Audit 341716

Finding: Allowable Activities and Allowable Costs Federal Assistance Listing No. 93.527 Affordable Care Act (ACA) Grants for New and Expanded Services Under the Health Center Program Cluster Award #: 1 Q8VCS45450-01-00, Award year: March 1, 2022 – February 29, 2024 U.S. Department of Health and Human Services, Health Resources and Services Administration Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Subpart E – Cost Principles; General Provision – Policy Guide (2 CFR 200.400): The application of cost principles is based on the fundamental premises that: The accounting practices of the recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the federal award. Condition: During our review of expenditures of federal funds under the Health Center Program Cluster, certain cost principles were not consistently applied to all expenses. The Organization received a grant for the purpose of expanding electronic health record systems, which ended in February of 2024; however the contracted vendor had not completed work for which the grant funds had been appropriated within the 120 day grant close out period. Questioned Costs: $880,535. Questioned costs were related to a single grant within the Health Center Program cluster. The value was determined based on the two vendor invoices paid to the vendor at the end of the grant period but prior to work performed. Context: We tested a sample of 24 expenditures out of a population of 230 expenditures recorded to the grant for $1,906,159 of the total expenditures $5,711,364 and noted the above issue. A non-statistical sampling methodology was used to select the sample. Effect: The Organization did not consistently cost principles under Uniform Guidance. Costs were incurred using federal funds prior to services rendered. Cause: The Organization did not have adequate internal controls in place to ensure cost principles under Uniform Guidance were consistently applied. Identification as a repeat finding: Not applicable. Recommendation: The Organization should coordinate with HRSA to determine allowability of expenditures incurred. The Organization should add internal controls to monitor that cost principles under Uniform Guidance are consistently applied. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.

Finding: Allowable Activities and Allowable Costs Federal Assistance Listing No. 93.527 Affordable Care Act (ACA) Grants for New and Expanded Services Under the Health Center Program Cluster Award #: 1 Q8VCS45450-01-00, Award year: March 1, 2022 – February 29, 2024 U.S. Department of Health and Human Services, Health Resources and Services Administration Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; Subpart E – Cost Principles; General Provision – Policy Guide (2 CFR 200.400): The application of cost principles is based on the fundamental premises that: The accounting practices of the recipient and subrecipient must be consistent with these cost principles and support the accumulation of costs as required by these cost principles, including maintaining adequate documentation to support costs charged to the federal award. Condition: During our review of expenditures of federal funds under the Health Center Program Cluster, certain cost principles were not consistently applied to all expenses. The Organization received a grant for the purpose of expanding electronic health record systems, which ended in February of 2024; however the contracted vendor had not completed work for which the grant funds had been appropriated within the 120 day grant close out period. Questioned Costs: $880,535. Questioned costs were related to a single grant within the Health Center Program cluster. The value was determined based on the two vendor invoices paid to the vendor at the end of the grant period but prior to work performed. Context: We tested a sample of 24 expenditures out of a population of 230 expenditures recorded to the grant for $1,906,159 of the total expenditures $5,711,364 and noted the above issue. A non-statistical sampling methodology was used to select the sample. Effect: The Organization did not consistently cost principles under Uniform Guidance. Costs were incurred using federal funds prior to services rendered. Cause: The Organization did not have adequate internal controls in place to ensure cost principles under Uniform Guidance were consistently applied. Identification as a repeat finding: Not applicable. Recommendation: The Organization should coordinate with HRSA to determine allowability of expenditures incurred. The Organization should add internal controls to monitor that cost principles under Uniform Guidance are consistently applied. Views of responsible officials: The Organization agrees with the finding. See separate report for planned corrective actions.