Apache Behavioral Health ServicesTribal Government

2024-002 — Allowable Costs/Cost Principles Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination, Medical Assistance Program ALN: 93.441, 93.778 Award period: 1/1/2024 – 12/31/2026, 1/1/2024 – 12/31/2024 Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, the 2 CFR Part 200.430 requires that charges to Federal awards for salaries and wages must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Employee benefits expenditures charged to the programs do not agree to supporting documentation, such as employee benefit provider premium invoices. Context: All employee benefits charged to the programs. Questioned Costs: Undeterminable Cause: The payroll module and account structure setup in the accounting system (multiple benefits going into one benefit account) made it virtually impossible to reconcile employer benefits to the employer benefits provider premium invoices and/or employee benefit election forms. Effect: ABHS may not be able to demonstrate that the costs charged to federal programs are allowable. Auditor’s Recommendations: ABHS should implement a reconciliation process to ensure that employee benefit expenditures charged to federal programs agree with employee benefit provider premiums invoices and/or employee benefit election forms. Management’s Response: ABHS has implemented a new accounting and payroll system which allows the organization to reconcile employee benefit expenditures monthly. These systems were implemented in March and April of 2025 and management expects this finding to be resolved in 2025.

Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Medical Assistance Program, COVID-19 Block Grants for Prevention and Treatment of Substance Abuse ALN: 93.778, 93.959 Award period: July 1, 2022 – June 30, 2024 Criteria: According to 2 CFR Part 200.403, to be allowable under federal awards, costs must be adequately documented. Additionally, the 2 CFR Part 200.430 requires that charges to Federal awards for salaries and wages must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Employee benefits expenditures charged to the programs do not agree to supporting documentation, such as employee benefit provider premiums invoices. Additionally, the pay rate paid to an employee was different from their approved pay rate. Lastly, an employee received eight hours of birthday pay (as allowed under ABHS’s personnel policies) in two different pay periods. Context: Nine of 25 employee benefit expenditures tested did not agree with employee benefit provider premium invoices. One of 25 employees tested was paid at a rate different from their approved pay rate. One of 25 employees tested received eight hours of birthday pay in two different pay periods. Questioned Costs: $358 for the Medical Assistance Program and $0 for the COVID-19 Block Grants for Prevention and Treatment of Substance Abuse program. Cause: The employer portion of employee benefit premiums are preloaded into the accounting system each year to be allocated to the different business units/programs at ABHS. ABHS does not have a process in place to subsequently reconcile these expenditures to the employer benefits provider premium invoices and/or employee benefit election forms. There was also a lack of review of approved pay rates and leave requests during 2023. Effect: ABHS may not be able to demonstrate that the costs charged to federal programs are allowable. Auditor’s Recommendations: ABHS should implement a reconciliation process to ensure that employee benefit expenditures charged to federal programs agree with employee benefit provider premiums invoices and/or employee benefit election forms.41 Management’s Response: ABHS acknowledges the finding related to employer benefits. As a corrective measure, we have initiated a comprehensive review of our current systems and identified key areas that require immediate upgrades. With the adoption of these upgrades, ABHS will perform an interim review of the expenditures recorded in the accounting system compared to the invoices.