Audit 347886

FY End

2024-06-30

Total Expended

$6.24M

Findings

4

Programs

6

Organization: M.g.h. Family Health Center Dba Muskegon Family Care (MI)

Year: 2024 Accepted: 2025-03-25

Auditor: Quast Janke & Company

Organization Exclusion Status:

Checking exclusion status...

ID	Ref	Severity	Repeat	Requirement
529847	2024-002	Significant Deficiency	-	C
529848	2024-002	Significant Deficiency	-	C
1106289	2024-002	Significant Deficiency	-	C
1106290	2024-002	Significant Deficiency	-	C

ALN	Program	Spent	Major	Findings
10.766	Community Facilities Loans and Grants	$3.62M	-	0
93.224	Health Center Program (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)	$1.76M	Yes	1
93.243	Substance Abuse and Mental Health Services Projects of Regional and National Significance	$550,818	-	0
93.526	Grants for Capital Development in Health Centers	$167,696	-	0
93.527	Grants for New and Expanded Services Under the Health Center Program	$118,525	Yes	1
93.110	Maternal and Child Health Federal Consolidated Programs	$28,473	-	0

Contacts

Name	Title	Type
YX87LXQJXXN5	Bunny Punches	Auditee
2317371805	Robert Friske	Auditor
No contacts on file

Notes to SEFA

Title: U.S. Department of Agriculture Loan Agreement Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of MGH Family Health Center and is presented using the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The expenditures in the Schedule of Expenditures of Federal Awards are in agreement with the amounts reported in the financial statements and reports submitted to the Department of Health and Human Services. Although some grant awards are for different periods than the Center's fiscal year, all expenditures in the schedule are for the year ended June 30, 2024. De Minimis Rate Used: N Rate Explanation: MGH Family Health Center has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance The amount expended under AL 10.766, Community Facilities Loans and Grants, represents the beginning loan balance of a U.S. Department of Agriculture guaranteed loan agreement. The loan had outstanding principal balance of $3,446,712 as of June 30, 2024.

Title: Reconciliation of Federal Awards Accounting Policies: The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of MGH Family Health Center and is presented using the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. The expenditures in the Schedule of Expenditures of Federal Awards are in agreement with the amounts reported in the financial statements and reports submitted to the Department of Health and Human Services. Although some grant awards are for different periods than the Center's fiscal year, all expenditures in the schedule are for the year ended June 30, 2024. De Minimis Rate Used: N Rate Explanation: MGH Family Health Center has elected not to use the 10 percent de minimis indirect cost rate as allowed under the Uniform Guidance Federal awards revenue for the year ended June 30, 2024 is reported as follows: Expenditures per schedule of expenditures of federal awards $6,243,596 Community Facilities Loans and Grants (AL# 10.766) Represents the beginning loan balance of loan agreement with U.S. Department of Agriculture. $(3,622,691) Federal grants per statement of activities $2,620,905

Finding Details

Finding 2024-002

Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.

Finding 2024-002

Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.

Finding 2024-002

Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.

Finding 2024-002

Program AL# 93.224/93.527 Health Center Cluster Program - Cash Management - Significant Deficiency in Internal Control over Compliance Criteria - Health centers are required to maintain written procedures that minimize the time elapsing between the transfer of funds from the U.S. Treasury and disbursement of funds by the non-Federal entity (2 CFR section 200.305). Condition - During audit procedures of federal draw downs we noted several significant delays in performing the draw down request. Context - During audit procedures, we tested payments received by the center to verify procedures were followed to minimize the time elapsed between the date payroll is processed and funds are requested. We noted 25 payments that were request greater than one week after the pay date that doesn’t appear to follow the Center’s written procedures. Effect - Delay in drawing down funds could lead to incorrect Federal Financial Report (SF-425) and compliance requirements with reporting. Incorrect financial reports could result in lost funding. Questioned Costs - There were no questioned cost regarding this finding. Cause - The delay in processing federal draw downs is due to lack of adequate review procedures. Recommendation - We recommend the Center’s management to monitor and evaluate the performance of their accounting staff and to make improvements to prevent and/or detect noncompliance when necessary. Additionally, the Center should provide training to all personnel involved in accounting for federal awards. Views of Responsible Officials - We concur with the audit finding. The Center hired and filled a key financial position subsequent to the year end. Management believes a lack of permanent staff a significant factor in causing this finding. The Center has established proper accounting procedures and controls, and with the key postion being filled, federal draw downs will be perfomed according the Center's policy.