Audit 351933

Finding 2024-001 Federal Program: Congressional Directives Assistance Listing Number: 93.493 Federal Agency: U.S. Department of Health and Human Services (subagency: Health Resources and Service Administration (HRSA)) Federal Award Identification Number: 1 CE1HS52667-01-00 (Award Date: 9/21/23) Criteria or Specific Requirement As per the Department of Health and Human Services, HRSA Notice of Award to the Organization and the Construction Projects (HRSA-23-117) Program Guidance document issued by HRSA, HRSA requires award recipients to seek prior approval through the Electronic Handbook for all pre-award costs. The Code of Federal Regulations, Section 200.458 defines pre-award costs as follows: costs that are incurred before the start date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. These costs are allowable only to the extent that they would have been allowed if incurred after the start date of the federal award and only with written approval of the federal agency. Condition The Organization claimed pre-award costs under the award, which were determined to meet the criteria of the types of costs allowed under the federal award; however, such costs were not submitted to HRSA for prior approval and thus, prior approval was not obtained. Cause Due to turnover of the individuals responsible for overseeing the program, the new individuals involved did not recognize that the timing of the expenditure was prior to the start date of the federal award. Effect or Potential Effect HRSA may disallow the pre-award costs under the award. As per the Construction Projects (HRSA-23-117) Program Guidance document issued by HRSA, HRSA approval of pre-award costs is not guaranteed, and recipients incur pre-award costs at their own risk. Questioned Costs The pre-award costs incurred under the award that were not approved by HRSA are representative of known questioned costs and amount to $93,450 under Assistance Listing Number 93.493 and the federal award 1 CE1HS52667-01-00 (Award Date: 9/21/23). Context Total federal program expenditures were $108,401 and the pre-award costs claimed under the award totaled $93,450. Recommendation We recommend the Organization to strengthen internal controls over pre-award costs to ensure proper approval is obtained in accordance with the federal agency requirements. Views of Responsible Officials The Organization is in agreement with this audit finding. All grantor award guidelines will be reviewed by the Director of innovation & Grants and the Senior Director of Development to ensure all compliance requirements are interpreted and understood the same. If there is not a consistent understanding, then the Chief Development Officer will review the guidelines.

Finding 2024-001 Federal Program: Congressional Directives Assistance Listing Number: 93.493 Federal Agency: U.S. Department of Health and Human Services (subagency: Health Resources and Service Administration (HRSA)) Federal Award Identification Number: 1 CE1HS52667-01-00 (Award Date: 9/21/23) Criteria or Specific Requirement As per the Department of Health and Human Services, HRSA Notice of Award to the Organization and the Construction Projects (HRSA-23-117) Program Guidance document issued by HRSA, HRSA requires award recipients to seek prior approval through the Electronic Handbook for all pre-award costs. The Code of Federal Regulations, Section 200.458 defines pre-award costs as follows: costs that are incurred before the start date of the federal award or subaward directly pursuant to the negotiation and in anticipation of the federal award where such costs are necessary for efficient and timely performance of the scope of the work. These costs are allowable only to the extent that they would have been allowed if incurred after the start date of the federal award and only with written approval of the federal agency. Condition The Organization claimed pre-award costs under the award, which were determined to meet the criteria of the types of costs allowed under the federal award; however, such costs were not submitted to HRSA for prior approval and thus, prior approval was not obtained. Cause Due to turnover of the individuals responsible for overseeing the program, the new individuals involved did not recognize that the timing of the expenditure was prior to the start date of the federal award. Effect or Potential Effect HRSA may disallow the pre-award costs under the award. As per the Construction Projects (HRSA-23-117) Program Guidance document issued by HRSA, HRSA approval of pre-award costs is not guaranteed, and recipients incur pre-award costs at their own risk. Questioned Costs The pre-award costs incurred under the award that were not approved by HRSA are representative of known questioned costs and amount to $93,450 under Assistance Listing Number 93.493 and the federal award 1 CE1HS52667-01-00 (Award Date: 9/21/23). Context Total federal program expenditures were $108,401 and the pre-award costs claimed under the award totaled $93,450. Recommendation We recommend the Organization to strengthen internal controls over pre-award costs to ensure proper approval is obtained in accordance with the federal agency requirements. Views of Responsible Officials The Organization is in agreement with this audit finding. All grantor award guidelines will be reviewed by the Director of innovation & Grants and the Senior Director of Development to ensure all compliance requirements are interpreted and understood the same. If there is not a consistent understanding, then the Chief Development Officer will review the guidelines.