Audit 303244

2021-001 Completeness of funding on the schedule of expenditures of federal awards Federal Granting Agency: Center for Disease Control and Prevention Award Name: COVID-19 Community Testing Assistance Listing Number: 93.354 Assistance Listing Title: Public Health Crisis Response Awards Award Year: 9/10/2020 – 6/30/2021 Pass-through Entity: City of Philadelphia Department of Public Health Criteria Per OMB Guidance, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when the nonfederal entity has incurred the eligible expenditures. Federal awards expended in subsequent fiscal years are to be recorded on the nonfederal entity’s SEFA in those subsequent years. Condition During the 2023 Uniform Guidance audit, we noted that there were $2.3 million of funds from this program that were not appropriately recorded in the 2021 SEFA. On the 2021 SEFA, management did not record any eligible expenditures for this program as management was unaware that the pass-through funding originated from federal sources. In addition, effort certification was also not performed timely for workers assigned on this grant, as this is a federal requirement and CHOP’s policy. Once management identified that this program was federally funded, effort was certified retroactively. Cause The cause of this finding was due to the omission of key data points within the contract identifying the funding source as federal and lack of follow-up with the Sponsor for clarification specific to the contract’s subrecipient requirements. Effect Federal funds related to program 93.354 of $2.3 million were incorrectly excluded from the 2021 SEFA. Had this been recorded correctly, this program would have been tested as a major program in 2021 for the City of Philadelphia. As such, when the significant deficiency over compliance was identified, testing was performed for this program in 2023 and the 2021 SEFA was updated. This required the reports for the 2021 Report of Independent Auditors on Compliance for Each Major Program and the Internal Control Over Compliance Required by Uniform Guidance to be revised. Subsequently, the 2021 reporting package was re-submitted to the Federal Audit Clearinghouse. Additionally, CHOP utilizes a worker time and effort reporting system where reports are generated quarterly to review salary allocations to the grant for accuracy based on the effort devoted to the functional and programmatic activities. For 17 of the 25 effort reports selected for compensation testing in FY 2023, the effort reports were not certified within 90 days of management’s notification of the federally sourced funding, in accordance with CHOP policy. The impact of untimely effort report review could lead to incorrect expenses charged to a grant. Questioned Costs None. Recommendation Management should enhance the controls in place to ensure contracts are complete and contain appropriate data elements related to funding sources for transparency and accurate reporting requirements related to all pass-through programs, to ensure expenditures are reported on the SEFA and are reported in the appropriate period and to allow for timely effort reporting.

2021-001 Completeness of funding on the schedule of expenditures of federal awards Federal Granting Agency: Center for Disease Control and Prevention Award Name: COVID-19 Community Testing Assistance Listing Number: 93.354 Assistance Listing Title: Public Health Crisis Response Awards Award Year: 9/10/2020 – 6/30/2021 Pass-through Entity: City of Philadelphia Department of Public Health Criteria Per OMB Guidance, nonfederal entities must record expenditures on the Schedule of Expenditures of Federal Awards (SEFA) when the nonfederal entity has incurred the eligible expenditures. Federal awards expended in subsequent fiscal years are to be recorded on the nonfederal entity’s SEFA in those subsequent years. Condition During the 2023 Uniform Guidance audit, we noted that there were $2.3 million of funds from this program that were not appropriately recorded in the 2021 SEFA. On the 2021 SEFA, management did not record any eligible expenditures for this program as management was unaware that the pass-through funding originated from federal sources. In addition, effort certification was also not performed timely for workers assigned on this grant, as this is a federal requirement and CHOP’s policy. Once management identified that this program was federally funded, effort was certified retroactively. Cause The cause of this finding was due to the omission of key data points within the contract identifying the funding source as federal and lack of follow-up with the Sponsor for clarification specific to the contract’s subrecipient requirements. Effect Federal funds related to program 93.354 of $2.3 million were incorrectly excluded from the 2021 SEFA. Had this been recorded correctly, this program would have been tested as a major program in 2021 for the City of Philadelphia. As such, when the significant deficiency over compliance was identified, testing was performed for this program in 2023 and the 2021 SEFA was updated. This required the reports for the 2021 Report of Independent Auditors on Compliance for Each Major Program and the Internal Control Over Compliance Required by Uniform Guidance to be revised. Subsequently, the 2021 reporting package was re-submitted to the Federal Audit Clearinghouse. Additionally, CHOP utilizes a worker time and effort reporting system where reports are generated quarterly to review salary allocations to the grant for accuracy based on the effort devoted to the functional and programmatic activities. For 17 of the 25 effort reports selected for compensation testing in FY 2023, the effort reports were not certified within 90 days of management’s notification of the federally sourced funding, in accordance with CHOP policy. The impact of untimely effort report review could lead to incorrect expenses charged to a grant. Questioned Costs None. Recommendation Management should enhance the controls in place to ensure contracts are complete and contain appropriate data elements related to funding sources for transparency and accurate reporting requirements related to all pass-through programs, to ensure expenditures are reported on the SEFA and are reported in the appropriate period and to allow for timely effort reporting.