FAC Explorer

Audit 327329

FY End
2023-12-31
Total Expended
$15.73M
Findings
8
Programs
31
Organization: Inova Health System (VA)
Year: 2023 Accepted: 2024-11-05
Auditor: Ernst & Young LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
504714 2023-001 Material Weakness Yes E
504715 2023-002 Material Weakness - CJL
504716 2023-002 Material Weakness - CJL
504717 2023-003 Material Weakness - I
1081156 2023-001 Material Weakness Yes E
1081157 2023-002 Material Weakness - CJL
1081158 2023-002 Material Weakness - CJL
1081159 2023-003 Material Weakness - I

Programs

ALN Program Spent Major Findings
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $3.90M Yes 2
12.750 Uniformed Services University Medical Research Projects $3.30M - 0
93.917 Hiv Care Formula Grants $2.54M Yes 2
93.498 Provider Relief Fund and American Rescue Plan (arp) Rural Distribution $808,634 Yes 0
93.153 Coordinated Services and Access to Research for Women, Infants, Children, and Youth $688,909 - 0
93.939 Hiv Prevention Activities Non-Governmental Organization Based $620,250 - 0
93.350 National Center for Advancing Translational Sciences $395,461 - 0
20.RD Nhtsa Discretionary Safety Grants and Cooperative Agreements $348,454 - 0
93.RD Population Health Research Support $206,736 - 0
93.914 Hiv Emergency Relief Project Grants $203,144 - 0
93.767 Children's Health Insurance Program $167,129 - 0
93.145 Aids Education and Training Centers $163,492 - 0
16.575 Crime Victim Assistance $109,515 - 0
93.353 21st Century Cures Act - Beau Biden Cancer Moonshot $99,481 - 0
93.397 Cancer Centers Support Grants $85,635 - 0
12.420 Military Medical Research and Development $64,969 - 0
93.RD Nhlbi Pulmonary Vascular Program $63,860 - 0
93.846 Arthritis, Musculoskeletal and Skin Diseases Research $50,621 - 0
93.RD Nhlbi Graft Sample and Data Collection Project $35,272 - 0
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (elc) $27,056 - 0
93.866 Aging Research $21,808 - 0
93.121 Oral Diseases and Disorders Research $14,209 - 0
93.865 Child Health and Human Development Extramural Research $9,722 - 0
93.940 Hiv Prevention Activities Health Department Based $8,652 - 0
21.027 Coronavirus State and Local Fiscal Recovery Funds $6,073 - 0
93.RD Support Services for the Lampoon Protocol Ide Enrollment Sites $5,716 - 0
93.103 Food and Drug Administration Research $1,199 - 0
93.837 Cardiovascular Diseases Research $687 - 0
93.838 Lung Diseases Research $549 - 0
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $528 - 0
93.RD Tactile and Ultrasound Imaging Fusion for Functional Assessment of the Female Pelvic Floor $157 - 0

Contacts

Name Title Type
WQCEDBM284L6 Christopher Smith Auditee
7034349230 Amber Brosius Auditor
No contacts on file

Notes to SEFA

Title: Basis of Presentation Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes all federal grant activity of the Inova Health System (“IHS” or “System”) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, IHS’s consolidated financial statements. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election, however, IHS did not make this election and uses a negotiated indirect cost rate in the accompanying Schedule. The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes all federal grant activity of the Inova Health System (“IHS” or “System”) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, IHS’s consolidated financial statements. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule during the reporting period. Actual results could differ from those estimates.
Title: Indirect Cost Rate Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes all federal grant activity of the Inova Health System (“IHS” or “System”) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, IHS’s consolidated financial statements. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election, however, IHS did not make this election and uses a negotiated indirect cost rate in the accompanying Schedule. Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election, however, IHS did not make this election and uses a negotiated indirect cost rate in the accompanying Schedule.
Title: COVID‑19 – Provider Relief Fund and American Rescue Plan (“ARP”) Rural Distribution Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes all federal grant activity of the Inova Health System (“IHS” or “System”) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, IHS’s consolidated financial statements. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election, however, IHS did not make this election and uses a negotiated indirect cost rate in the accompanying Schedule. In accordance with the U.S. Department of Health and Human Services’ requirements specific to Federal Assistance Listing Number 93.498, COVID 19 – Provider Relief Fund and American Rescue Plan (“ARP”) Rural Distribution, the amount presented on the accompanying Schedule for the year ended December 31, 2023 for Federal Assistance Listing No. 93.498 relates to (i) Provider Relief Fund (“PRF”) payments received from January 1, 2022 through December 31, 2022 and (ii) used for PRF-eligible activity from the period January 1, 2020 through December 31, 2023. This payment receipt period and activity period and the resulting amount presented on the accompanying Schedule for the year ended December 31, 2023, reconciles to the PRF information reported to the Health Resources and Services Administration (“HRSA”) for PRF Reporting Periods 5 and 6 as follows: See the Notes to the SEFA for chart/table IHS did not receive PRF payments during Reporting Period 6. Health and Human Services (“HHS”) has indicated the PRF Funds should be reported according to reporting requirements of the HRSA PRF Reporting Portal (the “Portal”). Payments from HHS for PRF are assigned to ‘Payment Received Periods’ (each, a Period) based upon the date each payment from the PRF was received. Each Period has a specified Period of Availability and timing of reporting requirements. Entities report into the Portal after each Period’s deadline to use the funds (i.e., after the end of the Period of Availability). The Schedule includes $808,634 of PRF Funds received from HHS between January 1, 2022 through December 31, 2022. The PRF-eligible expenses attributable to Coronavirus Disease 2019 (“COVID 19”) and lost revenues incurred by IHS during the period of availability for PRF Reporting Period 5 (January 1, 2020 through June 30, 2023) and PRF Reporting Period 6 (January 1, 2020 through December 31, 2023) are in excess of the general and targeted distributions received from January 1, 2022 through December 31, 2022 and, therefore, the amounts presented in the table above and on the accompanying Schedule are limited to the amount of such distributions.
Title: Noncash Federal Assistance Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards (the “Schedule”) includes all federal grant activity of the Inova Health System (“IHS” or “System”) including federal awards passed through other agencies. The accompanying Schedule is presented using the accrual basis of accounting and in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). In accordance with applicable requirements, certain programs may be presented in a fiscal period based on program-specific guidance (see Note 3). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in the preparation of, IHS’s consolidated financial statements. The preparation of the Schedule in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts in the Schedule during the reporting period. Actual results could differ from those estimates. De Minimis Rate Used: N Rate Explanation: Direct and indirect costs are charged to awards in accordance with cost principles contained in the United States Department of Health and Human Services Cost Principles for Hospitals at 45 CFR Part 75 Appendix IX for Uniform Guidance awards. Under these cost principles, certain types of expenditures are not allowable or are limited as to reimbursement. The Uniform Guidance provides for a 10% de minimis indirect cost rate election, however, IHS did not make this election and uses a negotiated indirect cost rate in the accompanying Schedule. IHS did not receive any noncash Federal assistance including donated personal protective equipment for the year ended December 31, 2023.

Finding Details

Finding 2023-001
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 Description: Timely Completion of the 24-month Eligibility Screening Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to “conduct and complete a full RWHAP B eligibility screening for all clients for any allowable Ryan White services prior to enrollment in the RWHAP B program and every 24-months thereafter by following the procedure from the department” (INORWB611-GY22 – Scope of Services – Section E, INORPS611-FY23 – Scope of Services – Section A, INORWB611-GY23 – Scope of Services – Section G1). The procedure from the department of the award requires the recipient to resubmit documents for residency, household income and proof of insurance before the 24-month eligibility period ends. Condition The System did not have appropriately designed internal controls in place to ensure that the documentation is obtained and reviewed to verify eligibility prior to the end of the 24-month period. Cause IJP has policies and procedures in place to obtain the eligibility documents from all clients and retain in their files. IJP’s policies and procedures specify that an eligibility worker will meet with each client for an initial screening to verify residency, income, insurance status, and HIV status. The eligibility worker is required to meet with the client to update the required eligibility screening and include the required documentation in the client file by the 24-month period end. Additionally, at each subsequent visit, the receptionist questions each client as to whether there have been any changes in their income or insurance status. If there are changes to the client’s eligibility status, another visit is scheduled with the eligibility worker. If there are delays with responses from the clients, the required documentation may not be obtained by the 24-month period end. Effect or potential effect Eligibility workers did not obtain and/or retain the required documentation related to the 24-month eligibility screening for certain clients before the required date. Based on the terms and conditions of the pass-through agreement with the Department, the clients whose eligibility was not completed by the deadline would not be considered eligible and should be discharged from the program. Questioned costs None. Identification of a repeat finding This is a repeat finding and relates to prior year finding 2022-002. Context During our audit, we selected a sample of 60 clients for testing and noted the following exceptions: • The 24-month eligibility screening was submitted to the Department after the eligibility expiration date for one client. For the exception identified, services were not provided prior to obtaining the full eligibility screening and therefore, there were no unallowable costs identified required for reimbursement from the Department. IJP has not completed a full review of all clients that could be impacted by the exception above. Recommendation Management should implement procedures to ensure completion of the eligibility screening prior to the end of the 24-month eligibility period. View of responsible officials Management concurs with the finding and will implement procedures to ensure that timely documentation is received with regard to eligibility.
Finding 2023-002
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Timely Application of Program Income Prior to Requesting Additional Cash Payments Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to follow Health Resources and Services Administration (HRSA) guidelines related to the program. HRSA develops multiple policies to help grant recipients and subrecipients understand and carry out legislation applicable to Ryan White programs. Per the Policy Clarification Notice included on the official HRSA website for Ryan White, “Under the uniform administrative requirements, to the extent available, recipients and subrecipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.” As such, program income must be used for the purpose and subject to the conditions of the Federal award. The requirements within the pass-through entity agreement with the Virginia Department of Health are consistent with those required by the original Federal awarding agency, the Department of Health and Human Services (HHS), HRSA. Per the frequently asked questions (FAQs) presented by HRSA’s HIV/AIDS Bureau (HAB) for Policy Clarification Notice (PCN) 15-03, Clarification Regarding the Ryan White HIV/AIDS Program and Program Income, and PCN 15-04, Utilization and Reporting of Pharmaceutical Rebates, released on March 21, 2016, program income is gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (or grant period). Program Income, inclusive of program income derived from the 340B Drug Pricing Program, includes the core medical and support services that HRSA considers allowable uses of Ryan White grant funds and the individuals eligible to receive those services. Unallowable uses include PrEP/nPEP materials, which are designed to promote or encourage, directly, intravenous drug use or sexual activity. Condition The System did not have appropriately designed internal controls in place to ensure that program income was not applied to offset expenditures prior to requesting additional cash reimbursements each month and/or quarter during the grant period. The cash management submissions and financial reporting for Assistance Listing – 93.918 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), including the quarterly Federal Financial Reports and annual SF-425 Federal Financial Reports, included the incorrect 340B program income during the period, which included unallowable uses of PrEP/nPEP materials. Cause IJP has policies and procedures in place to ensure program income was not applied to offset expenditures in its entirety prior to the end of the grant period. However, during the grant period, program income is not timely applied prior to cash reimbursement requests. IJP accumulates 340B program income on a monthly basis inclusive of the pharmacy income and related costs. Through management review of the costs associated within the 340B program, it was identified that PrEP/nPEP materials were inappropriately being included within program income. Effect or potential effect IJP did not have policies in place to ensure that program income was applied timely prior to requesting additional cash payments. As such, cash payments were being requested and reimbursed prior to application of program income. Program income was not appropriately being calculated by including unallowable uses. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context During our audit, we selected a sample of 4 months for testing, which identified that program income was not timely being applied to the cash reimbursement requests. Management does ensure that program income is applied prior to the end of the grant period. As of December 31, 2023, for Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B), the cumulative program income not applied prior to cash reimbursement was $109,593. This was not identified as questioned costs given this was subsequently applied by the end of the grant period. As of December 31, 2023, Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), for the cumulative program income not applied prior to cash reimbursement was $84,064. This was not identified as questioned costs given the program income was subsequently applied by the end of the grant period. As of December 31, 2023, the unallowable PrEP/nPEP materials caused an overstatement of 340B program income by $484,569. This amount was appropriately adjusted within the Schedule. As such, there were no identified question costs. Recommendation IJP’s existing policies and procedures are not designed to ensure the program income balance is spent timely. HRSA recommends that recipients and subrecipients strive to proactively secure and estimate the extent to which program income will be accrued. IJP should accrue for the anticipated program income to ensure it is disbursed timely. IJP should reconcile 304B expenditures to the 340B program income to ensure there are no additional expenditures reported over the amount for 340B program income allowable. View of responsible officials Management concurs with the finding and will implement procedures to ensure that the appropriate and timely application of program income.
Finding 2023-002
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Timely Application of Program Income Prior to Requesting Additional Cash Payments Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to follow Health Resources and Services Administration (HRSA) guidelines related to the program. HRSA develops multiple policies to help grant recipients and subrecipients understand and carry out legislation applicable to Ryan White programs. Per the Policy Clarification Notice included on the official HRSA website for Ryan White, “Under the uniform administrative requirements, to the extent available, recipients and subrecipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.” As such, program income must be used for the purpose and subject to the conditions of the Federal award. The requirements within the pass-through entity agreement with the Virginia Department of Health are consistent with those required by the original Federal awarding agency, the Department of Health and Human Services (HHS), HRSA. Per the frequently asked questions (FAQs) presented by HRSA’s HIV/AIDS Bureau (HAB) for Policy Clarification Notice (PCN) 15-03, Clarification Regarding the Ryan White HIV/AIDS Program and Program Income, and PCN 15-04, Utilization and Reporting of Pharmaceutical Rebates, released on March 21, 2016, program income is gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (or grant period). Program Income, inclusive of program income derived from the 340B Drug Pricing Program, includes the core medical and support services that HRSA considers allowable uses of Ryan White grant funds and the individuals eligible to receive those services. Unallowable uses include PrEP/nPEP materials, which are designed to promote or encourage, directly, intravenous drug use or sexual activity. Condition The System did not have appropriately designed internal controls in place to ensure that program income was not applied to offset expenditures prior to requesting additional cash reimbursements each month and/or quarter during the grant period. The cash management submissions and financial reporting for Assistance Listing – 93.918 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), including the quarterly Federal Financial Reports and annual SF-425 Federal Financial Reports, included the incorrect 340B program income during the period, which included unallowable uses of PrEP/nPEP materials. Cause IJP has policies and procedures in place to ensure program income was not applied to offset expenditures in its entirety prior to the end of the grant period. However, during the grant period, program income is not timely applied prior to cash reimbursement requests. IJP accumulates 340B program income on a monthly basis inclusive of the pharmacy income and related costs. Through management review of the costs associated within the 340B program, it was identified that PrEP/nPEP materials were inappropriately being included within program income. Effect or potential effect IJP did not have policies in place to ensure that program income was applied timely prior to requesting additional cash payments. As such, cash payments were being requested and reimbursed prior to application of program income. Program income was not appropriately being calculated by including unallowable uses. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context During our audit, we selected a sample of 4 months for testing, which identified that program income was not timely being applied to the cash reimbursement requests. Management does ensure that program income is applied prior to the end of the grant period. As of December 31, 2023, for Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B), the cumulative program income not applied prior to cash reimbursement was $109,593. This was not identified as questioned costs given this was subsequently applied by the end of the grant period. As of December 31, 2023, Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), for the cumulative program income not applied prior to cash reimbursement was $84,064. This was not identified as questioned costs given the program income was subsequently applied by the end of the grant period. As of December 31, 2023, the unallowable PrEP/nPEP materials caused an overstatement of 340B program income by $484,569. This amount was appropriately adjusted within the Schedule. As such, there were no identified question costs. Recommendation IJP’s existing policies and procedures are not designed to ensure the program income balance is spent timely. HRSA recommends that recipients and subrecipients strive to proactively secure and estimate the extent to which program income will be accrued. IJP should accrue for the anticipated program income to ensure it is disbursed timely. IJP should reconcile 304B expenditures to the 340B program income to ensure there are no additional expenditures reported over the amount for 340B program income allowable. View of responsible officials Management concurs with the finding and will implement procedures to ensure that the appropriate and timely application of program income.
Finding 2023-003
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: Not Applicable Awards: Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Documentation of Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion, we noted that the System had a procurement policy that included procedures for small purchases (i.e. purchases between $50,000-$250,000) in which management obtains one or more sources from suppliers or public websites in order to document justification for vendor approval. However, records were not maintained to document the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Management also validates that vendors are reviewed on a monthly basis to ensure they are not included on the suspension and debarment list. There was no documentation to support completeness and accuracy of the vendor list for suspension and debarment. Cause The System did not retain documentation to support compliance with the procurement policy that conforms to the provisions required by the Uniform Guidance. The System did not retain documentation to support the completeness and accuracy of the vendor list for suspension and debarment. Effect or potential effect Purchasing of goods and/or servicing with the grant funds may not be in compliance with the Uniform Guidance. The vendor list for suspension and debarment may not be complete and accurate and therefore, federal funds may be used to pay a contractor that is suspended or debarred. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context Small purchases were $106,345, which represents approximately 3% of total federal expenditures of $3,589,730 reported on the Schedule for the year ended December 31, 2023. Management subsequently documented the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. As part of our testing for suspension and debarment, we did not identify any vendors that were excluded from the suspension and debarment list that were part of the grant. Recommendation The System should update its process to ensure documentation is retained consistent with the procurement policy and suspension and debarment for purchasing goods and/or services with federal funds. View of responsible officials Management concurs with the finding and will implement procedures to documentation is retained to support procurement and suspension and debarment.
Finding 2023-001
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 Description: Timely Completion of the 24-month Eligibility Screening Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to “conduct and complete a full RWHAP B eligibility screening for all clients for any allowable Ryan White services prior to enrollment in the RWHAP B program and every 24-months thereafter by following the procedure from the department” (INORWB611-GY22 – Scope of Services – Section E, INORPS611-FY23 – Scope of Services – Section A, INORWB611-GY23 – Scope of Services – Section G1). The procedure from the department of the award requires the recipient to resubmit documents for residency, household income and proof of insurance before the 24-month eligibility period ends. Condition The System did not have appropriately designed internal controls in place to ensure that the documentation is obtained and reviewed to verify eligibility prior to the end of the 24-month period. Cause IJP has policies and procedures in place to obtain the eligibility documents from all clients and retain in their files. IJP’s policies and procedures specify that an eligibility worker will meet with each client for an initial screening to verify residency, income, insurance status, and HIV status. The eligibility worker is required to meet with the client to update the required eligibility screening and include the required documentation in the client file by the 24-month period end. Additionally, at each subsequent visit, the receptionist questions each client as to whether there have been any changes in their income or insurance status. If there are changes to the client’s eligibility status, another visit is scheduled with the eligibility worker. If there are delays with responses from the clients, the required documentation may not be obtained by the 24-month period end. Effect or potential effect Eligibility workers did not obtain and/or retain the required documentation related to the 24-month eligibility screening for certain clients before the required date. Based on the terms and conditions of the pass-through agreement with the Department, the clients whose eligibility was not completed by the deadline would not be considered eligible and should be discharged from the program. Questioned costs None. Identification of a repeat finding This is a repeat finding and relates to prior year finding 2022-002. Context During our audit, we selected a sample of 60 clients for testing and noted the following exceptions: • The 24-month eligibility screening was submitted to the Department after the eligibility expiration date for one client. For the exception identified, services were not provided prior to obtaining the full eligibility screening and therefore, there were no unallowable costs identified required for reimbursement from the Department. IJP has not completed a full review of all clients that could be impacted by the exception above. Recommendation Management should implement procedures to ensure completion of the eligibility screening prior to the end of the 24-month eligibility period. View of responsible officials Management concurs with the finding and will implement procedures to ensure that timely documentation is received with regard to eligibility.
Finding 2023-002
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Timely Application of Program Income Prior to Requesting Additional Cash Payments Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to follow Health Resources and Services Administration (HRSA) guidelines related to the program. HRSA develops multiple policies to help grant recipients and subrecipients understand and carry out legislation applicable to Ryan White programs. Per the Policy Clarification Notice included on the official HRSA website for Ryan White, “Under the uniform administrative requirements, to the extent available, recipients and subrecipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.” As such, program income must be used for the purpose and subject to the conditions of the Federal award. The requirements within the pass-through entity agreement with the Virginia Department of Health are consistent with those required by the original Federal awarding agency, the Department of Health and Human Services (HHS), HRSA. Per the frequently asked questions (FAQs) presented by HRSA’s HIV/AIDS Bureau (HAB) for Policy Clarification Notice (PCN) 15-03, Clarification Regarding the Ryan White HIV/AIDS Program and Program Income, and PCN 15-04, Utilization and Reporting of Pharmaceutical Rebates, released on March 21, 2016, program income is gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (or grant period). Program Income, inclusive of program income derived from the 340B Drug Pricing Program, includes the core medical and support services that HRSA considers allowable uses of Ryan White grant funds and the individuals eligible to receive those services. Unallowable uses include PrEP/nPEP materials, which are designed to promote or encourage, directly, intravenous drug use or sexual activity. Condition The System did not have appropriately designed internal controls in place to ensure that program income was not applied to offset expenditures prior to requesting additional cash reimbursements each month and/or quarter during the grant period. The cash management submissions and financial reporting for Assistance Listing – 93.918 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), including the quarterly Federal Financial Reports and annual SF-425 Federal Financial Reports, included the incorrect 340B program income during the period, which included unallowable uses of PrEP/nPEP materials. Cause IJP has policies and procedures in place to ensure program income was not applied to offset expenditures in its entirety prior to the end of the grant period. However, during the grant period, program income is not timely applied prior to cash reimbursement requests. IJP accumulates 340B program income on a monthly basis inclusive of the pharmacy income and related costs. Through management review of the costs associated within the 340B program, it was identified that PrEP/nPEP materials were inappropriately being included within program income. Effect or potential effect IJP did not have policies in place to ensure that program income was applied timely prior to requesting additional cash payments. As such, cash payments were being requested and reimbursed prior to application of program income. Program income was not appropriately being calculated by including unallowable uses. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context During our audit, we selected a sample of 4 months for testing, which identified that program income was not timely being applied to the cash reimbursement requests. Management does ensure that program income is applied prior to the end of the grant period. As of December 31, 2023, for Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B), the cumulative program income not applied prior to cash reimbursement was $109,593. This was not identified as questioned costs given this was subsequently applied by the end of the grant period. As of December 31, 2023, Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), for the cumulative program income not applied prior to cash reimbursement was $84,064. This was not identified as questioned costs given the program income was subsequently applied by the end of the grant period. As of December 31, 2023, the unallowable PrEP/nPEP materials caused an overstatement of 340B program income by $484,569. This amount was appropriately adjusted within the Schedule. As such, there were no identified question costs. Recommendation IJP’s existing policies and procedures are not designed to ensure the program income balance is spent timely. HRSA recommends that recipients and subrecipients strive to proactively secure and estimate the extent to which program income will be accrued. IJP should accrue for the anticipated program income to ensure it is disbursed timely. IJP should reconcile 304B expenditures to the 340B program income to ensure there are no additional expenditures reported over the amount for 340B program income allowable. View of responsible officials Management concurs with the finding and will implement procedures to ensure that the appropriate and timely application of program income.
Finding 2023-002
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: INORWB611-GY22; INORPS611-FY23; INORWB611-GY23 Awards: Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B) Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: April 1, 2022 to March 31, 2023; July 1, 2022 to March 31, 2023; April 1, 2023 to March 31, 2024 May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Timely Application of Program Income Prior to Requesting Additional Cash Payments Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “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.” Per the terms and conditions of the pass-through entity agreement between the Virginia Department of Health (the Department) and the Inova Juniper Program (IJP), IJP is required to follow Health Resources and Services Administration (HRSA) guidelines related to the program. HRSA develops multiple policies to help grant recipients and subrecipients understand and carry out legislation applicable to Ryan White programs. Per the Policy Clarification Notice included on the official HRSA website for Ryan White, “Under the uniform administrative requirements, to the extent available, recipients and subrecipients must disburse funds available from program income, rebates, refunds, contract settlements, audit recoveries and interest earned on such funds before requesting additional cash payments.” As such, program income must be used for the purpose and subject to the conditions of the Federal award. The requirements within the pass-through entity agreement with the Virginia Department of Health are consistent with those required by the original Federal awarding agency, the Department of Health and Human Services (HHS), HRSA. Per the frequently asked questions (FAQs) presented by HRSA’s HIV/AIDS Bureau (HAB) for Policy Clarification Notice (PCN) 15-03, Clarification Regarding the Ryan White HIV/AIDS Program and Program Income, and PCN 15-04, Utilization and Reporting of Pharmaceutical Rebates, released on March 21, 2016, program income is gross income earned by the non-Federal entity that is directly generated by a supported activity or earned as a result of the Federal award during the period of performance (or grant period). Program Income, inclusive of program income derived from the 340B Drug Pricing Program, includes the core medical and support services that HRSA considers allowable uses of Ryan White grant funds and the individuals eligible to receive those services. Unallowable uses include PrEP/nPEP materials, which are designed to promote or encourage, directly, intravenous drug use or sexual activity. Condition The System did not have appropriately designed internal controls in place to ensure that program income was not applied to offset expenditures prior to requesting additional cash reimbursements each month and/or quarter during the grant period. The cash management submissions and financial reporting for Assistance Listing – 93.918 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), including the quarterly Federal Financial Reports and annual SF-425 Federal Financial Reports, included the incorrect 340B program income during the period, which included unallowable uses of PrEP/nPEP materials. Cause IJP has policies and procedures in place to ensure program income was not applied to offset expenditures in its entirety prior to the end of the grant period. However, during the grant period, program income is not timely applied prior to cash reimbursement requests. IJP accumulates 340B program income on a monthly basis inclusive of the pharmacy income and related costs. Through management review of the costs associated within the 340B program, it was identified that PrEP/nPEP materials were inappropriately being included within program income. Effect or potential effect IJP did not have policies in place to ensure that program income was applied timely prior to requesting additional cash payments. As such, cash payments were being requested and reimbursed prior to application of program income. Program income was not appropriately being calculated by including unallowable uses. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context During our audit, we selected a sample of 4 months for testing, which identified that program income was not timely being applied to the cash reimbursement requests. Management does ensure that program income is applied prior to the end of the grant period. As of December 31, 2023, for Assistance Listing Number 93.917 – HIV Emergency Relief Project Grants (Part B), the cumulative program income not applied prior to cash reimbursement was $109,593. This was not identified as questioned costs given this was subsequently applied by the end of the grant period. As of December 31, 2023, Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C), for the cumulative program income not applied prior to cash reimbursement was $84,064. This was not identified as questioned costs given the program income was subsequently applied by the end of the grant period. As of December 31, 2023, the unallowable PrEP/nPEP materials caused an overstatement of 340B program income by $484,569. This amount was appropriately adjusted within the Schedule. As such, there were no identified question costs. Recommendation IJP’s existing policies and procedures are not designed to ensure the program income balance is spent timely. HRSA recommends that recipients and subrecipients strive to proactively secure and estimate the extent to which program income will be accrued. IJP should accrue for the anticipated program income to ensure it is disbursed timely. IJP should reconcile 304B expenditures to the 340B program income to ensure there are no additional expenditures reported over the amount for 340B program income allowable. View of responsible officials Management concurs with the finding and will implement procedures to ensure that the appropriate and timely application of program income.
Finding 2023-003
Federal Program Information Federal Agencies: Department of Health and Human Services (“HHS”) Pass-Through Entity: Virginia Department of Health Pass-Through Entity Number: Not Applicable Awards: Assistance Listing Number 93.918 – Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease (Part C) Award Periods: May 1, 2022 to April 30, 2023; May 1, 2023 to April 30, 2024 Description: Documentation of Procurement and Suspension and Debarment Type of Finding: Material Weakness in Internal Control Over Compliance Criteria In accordance with Title 2 U.S. Code of Federal Regulations, Part 200.303, Internal controls, “The Non-Federal entity must: (a) 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. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Part 200.320 Methods of procurement to be followed states the following: “The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and §§ 200.317, 200.318, and 200.319” regarding the methods of procurement used for the acquisition of property or services required under a Federal award or sub-award. Condition As part of our testing over the operating effectiveness of internal controls over the Procurement, Suspension and Debarment assertion, we noted that the System had a procurement policy that included procedures for small purchases (i.e. purchases between $50,000-$250,000) in which management obtains one or more sources from suppliers or public websites in order to document justification for vendor approval. However, records were not maintained to document the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. Management also validates that vendors are reviewed on a monthly basis to ensure they are not included on the suspension and debarment list. There was no documentation to support completeness and accuracy of the vendor list for suspension and debarment. Cause The System did not retain documentation to support compliance with the procurement policy that conforms to the provisions required by the Uniform Guidance. The System did not retain documentation to support the completeness and accuracy of the vendor list for suspension and debarment. Effect or potential effect Purchasing of goods and/or servicing with the grant funds may not be in compliance with the Uniform Guidance. The vendor list for suspension and debarment may not be complete and accurate and therefore, federal funds may be used to pay a contractor that is suspended or debarred. Questioned costs None. Identification of a repeat finding This is not a repeat finding. Context Small purchases were $106,345, which represents approximately 3% of total federal expenditures of $3,589,730 reported on the Schedule for the year ended December 31, 2023. Management subsequently documented the rationale for the procurement method, contract type selection, contractor selection or rejection, and the basis for the contract price. As part of our testing for suspension and debarment, we did not identify any vendors that were excluded from the suspension and debarment list that were part of the grant. Recommendation The System should update its process to ensure documentation is retained consistent with the procurement policy and suspension and debarment for purchasing goods and/or services with federal funds. View of responsible officials Management concurs with the finding and will implement procedures to documentation is retained to support procurement and suspension and debarment.