Columbia River Mental Health ServicesNon-Profit

Condition: CRMHS’ internal controls were not functioning as designed to ensure that federal draw requests were reviewed and reconciled to underlying allowable expenditures for the above program, resulting in CRMHS drawing down federal funds in advance of immediate cash needs. Criteria: Under 2 CFC Part 200.305, non-federal entities must minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement of those funds for program purposes. Funds should only be drawn down as need for immediate cash requirements.Cause: CRMHS made a draw prior to the year ended June 30, 2024 in excess of what was needed for immediate cash needs.Effect: Holding excess federal funds for extended periods can result in non-compliance with federal regulations and could potentially increase the risk of mismanagement or misuse of funds.Questioned Costs: $155,949. Recommendation: We recommend management review the current controls over cash management procedures and ensure a proper reconciliation of all federal draw requests to supporting expenditure records prior to submission of the draw request.View of responsible officials: CRMHS management concurs with the finding. During the fiscal year ended June 30, 2024, CRMHS did not consistently operate internal controls over federal cash management as designed. Specifically, a federal draw was processed in excess of immediate cash needs and was not fully reconciled to supporting allowable expenditures prior to submission. This resulted in federal funds being drawn in advance of program disbursement requirements.Management acknowledges that this practice does not comply with 2 CFR §200.305, which requires non-federal entities to minimize the time between drawdown of federal funds and their disbursement for program purposes.While the funds were ultimately expended on allowable program costs, the timing of the draw created a compliance exception and reflects a material weakness in internal control over compliance. Management takes this matter seriously and has implemented corrective measures to strengthen cash management oversight and reconciliation procedures. The Chief Financial Officer is responsible for the implementation and oversight of these corrective measures.

Criteria: The Substance Abuse and Mental Health Projects of Regional and National Significance program provides grants that cover multiple fiscal years; however, the funds are awarded on a 12-month budget period. Unused funds can be carried over between periods, though the program requires the Federal Financial Report (SF-425) be submitted 90 days after the end of each 12-month period. Condition: During our audit, we noted that CRMHS recorded a liability of $98,902 for disallowed carryover amounts drawn from the Substance Abuse and Mental Health Projects of Regional and National Significance program. Effect: CRMHS drew down carryover funds of $98,902 during the fiscal year ended June 30, 2022, that it was not entitled to request. Cause: CRMHS did not timely file a form SF-425 as required by the Substance Abuse and Mental Health Projects of Regional and National Significance program. This disallowed the carryover of remaining funding into the 2023 fiscal year; however, CRMHS had not documented this occurrence and due to employee turnover, the funds were included in draw requests during the 2022 fiscal year. Recommendation: We recommend that management design and implement procedures that allow for and ensure the timely submission of the required reports and identification of allowable carryover of unused funds from prior grant periods. View of responsible officials: Management agrees with the finding and has implemented procedures that will prevent late submission of required reports and identifies unallowable funds forfeited during prior periods.