Audit 318493

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-004 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2023 were not prepared or submitted to I.H.S. Context: All four quarterly SF-425 reports for the Indian Self-Determination program. Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with the reconciliation of its financials so that it could properly produce the SF-425 reports. However key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials rendering CBNHC to be unable to produce the SF-425 report on time.

2023-005 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

2023-006 — Procurement Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000. Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor. Context: Two of 35 nonpayroll transactions tested. Questioned Costs: None. Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels. Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.

2023-007 — Allowable Costs Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: CBNHC was awarded funding under its Master Contract and AFA under the State and Local Fiscal Recovery Funds (SLFRF). One allowable use of funds under the SLFRF Final Rule is for premium pay to essential workers. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic. The SLFRF Final Rule defines eligible workers as ‘‘those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each government may designate as critical to protect the health and wellbeing of residents”. Condition: In November 2022, all employees and Board members of CBNHC received premium pay based on months of service during fiscal year 2022. However, Board members do not appear to meet the definition of an “essential worker” as defined under the SLFRF Final Rule. Context: N/A Questioned Costs: $10,416. Cause: CBNHC Board of Directors approved premium pay to all employees, IPA/MOA contractor employees, and Board members regardless of whether each position was needed to maintain continuity of operations. Effect: CBNHC is not in compliance with the SLFRF Final Rule related to this funding under the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should evaluate the SLFRF Final Rule and determine whether Board members meet the definition of an “essential worker”. CBNHC should consider requesting reimbursement of these funds from Board members if it is determined that Board members do not meet the definition of an “essential worker” under the SLFRF Final Rule. Management’s Response: CBNHC acknowledges that its Board members did not meet the definition of an “essential worker” and therefore, is not in compliance with the SLFRF Final Rule related to the relief funding under the Indian Self-Determination program.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-004 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2023 were not prepared or submitted to I.H.S. Context: All four quarterly SF-425 reports for the Indian Self-Determination program. Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with the reconciliation of its financials so that it could properly produce the SF-425 reports. However key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials rendering CBNHC to be unable to produce the SF-425 report on time.

2023-005 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

2023-006 — Procurement Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000. Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor. Context: Two of 35 nonpayroll transactions tested. Questioned Costs: None. Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels. Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.

2023-007 — Allowable Costs Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: CBNHC was awarded funding under its Master Contract and AFA under the State and Local Fiscal Recovery Funds (SLFRF). One allowable use of funds under the SLFRF Final Rule is for premium pay to essential workers. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic. The SLFRF Final Rule defines eligible workers as ‘‘those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each government may designate as critical to protect the health and wellbeing of residents”. Condition: In November 2022, all employees and Board members of CBNHC received premium pay based on months of service during fiscal year 2022. However, Board members do not appear to meet the definition of an “essential worker” as defined under the SLFRF Final Rule. Context: N/A Questioned Costs: $10,416. Cause: CBNHC Board of Directors approved premium pay to all employees, IPA/MOA contractor employees, and Board members regardless of whether each position was needed to maintain continuity of operations. Effect: CBNHC is not in compliance with the SLFRF Final Rule related to this funding under the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should evaluate the SLFRF Final Rule and determine whether Board members meet the definition of an “essential worker”. CBNHC should consider requesting reimbursement of these funds from Board members if it is determined that Board members do not meet the definition of an “essential worker” under the SLFRF Final Rule. Management’s Response: CBNHC acknowledges that its Board members did not meet the definition of an “essential worker” and therefore, is not in compliance with the SLFRF Final Rule related to the relief funding under the Indian Self-Determination program.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-004 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2023 were not prepared or submitted to I.H.S. Context: All four quarterly SF-425 reports for the Indian Self-Determination program. Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with the reconciliation of its financials so that it could properly produce the SF-425 reports. However key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials rendering CBNHC to be unable to produce the SF-425 report on time.

2023-005 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

2023-006 — Procurement Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000. Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor. Context: Two of 35 nonpayroll transactions tested. Questioned Costs: None. Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels. Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.

2023-007 — Allowable Costs Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: CBNHC was awarded funding under its Master Contract and AFA under the State and Local Fiscal Recovery Funds (SLFRF). One allowable use of funds under the SLFRF Final Rule is for premium pay to essential workers. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic. The SLFRF Final Rule defines eligible workers as ‘‘those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each government may designate as critical to protect the health and wellbeing of residents”. Condition: In November 2022, all employees and Board members of CBNHC received premium pay based on months of service during fiscal year 2022. However, Board members do not appear to meet the definition of an “essential worker” as defined under the SLFRF Final Rule. Context: N/A Questioned Costs: $10,416. Cause: CBNHC Board of Directors approved premium pay to all employees, IPA/MOA contractor employees, and Board members regardless of whether each position was needed to maintain continuity of operations. Effect: CBNHC is not in compliance with the SLFRF Final Rule related to this funding under the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should evaluate the SLFRF Final Rule and determine whether Board members meet the definition of an “essential worker”. CBNHC should consider requesting reimbursement of these funds from Board members if it is determined that Board members do not meet the definition of an “essential worker” under the SLFRF Final Rule. Management’s Response: CBNHC acknowledges that its Board members did not meet the definition of an “essential worker” and therefore, is not in compliance with the SLFRF Final Rule related to the relief funding under the Indian Self-Determination program.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-003 — Late Audit Report Federal program information: Funding agency: All Title: All ALN: All Award period: Various Criteria: According to 2 CFR Part 200.512, the annual single audit must be completed and the data collection form and reporting package must be submitted within the earlier of 30 calendar days after receipt of the auditor's report or nine months after the end of the audit period (June 30, 2024). Condition: CBNHC’s fiscal year 2023 single audit reporting package was not submitted by the due date of June 30, 2024. Context: N/A Questioned Costs: None Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which caused significant delays in completion of the year-end reconciliations of the financial statements and the schedule of expenditures of federal awards. Effect: CBNHC was unable to completely reconcile certain general ledger accounts timely, which resulted in significant audit adjustments. As a result, the audit started late and was not issued within the reporting deadline. Auditor’s Recommendations: The Accounting department should be analyzed, and functions/duties re-assigned and/or additional personnel hired to ensure that monthly and annual account reconciliations are performed timely to ensure that the data collection form and reporting package are submitted by the due date. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with its financial audits for fiscal years 2021 and 2022. However, key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials.

2023-004 — Reporting Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: The Annual Funding Agreement (AFA) with I.H.S. requires CBNHC to submit Federal Financial Reports (SF-425) within 30 days after the close of each quarter, except for the fourth quarter, which will be submitted within 90 days after the close of the federal fiscal year. Additionally, a brief annual narrative report will also be submitted within 90 days after the close of the federal fiscal year. Condition: The quarterly SF-425 reports for all quarters of fiscal year 2023 were not prepared or submitted to I.H.S. Context: All four quarterly SF-425 reports for the Indian Self-Determination program. Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic, which impacted the preparation and submission of required reports. Effect: CBNHC is not in compliance with reporting requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. In the first quarter of fiscal year 2023, CBNHC made progress towards catching up with the reconciliation of its financials so that it could properly produce the SF-425 reports. However key personnel were administratively unavailable during the last quarter of 2023, causing CBNHC to fall further behind in its financials rendering CBNHC to be unable to produce the SF-425 report on time.

2023-005 — Equipment and Real Property Management Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: 2 CFR section 200.313 requires that (1) equipment be used in the program or project for which it was acquired as long as needed, (2) property records must be maintained that include a description of the property, a serial number or other identification number, the source of funding for the property (including the federal award identification number), who holds title, the acquisition date, and cost of the property, and (3) a physical inventory of the property must be taken and the results reconciled with the property records at least once every two years. Additionally, CBNHC’s Financial Policies and Procedures require a physical inventory of property be taken annually and reconciled to the general ledger. Condition: CBNHC has not completed a physical inventory of property and equipment in the last two years. Context: N/A Questioned Costs: None. Cause: CBNHC was significantly impacted by the COVID-19 pandemic. Additionally, CBNHC is not implementing their Financial Policies and Procedures to ensure that a physical inventory has been taken annually and reconciled to the general ledger. Effect: CBNHC is not in compliance with equipment and real property management requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures and plan a physical inventory of its property as quickly as possible. The results of the physical inventory should be reconciled to the general ledger. Management’s Response: CBNHC did not have the adequate financial or administrative staff to perform a physical inventory and therefore has not been keeping with its Financial Policies and Procedures and performing an annual physical inventory.

2023-006 — Procurement Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: Non-federal entities other than states must follow the procurement standards set out at 2 CFR sections 200.318 through 200.326. They must use their own documented procurement procedures, which reflect applicable state and local laws and regulations, provided that the procurements conform to applicable federal statutes and the procurement requirements identified in 2 CFR Part 200. This includes oversight of contractors’ performance, maintaining written standards of conduct for employees involved in contracting, awarding contracts only to responsible contractors, and maintaining records to document history of procurements. Further, according to the CBNHC Finance Policies and Procedures, the Board of Directors shall approve all purchases over $5,000. Condition: For one vendor paid over $5,000 during fiscal year 2023, there was no evidence that selection and use of this vendor was approved by the Board of Directors. For one additional contractor, CBNHC did not have an active contract in place with the contractor. Context: Two of 35 nonpayroll transactions tested. Questioned Costs: None. Cause: CBNHC is not implementing their Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved according to purchase authority levels. Effect: CBNHC is not in compliance with procurement requirements for the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should implement its Financial Policies and Procedures to ensure that the selection and use of all vendors and contractors are properly documented and approved. Management’s Response: In fiscal year 2023, CBNHC experienced significant disruption in its administrative operations caused by political struggles over its rightful governing body. During this period, two key leadership members were administratively unavailable to support the proper procurement of vendor contract renewals. The purchases were made outside the CBNHC procurement policies unbeknownst to CBNHC leadership.

2023-007 — Allowable Costs Federal/state program information: Funding agency: U.S. Department of Health and Human Services Title: Indian Self-Determination ALN: 93.441 Award period: 10/1/2022 – 9/30/2023 Criteria: CBNHC was awarded funding under its Master Contract and AFA under the State and Local Fiscal Recovery Funds (SLFRF). One allowable use of funds under the SLFRF Final Rule is for premium pay to essential workers. Premium pay is designed to compensate workers that, by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic. The SLFRF Final Rule defines eligible workers as ‘‘those workers needed to maintain continuity of operations of essential critical infrastructure sectors and additional sectors as each government may designate as critical to protect the health and wellbeing of residents”. Condition: In November 2022, all employees and Board members of CBNHC received premium pay based on months of service during fiscal year 2022. However, Board members do not appear to meet the definition of an “essential worker” as defined under the SLFRF Final Rule. Context: N/A Questioned Costs: $10,416. Cause: CBNHC Board of Directors approved premium pay to all employees, IPA/MOA contractor employees, and Board members regardless of whether each position was needed to maintain continuity of operations. Effect: CBNHC is not in compliance with the SLFRF Final Rule related to this funding under the Indian Self-Determination program. Auditor’s Recommendations: CBNHC should evaluate the SLFRF Final Rule and determine whether Board members meet the definition of an “essential worker”. CBNHC should consider requesting reimbursement of these funds from Board members if it is determined that Board members do not meet the definition of an “essential worker” under the SLFRF Final Rule. Management’s Response: CBNHC acknowledges that its Board members did not meet the definition of an “essential worker” and therefore, is not in compliance with the SLFRF Final Rule related to the relief funding under the Indian Self-Determination program.