunization Cooperative Agreements (ALN 93.268), Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s Health (ALN 93.421) Criteria or Specific Requirement: B. Allowable Costs/Cost Principles - 2 CFR §200.430(i)(1)(iii) indicates that budget estimates (i.e., estimates determined before the services are performed) alone do not qualify as support for charges to federal awards, but may be used for interim accounting purposes, provided that: (A) the system for establishing estimates produces reasonable approximations of the activity actually performed; (B) significant changes in the corresponding work activity are identified and entered into the records in a timely manner; and (C) the non-Federal entity’s system of internal controls includes processes to review after-the-fact interim charges made to a federal award based on budget estimates. Condition: Timecards were completed with estimated hours based on the budget instead of actual time incurred and recorded by the employee, resulting in salary and fringe benefit charges to the federal award based on the budgeted estimates. In addition, certain employee timecards did not have evidence of supervisor approvals. Cause: Administrative oversight and insufficient internal control. Effect or Potential Effect: Noncompliance with documentation of personnel expense standards; improper allocation of salary and fringe benefits. Questioned Costs: Indeterminable. Context: For Assistance Listing 93.421, 4 of 26 timecards tested included budget estimates that were not subsequently reviewed. For Assistance Listing 93.421, 4 of 26 timecards tested were not supervisor-approved. For Assistance Listing 93.268, 2 of 6 timecards tested included budget estimates that were not subsequently reviewed. For Assistance Listing 93.268, 1 of 6 timecards tested were not supervisor-approved. Identification as a Repeat Finding: There was no similar finding identified in the prior year. Recommendation: We recommend that ACS enhance its procedures and internal controls to ensure that time and effort records are appropriately maintained. Views of Responsible Officials: Cost controls will be enhanced by updating review procedures over labor charges. We will improve effectiveness of controls by having timecards used for effort reporting reviewed each payroll. First, the reviewer will review timecard reports to ensure grant funded staff have recorded and their managers have approved their actual effort. This additional review will ensure that the labor costs have been appropriately charged to the grants. Finally, we will work closely with grant staff and their managers to ensure proper training and stress the importance of recording and approving their efforts.

Finding 2020-001 Reporting ? Financial Assistance Listing Number: 93.421 Program Name: Centers for Disease Control & Prevention, Category C: Hospital Systems Granting Agency: Centers for Disease Control & Prevention, Department of Health and Human Services Criteria: As per 2 CFR 200.302, accurate, current, and complete disclosure of the financial results of each Federal award or program must be included in accordance with the reporting requirements specified in 2 CFR 200.327. In addition, as per the grant agreement, CDC requires financial data as documentation of expenditures, outlays, and unobligated balances. The Federal Financial Report (FFR) is required on an annual basis except for awards where more frequent reporting is noted in the Notice of Award. 2 CFR 200.303 requires that a nonfederal entity must ?(a) establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and the terms and conditions of the Federal award. Condition: During fiscal year 2020, we tested one federal financial report (FFR -SF 425) that was submitted to the Department of Health and Human Services and noted that the Society reported incorrect ?Cash Receipts? and ?Cash Disbursements? amounts as of the reporting period end date. Based on the accounting records, the Society, as of the reporting period end, had actual cash receipts of $ 810,331 and cash disbursements of $1,947,639. The Society reported cash receipts of $ 2,451,156 which included all cash receipts that were received by the Society after the end of the reporting period and Cash disbursements of $2,451,156 which included costs incurred during the reporting period and paid after the end of the reporting period. Cause: The Society did not have an effective review process in place prior to the submission of the FFR. The reporting guidelines state that only actual cash receipts and cash disbursements as of the end of the reporting period should be included in these lines within FFR. Effect: The Society included all subsequent cash receipts after the end of the reporting period and included total expenditures (accrual basis) in these lines and thereby overstated the receipts and disbursements amounts. Since the grant is on a cost reimbursement basis and cash drawdowns were based on actual costs incurred and paid for, the error did not result in any excess cash drawdowns or questioned costs. Questioned Costs: None; Identification as a repeat finding, if applicable: We noted a similar finding in 2019 that was reported under finding number 2019-001. Recommendation: We recommend the Society enhance its review process over reporting compliance by reviewing the FFR instructions and the support for the related amounts to ensure accuracy in reporting the correct amounts in the appropriate lines within the FFR. Views of responsible officials: Financial reporting controls will be enhanced by updating review and approval procedures over reporting compliance. We intend to improve the effectiveness of the review control by having the reviewer agree the amounts to the source documentation and ensure the amounts included are consistent with the instructions for the relevant reporting. All FFR will follow the enhanced approval and review process prior to submission. This control will be implemented by September 1, 2021.

Finding 2019-001 Reporting ? Financial CFDA Number: 93.421 Program Name: Centers for Disease Control & Prevention (CDC) - Category C: Hospital Systems Granting Agency: Centers for Disease Control & Prevention, Department of Health and Human Services; Criteria: As per 2 CFR 200.302, accurate, current, and complete disclosure of the financial results of each Federal award or program must be included in accordance with the reporting requirements specified in 2 CFR 200.327. In addition, as per the grant agreement, CDC requires financial data as documentation of expenditures, outlays, and unobligated balances. The Federal Financial Report (FFR) is required on an annual basis except for awards where more frequent reporting is noted in the Notice of Award; Condition - During fiscal year 2019, we tested one financial report (FFR) that was submitted to the Department of Health and Human Services and noted that two incorrect amounts were reported on the FFR. The company reported $523,997 as Cash on Hand and the Cash Disbursement amount was reported as zero. The accounting records and testing showed the company disbursed $523,997 during the reporting period. As such, the Cash Disbursement amount that should have been included in the FFR was $523,997 and the Cash on Hand should have been reported as zero; Cause/Effect: The company did not have a thorough review in place prior to submission of the FFR. As such, the company incorrectly reported the Cash Disbursements amount on the Cash on Hand line in its annual FFR. Since the grant is on a cost reimbursement basis and cash drawdowns were based on actual costs incurred and paid for, the error did not result in any excess cash drawdowns or questioned costs; Questioned Costs: None; Recommendation: We recommend the company enhance its internal control process over reporting compliance to ensure that a thorough review of the report is performed prior to submission to ensure accuracy in reporting the amounts; Views of responsible officials: Financial reporting controls will be enhanced by updating review and approval procedures over reporting compliance. All FFR will have approval by management required prior to submission.