Audit 307138

Federal Program: WIC Special Supplemental Food Program for Women, Infants, and Children Federal Assistance Listing Number: 10.557 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS001096400022 Criteria: The Period of Performance requirement for the WIC program mandates that all charges to the grant during a contract term must be in the possession of the District and billed to the state agency no later than ninety calendar days following the end of the contract term. Further, because the District operates this grant on the accrual basis, Texas WIC Health and Human Services “Reimbursement of Allowable Expenses” policy (effective April 1, 2019, Policy No. AC:02.0) requires accrual basis expenditures to be paid no later than the tenth day after the receipt of payment from the state agency. Condition: Certain checks are prepared , dated, and signed for grant reimbursement purposes but are stored in the safe until work is completed. These transactions are reported on the request for reimbursement as paid. This delay in processing payments stems from the practice of withholding checks until work is finalized, leading to potential discrepancies in recording outstanding checks and delaying the payment of accrued expenditures related to the grant. Cause: Due to the relatively short timeframe to identify and spend supplemental funds after notification that supplemental funds are available, certain projects are identified, but not completed or received prior to the prescribed deadlines; however, checks are prepared and expenditures are accrued to be able to request for reimbursement on the supplemental vouchers. Effect: Six accrued expenditures were not paid by the prescribed deadline. This noncompliance with the period of performance requirements results in overcharging the grant for expenditures outside the grant period, potentially leading to misallocation of funds and inaccurate financial reporting. Questioned Costs: The questioned costs amount to $19,111.80, representing the total value of transactions not paid by the prescribed deadline. Recommendation: Implement a revised process where checks are only prepared, dated, signed, and mailed to vendors after work is completed or items are received, ensuring compliance with the period of performance requirements. Enhance internal controls by establishing procedures to monitor and ensure timely payment of accrued expenditures, such as regular reconciliation of outstanding checks and communication with vendors on performance requirements. Additionally, consider streamlining communication and coordination among relevant departments to expedite the payment process while maintaining compliance with grant regulations. Management’s Views and Corrective Action Plan: The Northeast Texas Public Health District (NET Health) will take steps to ensure overall effective grant monitoring and to increase communications between NET Health Grant Managers and the Chief Financial Officer and Chief Executive Officer. The NET Health Leadership Team will discuss any issues during our weekly Leadership Team meetings to ensure compliance. These weekly meetings will address costs expended within the grant parameters and ensure grant funds will be more evenly expended during the year as appropriate. NET Heatlh will continue to develop effective methods of grant oversight as it finds weaknesses in its processes. To ensure compliance with the period of performance requirements, NET Health will change its processes effectively immediately. Going forward checks will only be prepared, dated, signed, and mailed to vendors after work is completed or items are received. There will be enhanced internal controls by establishing procedures to monitor and ensure timely payment of accrued expenditures, such as regularly accounting for any outstanding checks and actively communicating with vendors on performance requirements. In addition, we will enhance communication and coordination among relevant departments to expedite the payment process while maintaining compliance with grant regulations. George T. Roberts, CEO, and Lawanda Owens, CFO, are the persons responsible for this action plan going forward. NET Health is expected to have this action plan implemented by May 1, 2024.

Federal Program: WIC Special Supplemental Food Program for Women, Infants, and Children Federal Assistance Listing Number: 10.557 Pass-Through Agency: Texas Health and Human Services Commission Pass-Through Grantor Number: HHS001096400022 Criteria: The Period of Performance requirement for the WIC program mandates that all charges to the grant during a contract term must be in the possession of the District and billed to the state agency no later than ninety calendar days following the end of the contract term. Further, because the District operates this grant on the accrual basis, Texas WIC Health and Human Services “Reimbursement of Allowable Expenses” policy (effective April 1, 2019, Policy No. AC:02.0) requires accrual basis expenditures to be paid no later than the tenth day after the receipt of payment from the state agency. Condition: Certain checks are prepared , dated, and signed for grant reimbursement purposes but are stored in the safe until work is completed. These transactions are reported on the request for reimbursement as paid. This delay in processing payments stems from the practice of withholding checks until work is finalized, leading to potential discrepancies in recording outstanding checks and delaying the payment of accrued expenditures related to the grant. Cause: Due to the relatively short timeframe to identify and spend supplemental funds after notification that supplemental funds are available, certain projects are identified, but not completed or received prior to the prescribed deadlines; however, checks are prepared and expenditures are accrued to be able to request for reimbursement on the supplemental vouchers. Effect: Six accrued expenditures were not paid by the prescribed deadline. This noncompliance with the period of performance requirements results in overcharging the grant for expenditures outside the grant period, potentially leading to misallocation of funds and inaccurate financial reporting. Questioned Costs: The questioned costs amount to $19,111.80, representing the total value of transactions not paid by the prescribed deadline. Recommendation: Implement a revised process where checks are only prepared, dated, signed, and mailed to vendors after work is completed or items are received, ensuring compliance with the period of performance requirements. Enhance internal controls by establishing procedures to monitor and ensure timely payment of accrued expenditures, such as regular reconciliation of outstanding checks and communication with vendors on performance requirements. Additionally, consider streamlining communication and coordination among relevant departments to expedite the payment process while maintaining compliance with grant regulations. Management’s Views and Corrective Action Plan: The Northeast Texas Public Health District (NET Health) will take steps to ensure overall effective grant monitoring and to increase communications between NET Health Grant Managers and the Chief Financial Officer and Chief Executive Officer. The NET Health Leadership Team will discuss any issues during our weekly Leadership Team meetings to ensure compliance. These weekly meetings will address costs expended within the grant parameters and ensure grant funds will be more evenly expended during the year as appropriate. NET Heatlh will continue to develop effective methods of grant oversight as it finds weaknesses in its processes. To ensure compliance with the period of performance requirements, NET Health will change its processes effectively immediately. Going forward checks will only be prepared, dated, signed, and mailed to vendors after work is completed or items are received. There will be enhanced internal controls by establishing procedures to monitor and ensure timely payment of accrued expenditures, such as regularly accounting for any outstanding checks and actively communicating with vendors on performance requirements. In addition, we will enhance communication and coordination among relevant departments to expedite the payment process while maintaining compliance with grant regulations. George T. Roberts, CEO, and Lawanda Owens, CFO, are the persons responsible for this action plan going forward. NET Health is expected to have this action plan implemented by May 1, 2024.