Performance audit of DoH CARES funds targets a number of deficiencies
Pago Pago, AMERICAN SAMOA — “After the fact purchases,” maintaining “supporting documentation is very poor” and the high number of vendors who were paid in advance — were among the findings outlined in the Performance Audit report by the Territorial Audit Office (TAO) of the more than $14 million in federal CARES Act funding awarded to the Health Department (DoH) during the COVID pandemic.
The review period covered in the 60-page report — submitted recently to Gov. Lemanu P. S. Mauga — is from Mar. 01, 2020 through to Dec. 31, 2021 for COVID-19 funds from the US Department of Health and Human Services via the federal Department of Treasury.
SUMMARY OF FINDINGS
At the outset of the report, TAO outlined its summary of findings.
“Retention and availability requirements and adequate maintenance of supporting documentation is very poor,” according to the first-summary finding in the TAO report, which explained that one of CARES Act federal awards conditions relating to COVID-19 funded activities is to retain records of all COVID-19 related relief fund payments such as payroll records and purchase.
The second finding cited in the report is, “After the fact purchases” in which “the proper approval was obtained after the department committed to purchases.”
“The approval shall be made and obtained ‘before’ not ‘after’,” the purchase, the report said of this summary finding.
Other findings summarized at the outset of the report:
• The concept of the Payment Voucher (AP) system requires a review to address issues that derived during the COVID-19 activities.
• A high number of vendors were paid in advance, exempting vendors from the Procurement rules for prepayment of goods and services.
• Payroll approval and authorization of work hours; incorrect employee pay-rates and manual recording of hours.
• There were no vehicle rental agreements prepared for rental vehicles used during the COVID-19 pandemic.
• Not all Journal entries raised and posted into the accounting system have complete and proper supporting documents.
• The file physical copies of Federal Financial Reports (FF) maintained shows Forms are not completely filled out as required.
According to the report, in addition to the main findings discussed in the “Findings and Recommendations” section, the “Other Matters” section of the report contains additional information on detailed findings.
(Samoa News will report in future editions on details of each finding, as well as response from DoH management, as included in the audit.)
According to the report, “Territorial Audit Office (TAO) experienced significant audit delays by not receiving required accounting information” from DoH.
“During the course of the examination, the audit team encountered a number of limitations where the information that was requested was not readily available in a timely manner,” the report says. “It was our understanding that access to information begins once the Department of Health was notified of the commencement of the performance audit.”
“Nevertheless, the Department of Health should entreat the information to make available as they would for any other important business of the department,” it points out. “Significant delays and sometimes uncooperative is frustrating and hurts the audit process. It wastes valuable time and limits the audit process.”
TAO “highly” recommends that DoH shall have measurable goals and timeframes to mark their efforts to perform better. In addition, an action plan shall be in place laying-out clear objectives.
“Effective communication is an essential tool in achieving productivity and helps the audit process go smoothly,” TAO said. “Management should understand that audits lower the regulatory risk.”
Furthermore, audits are supposed to be preventive actions to help find nonconformities and areas for improvement. Thus, re-emphasizing the importance of higher and middle management's personnel role in the audit process.
REPORT TO GOVERNOR
In a Mar. 16, 2023 letter, Acting Territorial Auditor, Tofa Sualauvi H. Sua submitted to the governor the report, saying that TAO began an initial audit as members of the ASG’s Compliance Review Committee (CRC) in the beginning of 2020 and worked cooperatively with the committee throughout the audit. However due to the inability and other constraints, only a portion of requested information was made available by DoH.
“This is the most difficult period and the information was not sufficient to allow the auditors to identify and determine reasonableness of some disbursements,” Tofa wrote to the governor.
Lemanu was also informed that TAO “experienced difficulties in obtaining full and unlimited access to information”. And this causes a lot of unnecessary delay in the audit process.
“As auditors, we always insist on information that we believe is the key in the completion of our work and we are not obliged to explain why we need such information,” the Acting Territorial Auditor said. “Coordinating departments and other offices shall proactively provide information to the auditors.”
“Our work reveals that the department has a poor filing system which makes the audit process a difficult one. Regrettably, this audit was significantly delayed and prolonged discussions with the Department around accessing information necessary to complete the audit,” Tofa explained.
Additionally, the audit engagement was agreed to commence in June 2022 and was expected to finalize in August, however it took three months later to complete the audit.
“While audit tests reveal discrepancies, opportunities to improve and methods to correct these deficiencies certainly exist,” said Tofa, noting that the DoH director adapts timely internal communications with his management and team leaders.
“This adaptation progressed because of his commitment and with a focus on fixing operational shortcomings,” said Tofa.
Before the final report was completed TAO requested comments from DoH and written responses were received on Jan. 23, 2023. Additionally, TAO said matters in this report were discussed with the DoH management team during and at the conclusion of the audit via an exit conference.
The bottom-line, said Tofa is that, he is pleased that the DoH director and his team have taken steps to improve operational issues while also working proactively to implement recommendations made in the TAO audit.
“As American Samoa has emphasized throughout the pandemic, we were all in this together. That remains true today as we hold each other accountable and help the Government serve the people of American Samoa more effectively and [with] transparency,” said Tofa, who thanked the DoH staff as well as the medical professionals and the frontline workers who have worked tirelessly to keep American Samoa safe throughout the pandemic.
In his response letter, included in its entirety in the report, Health director, Motusa Tuileama Nua said “DOH concurs to all the findings mentioned in this audit report and are [sic] actively training employees to strengthen their understanding of the importance of being organized, properly stating documentation for great [sic] productivity and future growth for the Department of Health.”
Motusa noted in the Jan. 23, 2023 response that DoH is currently making revisions and amendments to its Standard Operating Procedures (SOP), per the audit, as a set benchmark that DoH will follow, aligning itself with the American Samoa Government's SOP.
“Moving forward, the Department of Health plans on conducting a monthly departmental review to ensure we align with all ASG policies and procedures,” he said.