Drug Recovery, Inc. (dba Catalyst Behavioral Services, Inc)

2021-006 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Eligibility Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: A participant?s income verification is an important element ensuring the program is benefiting the intended recipients. The Organization shall procure documentation of income prior to delivery of reimbursable services. Documentation of household gross annual income shall be included in the client?s record on the same day or prior to delivery of reimbursable services. The facility must make documented good faith efforts to obtain appropriate documentation to support participants income. Condition: In our eligibility testing, it was noted that no good faith effort was made to obtain appropriate documentation to substantiate the participant income levels to ensure compliance with eligibility requirements set out by the granting agency. Additionally, it was noted that in 7 of the 60 participants tested, no client attestation of indigence was obtained from the participant. Questioned Costs: $17,285 Effect: Lack of implementation of appropriate procedures to ensure income eligibility requirements are satisfied before enrollment in the program can result in participants who are ineligible for services being included in the program. Cause: Internal controls do not appear to be in place to ensure sufficient income verification is taking place during intake of new participants. Repeat finding From Prior Year: Yes Context: Out of the 60 sample of new client intakes, we identified 60 instances where no good faith effort was conducted to obtain gross household income support. Out of the 60 tested we additionally noted 7 instances where no participant attestation of indigence was obtained. Non-statistical sampling was used. Recommendation: We recommend that management update their control processes to ensure that participants meet income requirements and a good faith effort to obtain support is made. Views of Responsible Officials: Management agrees with the finding and has started corrective actions to address these issues.

2021-007 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Eligibility Material Weakness in Internal Control over Compliance Criteria: The facility must have a process in place to ensure that a valid American Society of Addiction Management (ASAM) assessment is conducted upon the intake of a participant into the program. Condition: In our eligibility testing, it was noted that the facility does not have a process in place to ensure ASAM assessments are completed upon intake of new participants to ensure compliance with granting agency requirements. Questioned Costs: None reportable. Effect: Lack of implementation of appropriate procedures to ensure eligibility requirements are satisfied before enrollment in the program can result in participants who are ineligible for services being included in the program. Cause: Internal controls do not appear to be in place to ensure ASAM assessments are taking place during intake of new participants. Repeat finding From Prior Year: Yes Context: Out of the 60 sample of new client intakes, we identified 4 instances where no review or approval of ASAM assessments were conducted or documented. Non-statistical sampling was used. Recommendation: We recommend that management update their control processes to ensure that ASAM assessments are completed and properly documented. Views of Responsible Officials: Management agrees with the finding and has started corrective actions to address these issues.

2021-008 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Eligibility Block Grant for Prevention and Treatment of Substance Abuse (FAL #93.959) Allowable Activities, Period of Performance, Cash Management Material Weakness in Internal Control over Compliance Criteria: Proper document retention requires that support for accounting transactions must be retained for a specific amount of time to ensure that a proper audit trail can be provided. Condition: Several accounting records could not be provided as requested by the audit team. This included various areas in all compliance requirement testing throughout both major programs. Cause: Record retention policies are either not easily accessible by Organization personnel or they are not properly followed by Organization personnel. Effect: Several documents requested by the auditors could not be provided, including documentation of internal control reconciliations and approvals along with support for grant expenditures. Question Costs: None reported Context/Sampling: Opioid STR (FAL #93.788) ? Eligibility ? Out of the 60 tested, 1 instance was noted where no ASAM assessment was available to be tested. Block Grant for Prevention and Treatment of Substance Abuse (FAL #93.959) ? Cash Management and Period of Performance ? Out of the 4 reimbursements tested, 2 instances were noted where no support was available to support the reimbursement requests. ? Allowable Activities ? Out of the 40 tested, we noted 19 instances where no weekly resident billing sheet was available to support controls over allowable activities. Repeat finding From Prior Year: No Recommendation: Implementation of this proper document retention policies would provide the following: ? Reduction in the risk of error in the recording of the transaction as the Organization would have a document to refer to when booking the transaction; ? Better accounting records in the event of both financial statement and granting agency audits; ? Management and its legal counsel would have a document to review in order to determine whether or not the Organization should enter into this transaction; and Views of Responsible Officials: Management agrees with the finding and will implement corrective measures.

2021-009 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Allowable Costs/Allowable Activities Material Weakness in Internal Control over Compliance Criteria: Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: 1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR part 200, subpart E. 2. Conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the federal award as to types or amount of cost items. 3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. 4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. 5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR part 200. 6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period. 7. Be adequately documented. Processes and safeguards should be put in place to ensure a properly functioning internal control environment over allowable cost compliance requirements. This control environment should be designed in such a way that it ensures costs incurred by the program are allowable. Specifically, as it relates to the review and approval of vendor invoices. Condition: We identified a lack of a formal process to review, approve and reconcile medication related invoices to the Organizations medical records and billing report submitted to the granting agency. Cause: The design of the internal controls related to invoice processing and approval is inadequate to ensure compliance. Effect: The entity increases the risk that unallowable costs are incurred by the program and not detected and corrected by management. Question Costs: None reported Context/Sampling: Out of our total sample of 10 reimbursements we detected 2 instances where no controls were apparent to ensure accurate reconciliation of costs before submission to the granting agency. Non-statistical sampling was used. Repeat finding From Prior Year: Yes Recommendation: We recommend that management update their control processes to ensure all reimbursement requests are reviewed and approved prior to submission for federal reimbursement. Views of Responsible Officials: Management agrees with the finding and will implement corrective measures.

2021-010 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Procurement, Suspension, and Debarment Material Weakness in Internal Control Over Compliance Criteria: The Organization must establish and maintain effective internal control over federal awards that provides reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and terms and conditions of the federal award. Management is responsible for establishing procedures for procurement of equipment, real property, and other services funded by federal funds. The procurement records and files for purchases in excess of the simplified acquisition threshold (set at $100,000) shall include at the minimum: 1. Basis for contractor selection; 2. Justification for lack of competition when competitive bids are not obtained; and 3. Basis for award cost or price For procurements above $3,500, and up to the simplified acquisition threshold, informal purchasing procedures are acceptable, but price or rate quotes must be obtained from and adequate number of qualified sources and kept on file. It is up to the Organization?s discretion, as reflected in your written policy, to determine the adequate number of qualified sources (i.e. any number greater than one) and the methods of obtaining the price or rate quotes. In addition, award recipients must not utilize any vendor which is suspended or debarred or is otherwise excluded from the central contractor registry. Condition: The Organization does not appear to have a current procurement policy for compliance with the procurement, suspension and debarment compliance requirement of Uniform Guidance as noted above. Cause: The Organization does not have a written policy related to procurement or established procedures in place related to suspension and debarment as required by the Uniform Guidance. Effect: Inadequate controls over this area of compliance result in an environment where it is reasonably possible that the Center would not have the required documentation in place and would not be able to detect and correct noncompliance in a timely manner. Questioned Costs: None reported. Context: No updated policy exists as required by the Uniform Guidance. Pharmacy purchases were selected for testing for such procedures. The vendor for these purchases was not listed as under the suspended and debarred entities. However, no controls were performed to check these vendors prior to the use of those vendors. The pharmacy vendor was not listed on the suspended/debarred database. Repeat Finding from Prior Years: No Recommendation: We recommend that implementing a system of internal controls over the procurement, suspension and debarment compliance requirements, including a formal policy in accordance with Uniform Guidance. Views of Responsible Officials: Management agrees with the finding.

2021-011 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (FAL #93.788) Allowable Activities, Allowable Costs Material Weakness in Internal Control over Compliance and Material Noncompliance Criteria: Proper document retention requires that support for accounting transactions must be retained for a specific amount of time to ensure that a proper audit trail can be provided. Condition: Several accounting records could not be provided as requested by the audit team. This included various areas in all compliance requirement testing throughout both major programs. Cause: Record retention policies are either not easily accessible by Organization personnel or they are not properly followed by Organization personnel. Effect: Several documents requested by the auditors could not be provided, including documentation of internal control reconciliations and approvals along with support for grant expenditures. Question Costs: $26,837 Context/Sampling: Out of the 10 transactions tested for allowable activities/allowable costs, 3 instances were noted in which no documentation of approval could be provided. Repeat finding From Prior Year: No Recommendation: Implementation of this proper document retention policies would provide the following: ? Reduction in the risk of error in the recording of the transaction as the Organization would have a document to refer to when booking the transaction; ? Better accounting records in the event of both financial statement and granting agency audits; ? Management and its legal counsel would have a document to review in order to determine whether or not the Organization should enter into this transaction; and Views of Responsible Officials: Management agrees with the finding and will implement corrective measures.

2020-008 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (CFDA #93.788) Eligibility Material Weakness in Internal Control over Compliance Criteria: A participant?s income verification is an important element ensuring the program is benefiting the intended recipients. The Organization shall procure documentation of income prior to delivery of reimbursable services. Documentation of household gross annual income shall be included in the client?s record on the same day or prior to delivery of reimbursable services. The facility must make documented good faith efforts to obtain appropriate documentation to support participants income. Condition: In our eligibility testing, it was noted that no good faith effort was made to obtain appropriate documentation to substantiate the participant income levels to ensure compliance with eligibility requirements set out by the granting agency. Additionally, it was noted that in 3 of the 40 participants tested, no client attestation of indigence was obtained from the participant. Questioned Costs: None reportable. Effect: Lack of implementation of appropriate procedures to ensure income eligibility requirements are satisfied before enrollment in the program can result in participants who are ineligible for services being included in the program. Cause: Internal controls do not appear to be in place to ensure sufficient income verification is taking place during intake of new participants. Repeat finding From Prior Year: No Context: Out of the 40 sample of enrollment status changes, we identified 40 instances where no good faith effort was conducted to obtain gross household income support. Out of the 40 tested we additionally noted 3 instances where no participant attestation of indigence was obtained. Non-statistical sampling was used. Recommendation: We recommend that management update their control processes to ensure that participants meet income requirements and a good faith effort to obtain support is made. Views of Responsible Officials: Management agrees with the finding and has started corrective actions to address these issues.

2020-009 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (CFDA #93.788) Cash Management Material Weakness in Internal Control over Compliance Criteria: Non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury or pass-through entity and disbursement by the non-federal entity for direct program or project costs and the proportionate share of allowable indirect costs, whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means (2 CFR section 200.305(b)). To the extent available, the non-federal entity must disburse funds available from program income (including repayments to a revolving fund), rebates, refunds, contract settlements, audit recoveries, and interest earned on such funds before requesting additional federal cash draws (2 CFR section 200.305(b)(5)). Due care should be taken to create an internal control environment that is effective in mitigating the risk that the organization does not request funds before costs are incurred or services are provided. Condition: We identified a lack of a formal process to review and approve reimbursement requests before submission to ensure compliance. Cause: The design of the internal control cash management compliance requirements is an integral part of ensuring compliance with federal regulations. Effect: The entity increases the risk that erroneous or incomplete reimbursement requests are submitted to the granting agency or that requests are made before expenditures and/or services are incurred or provided. Question Costs: None reported Context/Sampling: Our total sample was 7 reimbursements. We detected 2 instances where no controls were in place to ensure a review and approval of information submitted to the granting agency was conducted. Non-statistical sampling was used. Repeat finding From Prior Year: No Recommendation: We recommend that management update their control processes to ensure all reimbursement requests are reviewed and approved prior to submission. Views of Responsible Officials: Management agrees with the finding and will implement corrective measures.

2020-010 U.S. Department of Health and Human Services Passed through from Oklahoma Department of Mental Health and Substance Abuse Services Opioid STR (CFDA #93.788) Allowable Costs Material Weakness in Internal Control over Compliance Criteria: Except where otherwise authorized by statute, costs must meet the following general criteria in order to be allowable under federal awards: 1. Be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR part 200, subpart E. 2. Conform to any limitations or exclusions set forth in 2 CFR part 200, subpart E or in the federal award as to types or amount of cost items. 3. Be consistent with policies and procedures that apply uniformly to both federally financed and other activities of the non-federal entity. 4. Be accorded consistent treatment. A cost may not be assigned to a federal award as a direct cost if any other cost incurred for the same purpose in like circumstances has been allocated to the federal award as an indirect cost. 5. Be determined in accordance with generally accepted accounting principles (GAAP), except for state and local governments and Indian tribes only as otherwise provided for in 2 CFR part 200. 6. Not be included as a cost or used to meet cost-sharing or matching requirements of any other federally financed program in either the current or a prior period. 7. Be adequately documented. Processes and safeguards should be put in place to ensure a properly functioning internal control environment over allowable cost compliance requirements. This control environment should be designed in such a way that it ensures costs incurred by the program are allowable. Specifically, as it relates to the review and approval of vendor invoices. Condition: We identified a lack of a formal process to review, approve and reconcile medication related invoices to the Organizations medical records. Cause: The design of the internal controls related to invoice processing and approval is inadequate to ensure compliance. Effect: The entity increases the risk that unallowable costs are incurred by the program and not detected and corrected by management. Question Costs: None reported Context/Sampling: Our total sample was 7 reimbursements. We detected 2 instances where no controls were apparent to ensure a review and approval of information submitted to the granting agency was conducted. Non-statistical sampling was used. Repeat finding From Prior Year: No Recommendation: We recommend that management update their control processes to ensure all reimbursement requests are reviewed and approved prior to submission for federal reimbursement. Views of Responsible Officials: Management agrees with the finding and will implement corrective measures.