North Sound Behavioral Health Administrative Services OrganizationLocal Government

2020-001 The Organization improperly charged the program for expenditures incurred outside the period of performance. CFDA Number and Title: 93.959 Block Grants for Prevention and Treatment of Substance Abuse Federal Grantor Name: U.S. Department of Health and Human Services Federal Award/Contract Number: N/A Pass-through Entity Name: Washington Health Care Authority Pass-through Award/Contract Number: K4159 Questioned Cost Amount: $29,704 The Substance Abuse Prevention and Treatment Block Grant (SABG) program awards funds to states, territories and one Indian tribe for the purpose of planning, implementing and evaluating activities that prevent and treat substance abuse and other statute-authorized activities. During fiscal year 2020, the Organization spent $3,833,323 in SABG funds, including $1,276,458 that was passed through to subrecipients. Federal regulations require every subaward to specify the period of performance start and end date. Eligible program costs must be incurred during that time period. The contract between the Washington Health Care Authority and the Organization specified the period of performance for this award was July 1, 2020, through June 30, 2021. Description of Condition The Organization had adequate internal controls for ensuring it materially complied with the period of performance requirement. However, due to an oversight in the year-end accrual process, the Organization charged the program $29,704 for subrecipient expenses incurred between November 2019 and June 2020, which was before the performance period. The issue was not reported as a finding in the prior audit. Cause of Condition The Organization did not perform an adequate review of expenditures during the year-end journal entry process to ensure all costs charged to the program were within the period of performance. Effect of Condition and Questioned Costs We tested all year-end journal entries that charged expenditures to the program. We are questioning the $29,704 charged to the program for subrecipient expenses incurred before the start of the performance period. Federal regulations requires the State Auditor?s Office to report known questioned costs that are greater than $25,000 for each type of compliance requirement. We question costs when we find the Organization has not complied with grant regulations and/or when it does not have adequate documentation to support expenditures. Recommendation We recommend the Organization monitor costs charged to the program to ensure they are incurred during the period of performance. Agency?s Response We agree an error was made. It has been corrected. Auditor?s Remarks We appreciate the Organization?s commitment to resolve the finding and thank the Organization for its cooperation and assistance during the audit. We will review the corrective action taken during the next regular audit. Applicable Laws and Regulations Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), section 516, Audit findings, establishes reporting requirements for audit findings. Title 2 CFR Part 200, Uniform Guidance, section 200.1 defines the Period of Performance.