Audit 323092

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of allowable costs. Condition: During our testing, we noted one unallowable expenditure being charged back to the grant. Questioned costs: None. Context: During our testing of allowable costs, it was noted that the initial online order notification price was charged to the grant rather than the price on the actual receipt issued after the order was filled. Cause: Administrative error in charging unallowable costs to federal grants. Effect: Unallowable expenses were charged to the grant. Recommendation: We recommend management implement procedures to ensure that unallowable costs are not charged to federal grants. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Allowable Costs • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Expenses should be charged to each grant based on actual costs or an approved allocation plan. Condition: The Organization allocated a flat 30% of payroll as payroll benefits. There was no internally approved allocation plan for payroll benefits. Questioned costs: $77,756 Context: All payroll benefits charged to the grant were allocated using a rate not formally approved through an internally approved allocation plan. $77,756 is the difference between actual payroll benefits that should have been charged to the grant and the actual amount allocated to the grant. Cause: Policies and procedures were not in place to properly allocate payroll benefits. Effect: The Organization improperly overcharged $77,756 to the grant. Recommendation: We recommend that the Organization implements policies and procedures to properly calculate and allocate payroll benefits. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Cash Management – Subrecipient Payments • Other Matters Criteria or specific requirement: 2 CFR section 200.305(b)(1) requires that an entity implement procedures to ensure that the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient be minimized. 2 CFR section 200.305 (b)(3) states the pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the request is believed to be improper. Condition: 2 out of 8 total billings sampled were not paid timely. Questioned costs: None. Context: During our testing of subrecipient payments, 2 out of the 8 billings sampled were not paid within 30 calendar days to the subrecipient after the billing was submitted for payment. Cause: Policies and procedures were not in place to ensure timely payments of subrecipient billings. Effect: Subrecipients received payments a significant amount of time after expenditures have been incurred. Recommendation: We recommend that the Organization implement policies and procedures to ensure subrecipients are paid within 30 days of when the billing is received. If the request is believed to be improper, support for the delay in payment should be maintained. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Procurement • Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of procurement. Condition: The Organization has a procurement policy but the policy was not followed on all procurement transactions and documentation was not maintained of the procedures performed and approvals received for the procurement. Questioned costs: None. Context: During our testing, we noted on 2 out of 3 of the samples tested there was no documentation of procurement procedures and on 3 out of 3 of the samples tested there was no documentation of review and approval. Cause: Policies and procedures are not in place to ensure proper procurement is being followed. Effect: Incorrect procurement and documentation not maintained. Recommendation: We recommend that the Organization’s procurement policy is followed and that procurement procedures are documented, reviewed and approved. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Subrecipient Monitoring • Other Matters Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Organization did not have policies and procedures in place to ensure all the requirements of subrecipient monitoring were being performed. Questioned costs: None. Context: Of the five subrecipients selected for testing (there were seven in the population), we noted that none of them had proper monitoring in place. Cause: Policies and procedures were not in place to provide adequate subrecipient monitoring. Effect: The Organization could pass through federal funding to subrecipients who are not responsible or capable recipients of the funds. Funding could be used by the subrecipients in ways that are incompatible with program goals and compliance requirements. Recommendation: We recommend that the Organization implements policies and procedures to perform subrecipient monitoring and that monitoring is formally documented and approved. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of allowable costs. Condition: During our testing, we noted one unallowable expenditure being charged back to the grant. Questioned costs: None. Context: During our testing of allowable costs, it was noted that the initial online order notification price was charged to the grant rather than the price on the actual receipt issued after the order was filled. Cause: Administrative error in charging unallowable costs to federal grants. Effect: Unallowable expenses were charged to the grant. Recommendation: We recommend management implement procedures to ensure that unallowable costs are not charged to federal grants. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Allowable Costs • Material Noncompliance (Modified Opinion) Criteria or specific requirement: Expenses should be charged to each grant based on actual costs or an approved allocation plan. Condition: The Organization allocated a flat 30% of payroll as payroll benefits. There was no internally approved allocation plan for payroll benefits. Questioned costs: $77,756 Context: All payroll benefits charged to the grant were allocated using a rate not formally approved through an internally approved allocation plan. $77,756 is the difference between actual payroll benefits that should have been charged to the grant and the actual amount allocated to the grant. Cause: Policies and procedures were not in place to properly allocate payroll benefits. Effect: The Organization improperly overcharged $77,756 to the grant. Recommendation: We recommend that the Organization implements policies and procedures to properly calculate and allocate payroll benefits. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Cash Management – Subrecipient Payments • Other Matters Criteria or specific requirement: 2 CFR section 200.305(b)(1) requires that an entity implement procedures to ensure that the time elapsing between the transfer of federal funds to the subrecipient and the disbursement of such funds for program purposes by the subrecipient be minimized. 2 CFR section 200.305 (b)(3) states the pass-through entity must make payment within 30 calendar days after receipt of the billing, unless the request is believed to be improper. Condition: 2 out of 8 total billings sampled were not paid timely. Questioned costs: None. Context: During our testing of subrecipient payments, 2 out of the 8 billings sampled were not paid within 30 calendar days to the subrecipient after the billing was submitted for payment. Cause: Policies and procedures were not in place to ensure timely payments of subrecipient billings. Effect: Subrecipients received payments a significant amount of time after expenditures have been incurred. Recommendation: We recommend that the Organization implement policies and procedures to ensure subrecipients are paid within 30 days of when the billing is received. If the request is believed to be improper, support for the delay in payment should be maintained. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Procurement • Material Noncompliance (Modified Opinion) Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards requires compliance with the provisions of procurement. Condition: The Organization has a procurement policy but the policy was not followed on all procurement transactions and documentation was not maintained of the procedures performed and approvals received for the procurement. Questioned costs: None. Context: During our testing, we noted on 2 out of 3 of the samples tested there was no documentation of procurement procedures and on 3 out of 3 of the samples tested there was no documentation of review and approval. Cause: Policies and procedures are not in place to ensure proper procurement is being followed. Effect: Incorrect procurement and documentation not maintained. Recommendation: We recommend that the Organization’s procurement policy is followed and that procurement procedures are documented, reviewed and approved. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: The Department of Health and Human Services/Centers for Disease Control and Prevention Assistance Listing Number: 93.323 Federal Award Identification Number and Year: NU50CK000515 - 2021 Pass-Through Agency: State of Washington Department of Health Pass-Through Number: CBO28488-0 Award Period: July 1, 2023 through July 31, 2024 Type of Finding: • Material Weakness in Internal Control over Compliance – Subrecipient Monitoring • Other Matters Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that a non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Condition: The Organization did not have policies and procedures in place to ensure all the requirements of subrecipient monitoring were being performed. Questioned costs: None. Context: Of the five subrecipients selected for testing (there were seven in the population), we noted that none of them had proper monitoring in place. Cause: Policies and procedures were not in place to provide adequate subrecipient monitoring. Effect: The Organization could pass through federal funding to subrecipients who are not responsible or capable recipients of the funds. Funding could be used by the subrecipients in ways that are incompatible with program goals and compliance requirements. Recommendation: We recommend that the Organization implements policies and procedures to perform subrecipient monitoring and that monitoring is formally documented and approved. Views of responsible officials: There is no disagreement with the audit finding.