Audit 21930

FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT Finding 2022-002: A.L. #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution, U.S Department of Health and Human Services Finding Type: Material weakness/noncompliance Repeat Finding: No Condition: Northeastern Center did not have adequate controls over PRF Period 2 funding and did not comply with federal requirements for reporting on use of funds. Criteria: The Organization must establish and maintain effective internal control over federal awards that provide reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and the terms and conditions of the federal award. Reporting on use of PRF funds is required to be reported through the Health Resources and Services Administration (HRSA) reporting portal. Questioned Costs: None Cause: The Organization does not have a formal policy or procedure in place to ensure that the terms and conditions of grant agreements are followed, including filing accurately with HRSA as to how the funds received were utilized. Effect: Period 2 funding received was reported to HRSA as having incurred allowable expenses. The Organization intended to report lost revenue, however due to the lack of internal controls over reporting, the Organization did not discover the error timely in order to resubmit the report within the Period 2 reporting period. Audit procedures identified that there were not adequate allowable expenditures to utilize the funds for Period 2 in full. It has been determined that, in the next period the reporting portal is open, even with intended corrections to the reporting, the Organization will not have adequate lost revenue nor allowable expenditures to expend federal awards received in the amount of $202,268. The schedule of expenditures of federal awards has been updated to reflect this. Recommendation: We recommend the Organization establish internal controls to ensure compliance with the terms and conditions of federal awards and grant agreements. The Organization should review and verify all documentation pertaining to any PRF grant funding received prior to the next available reporting period to make proper modifications such that any prior periods filed properly report the intended lost revenue or allowable expenses and return funding, if deemed necessary, for amounts in which the Organization has not complied with the terms and conditions of the grant. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.

FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAMS AUDIT Finding 2022-002: A.L. #93.498 COVID-19 Provider Relief Fund (PRF) and American Rescue Plan (ARP) Rural Distribution, U.S Department of Health and Human Services Finding Type: Material weakness/noncompliance Repeat Finding: No Condition: Northeastern Center did not have adequate controls over PRF Period 2 funding and did not comply with federal requirements for reporting on use of funds. Criteria: The Organization must establish and maintain effective internal control over federal awards that provide reasonable assurance that the Organization is managing the federal awards in compliance with federal statutes, regulations and the terms and conditions of the federal award. Reporting on use of PRF funds is required to be reported through the Health Resources and Services Administration (HRSA) reporting portal. Questioned Costs: None Cause: The Organization does not have a formal policy or procedure in place to ensure that the terms and conditions of grant agreements are followed, including filing accurately with HRSA as to how the funds received were utilized. Effect: Period 2 funding received was reported to HRSA as having incurred allowable expenses. The Organization intended to report lost revenue, however due to the lack of internal controls over reporting, the Organization did not discover the error timely in order to resubmit the report within the Period 2 reporting period. Audit procedures identified that there were not adequate allowable expenditures to utilize the funds for Period 2 in full. It has been determined that, in the next period the reporting portal is open, even with intended corrections to the reporting, the Organization will not have adequate lost revenue nor allowable expenditures to expend federal awards received in the amount of $202,268. The schedule of expenditures of federal awards has been updated to reflect this. Recommendation: We recommend the Organization establish internal controls to ensure compliance with the terms and conditions of federal awards and grant agreements. The Organization should review and verify all documentation pertaining to any PRF grant funding received prior to the next available reporting period to make proper modifications such that any prior periods filed properly report the intended lost revenue or allowable expenses and return funding, if deemed necessary, for amounts in which the Organization has not complied with the terms and conditions of the grant. Views of Responsible Officials and Planned Corrective Actions: Management agrees with the finding and has prepared a corrective action plan.