United Way of Metropolitan Dallas, Inc

Federal Agency: Department of Health and Human Services Federal Program: Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Marketplaces Federal Award Number: 93.332 Award Year: 2022 Type of Finding: Control Deficiency Compliance Requirement: Cash Management Criteria: Per 2022 Compliance Supplement part III subpart C, for cost reimbursement contracts under the Federal Acquisition Regulation (?FAR?), reimbursement payment is the predominant method of funding. Advance payments under FAR-based contracts are rare. The FAR clause at 48 CFR section 52.216-7 applies to reimbursement payment. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. As defined in 48 CFR section 52.216-7(b)(1), with relation to supplies and services purchased for use on the contract, ?ordinary course of business? would be in accordance with the terms and conditions of a subcontract or invoice, and ordinarily within 30 days of the request to the federal government for reimbursement. Condition: For one of the two selected reimbursement requests judgmentally selected for testing, an exception was noted for lack of formal documentation of the review and approval over the reimbursement requests. Per review of the entire population, the first five of the nine reimbursement requests did not have formal documentation of review and approval. However, we noted upon the hiring of a new controller the remaining four requests did have documentation of the review and approval. Questioned Costs: None Context: The application of UWMD?s policy to maintain documentation of the review and approval of reimbursement requests for this contract was not effective for the first six months of the year. Subsequent to March 31, 2022, we noted the policy was effective and documentation of review and approval was maintained. Cause: Management failed to have a policy in place throughout the audit period to ensure documentation of the timely review and approval of reimbursement requests was maintained. Effect or potential effect: Failure to ensure reimbursement requests are timely reviewed and approved by appropriate personnel could result in unallowable costs being submitted for reimbursement. Repeat Finding: No Recommendations: We note that management implemented a process requiring the documentation of the review and approval of reimbursement requests is maintained. We recommend that management consider the need to review UWMD?s comprehensive policies to ensure all current and future state and federal grants are addressed by this policy and increase training efforts for all personnel responsible and involved in its grant program management to ensure proper awareness and understanding of cash management controls. Views of responsible officials: The new UWMD Controller transitioned in January of 2022 and noticed in April that she was not receiving formal approval requests to approve disbursement requests against the grant. She immediately implemented a formal review process that was in place for the second six months of the fiscal year and are permanently in place. She also retroactively reviewed disbursements for the first six months of the grant and observed that all were made in line with grant guidelines and were appropriate. The UWMD Controller has also reviewed the accountant?s checklist for all grants ensuring that the approval is a documented step in the process and has provided training to the UWMD team.

The new UWMD Controller transitioned in January of 2022 and noticed in April that she was not receiving formal approval requests to approve disbursement requests against the grant. She immediately implemented a formal review process that was in place for the second six months of the fiscal year and are permanently in place. She also retroactively reviewed disbursements for the first six months of the grant and observed that all were made in line with grant guidelines and were appropriate. The UWMD Controller has also reviewed the accountant?s checklist, effective November 1, 2022, for all grants ensuring that the approval is a documented step in the process and has provided training to the UWMD team.