FAC Explorer

Audit 309096

FY End
2023-09-30
Total Expended
$903,089
Findings
4
Programs
5
Organization: Choice Regional Health Network (WA)
Year: 2023 Accepted: 2024-06-18
Auditor: Clark Nuber P S

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
401074 2023-002 Material Weakness Yes B
401075 2023-002 Material Weakness Yes B
977516 2023-002 Material Weakness Yes B
977517 2023-002 Material Weakness Yes B

Programs

ALN Program Spent Major Findings
93.011 National Organizations of State and Local Officials $325,920 Yes 1
93.912 Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement $280,708 Yes 1
93.391 Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises $152,242 - 0
93.322 Csels Partnership: Strengthening Public Health Laboratories $112,073 - 0
93.387 National and State Tobacco Control Program (b) $32,146 - 0

Contacts

Name Title Type
JFN5DFREKVN1 Jp Anderson Auditee
3605397576 Kelly Rancourt Auditor
No contacts on file

Notes to SEFA

Title: Note 1 - Basis of Presentation Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal grant activity of CHOICE Regional Health Network and Subsidiary (collectively, the Organization) under programs of the federal government for the year ended September 30, 2023. The information in this schedule is presented in accordance with the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the Organization, it is not intended to and does not present the financial position, changes in net assets or cash flows of the Organization.
Title: Note 2 - Summary of Significant Accounting Policies Accounting Policies: Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Pass-through entity identifying numbers are presented where available. De Minimis Rate Used: Y Rate Explanation: The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, as applicable, wherein certain types of expenditures are not allowable or are limited as to reimbursement. The Organization has elected to use the 10-percent de minimis indirect cost rate allowed under the Uniform Guidance. Pass-through entity identifying numbers are presented where available.

Finding Details

Finding 2023-002
Finding 2023-002 Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials; Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Assistance Listing Number: 93.011; 93.912 Award Numbers: 1 G32HS42592-01-00; 4 GA1RH39546-01-07 Award Period: July 31, 2021 - July 31, 2023; September 1, 2020 - August 31, 2024 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.430(i)(1)(iii) (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted 17 instances in which the amount allocated to the award was adjusted up or down based on a standard 86.67-hour period instead of the true calculated percentage. The adjustment was not applied equitably to all hours during the period, but only to the program with the largest total hours for the period. This resulted in five instances of overcharge to the award and 12 instances of undercharge to the award. Questioned Costs $265 Cause Due to a systematic error in the payroll system, the adjustments to employee hours were not adjusted equitably to all payroll hours, but instead applied to the program with the largest amount of hours. This resulted in systematic errors in the allocation of payroll compared the true proportional benefit received by each award with an undercharge in some instances and an overcharge in other instances compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to ensure proper payroll system design and to review allocated costs for accuracy. Repeat Finding Yes. 2022-04 Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are properly calculated and allocated in accordance with 2 CFR 200.430(i)(1)(iii). Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Finding 2023-002
Finding 2023-002 Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials; Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Assistance Listing Number: 93.011; 93.912 Award Numbers: 1 G32HS42592-01-00; 4 GA1RH39546-01-07 Award Period: July 31, 2021 - July 31, 2023; September 1, 2020 - August 31, 2024 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.430(i)(1)(iii) (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted 17 instances in which the amount allocated to the award was adjusted up or down based on a standard 86.67-hour period instead of the true calculated percentage. The adjustment was not applied equitably to all hours during the period, but only to the program with the largest total hours for the period. This resulted in five instances of overcharge to the award and 12 instances of undercharge to the award. Questioned Costs $265 Cause Due to a systematic error in the payroll system, the adjustments to employee hours were not adjusted equitably to all payroll hours, but instead applied to the program with the largest amount of hours. This resulted in systematic errors in the allocation of payroll compared the true proportional benefit received by each award with an undercharge in some instances and an overcharge in other instances compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to ensure proper payroll system design and to review allocated costs for accuracy. Repeat Finding Yes. 2022-04 Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are properly calculated and allocated in accordance with 2 CFR 200.430(i)(1)(iii). Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Finding 2023-002
Finding 2023-002 Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials; Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Assistance Listing Number: 93.011; 93.912 Award Numbers: 1 G32HS42592-01-00; 4 GA1RH39546-01-07 Award Period: July 31, 2021 - July 31, 2023; September 1, 2020 - August 31, 2024 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.430(i)(1)(iii) (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted 17 instances in which the amount allocated to the award was adjusted up or down based on a standard 86.67-hour period instead of the true calculated percentage. The adjustment was not applied equitably to all hours during the period, but only to the program with the largest total hours for the period. This resulted in five instances of overcharge to the award and 12 instances of undercharge to the award. Questioned Costs $265 Cause Due to a systematic error in the payroll system, the adjustments to employee hours were not adjusted equitably to all payroll hours, but instead applied to the program with the largest amount of hours. This resulted in systematic errors in the allocation of payroll compared the true proportional benefit received by each award with an undercharge in some instances and an overcharge in other instances compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to ensure proper payroll system design and to review allocated costs for accuracy. Repeat Finding Yes. 2022-04 Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are properly calculated and allocated in accordance with 2 CFR 200.430(i)(1)(iii). Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.
Finding 2023-002
Finding 2023-002 Material weakness in internal controls over compliance and instances of noncompliance related to allowable costs. Federal Agency: Department of Health and Human Services Program Title: National Organizations of State and Local Officials; Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement Assistance Listing Number: 93.011; 93.912 Award Numbers: 1 G32HS42592-01-00; 4 GA1RH39546-01-07 Award Period: July 31, 2021 - July 31, 2023; September 1, 2020 - August 31, 2024 Criteria 2 U.S. Code of Federal Regulations (CFR) 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) Subpart E section 2 CFR 200.430(i)(1)(iii) (as codified by the Department of Health and Human Services [DHHS] in 45 CFR 75) requires direct costs be allocated based on the proportional benefit received by each award. Condition/Context for Evaluation In a population of 25 payroll costs, we noted 17 instances in which the amount allocated to the award was adjusted up or down based on a standard 86.67-hour period instead of the true calculated percentage. The adjustment was not applied equitably to all hours during the period, but only to the program with the largest total hours for the period. This resulted in five instances of overcharge to the award and 12 instances of undercharge to the award. Questioned Costs $265 Cause Due to a systematic error in the payroll system, the adjustments to employee hours were not adjusted equitably to all payroll hours, but instead applied to the program with the largest amount of hours. This resulted in systematic errors in the allocation of payroll compared the true proportional benefit received by each award with an undercharge in some instances and an overcharge in other instances compared to what the actual allocation percentage would have charged. Effect or Potential Effect The Organization did not have sufficient internal controls in place to ensure proper payroll system design and to review allocated costs for accuracy. Repeat Finding Yes. 2022-04 Recommendation We recommend that the Organization implement internal controls over payroll costs charged to awards to ensure they are properly calculated and allocated in accordance with 2 CFR 200.430(i)(1)(iii). Views of Responsible Officials of Auditee Management concurs with the finding and has provided the accompanying corrective action plan.