FAC Explorer

Audit 360886

FY End
2024-09-30
Total Expended
$11.25M
Findings
8
Programs
13
Organization: El Proyecto Del Barrio, Inc. (CA)
Year: 2024 Accepted: 2025-06-30
Auditor: Vasquez & CO LLP

Organization Exclusion Status:

Findings

ID Ref Severity Repeat Requirement
569378 2024-001 Significant Deficiency Yes N
569379 2024-002 - Yes L
569380 2024-003 - - L
569381 2024-004 - - B
1145820 2024-001 Significant Deficiency Yes N
1145821 2024-002 - Yes L
1145822 2024-003 - - L
1145823 2024-004 - - B

Programs

ALN Program Spent Major Findings
93.224 Health Center Program (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $4.23M Yes 1
21.027 Coronavirus State and Local Fiscal Recovery Funds $2.37M Yes 1
17.259 Wioa Youth Activities $1.50M - 0
17.258 Wioa Adult Program $1.29M - 0
93.914 Hiv Emergency Relief Project Grants $442,096 - 0
93.575 Child Care and Development Block Grant $291,407 Yes 1
93.918 Grants to Provide Outpatient Early Intervention Services with Respect to Hiv Disease $183,801 - 0
93.558 Temporary Assistance for Needy Families $164,175 Yes 1
10.558 Child and Adult Care Food Program $69,098 - 0
93.959 Block Grants for Prevention and Treatment of Substance Abuse $67,160 - 0
93.940 Hiv Prevention Activities Health Department Based $54,546 - 0
93.526 Grants for Capital Development in Health Centers $40,000 - 0
14.218 Community Development Block Grants/entitlement Grants $33,425 - 0

Contacts

Name Title Type
LJGPTLASLYZ5 Ricardo Ornelas Auditee
8188103500 Elisa Stilwell Auditor
No contacts on file

Notes to SEFA

Title: NOTE 1 BASIS OF PRESENTATION Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: El Proyecto has not elected to use the 10% de minimis indirect cost rate as permitted under 2 CFR §200.414(f). El Proyecto utilizes a federally negotiated indirect cost rate of 14.3%, as approved by its cognizant federal agency, in accordance with 2 CFR §200.414. This rate is applied to applicable federal programs as stipulated in the respective award agreements. The accompanying schedule of expenditures of federal awards (the Schedule) includes the federal award activity of El Proyecto del Barrio, Inc., (El Proyecto) under programs of the federal government for the year ended September 30, 2024. For purposes of this Schedule, financial awards include federal awards received directly from a federal agency, as well as federal funds received indirectly by El Proyecto from a non-federal agency or other organization. Only the portions of program expenditures reimbursable with federal funds are reported in the accompanying Schedule. Program expenditures in excess of the maximum reimbursement authorized, if any, or the portion of the program expenditures that were funded with other state, local or other non-federal funds are excluded from the accompanying Schedule. The information in this Schedule is presented 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). Because the Schedule presents only a selected portion of the operations of El Proyecto, it is not intended to and does not present the financial position, changes in net assets, or cash flows of El Proyecto.
Title: NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: El Proyecto has not elected to use the 10% de minimis indirect cost rate as permitted under 2 CFR §200.414(f). El Proyecto utilizes a federally negotiated indirect cost rate of 14.3%, as approved by its cognizant federal agency, in accordance with 2 CFR §200.414. This rate is applied to applicable federal programs as stipulated in the respective award agreements. Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years.
Title: NOTE 3 INDIRECT COST RATE Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: El Proyecto has not elected to use the 10% de minimis indirect cost rate as permitted under 2 CFR §200.414(f). El Proyecto utilizes a federally negotiated indirect cost rate of 14.3%, as approved by its cognizant federal agency, in accordance with 2 CFR §200.414. This rate is applied to applicable federal programs as stipulated in the respective award agreements. El Proyecto has not elected to use the 10% de minimis indirect cost rate as permitted under 2 CFR §200.414(f). El Proyecto utilizes a federally negotiated indirect cost rate of 14.3%, as approved by its cognizant federal agency, in accordance with 2 CFR §200.414. This rate is applied to applicable federal programs as stipulated in the respective award agreements
Title: NOTE 4 RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Accounting Policies: Expenditures on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. De Minimis Rate Used: N Rate Explanation: El Proyecto has not elected to use the 10% de minimis indirect cost rate as permitted under 2 CFR §200.414(f). El Proyecto utilizes a federally negotiated indirect cost rate of 14.3%, as approved by its cognizant federal agency, in accordance with 2 CFR §200.414. This rate is applied to applicable federal programs as stipulated in the respective award agreements. Grant expenditure reports for the year ended September 30, 2024, which have been submitted to grantor agencies, will, in some cases, differ from the amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of the year-end accruals

Finding Details

Finding 2024-001
Finding F2024-001 – Incorrect Application of Sliding Fee Discounts (Repeat Finding) Assistance Listing Number: 93.224 Assistance Listing Program Title: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services (HHS) Health Resources and Services Administration Pass Through Entity: Not applicable Federal Award Number: H80CS06647-18-02 H80CS06647-19-05 Federal Award Year: January 1, 2023 to December 31, 2023 January 1, 2024 to December 31, 2024 Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Criteria or Specific Requirements Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted based on the patient’s ability to pay. The patient’s ability to pay is determined based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (HHS). The poverty guidelines are issued each year in the Federal Register and HHS maintains a web page that provides the poverty guidelines. Non-grant funds (State, local, and other operational funding and fees, premiums, and third-party reimbursements which the project may reasonably be expected to receive, including any such funds in excess of those originally expected), shall be used as permitted under the law and may be used for such other purposes as are not specifically prohibited under the law if such use furthers the objectives of the project. Condition El Proyecto del Barrio, Inc. (El Proyecto) determines the amount of fees to be charged to a patient based on the patient’s income, expenses, and number of dependents in conjunction with the sliding fee schedule. Of the 40 patients selected for testwork, we noted the following: • 8 patients were charged an incorrect sliding fee amount, which resulted in undercharging the patients by a total of $50. These errors were due to the incorrect patient income amount used to calculate the sliding fee amount. The patient’s net income or net pay was incorrectly used to determine the sliding fee amount instead of the patient’s gross income per the income tax return, pay stub, or earnings statement. • 13 patients had no proof of income declaration or sliding fee application form on file. Therefore, there was no formal documentation to support the determination of the patient’s sliding fee amount. This resulted in undercharging the patients by a total of $1,615.   • 1 patient had no application form on file but had a record in the system. Using the patient’s supporting documentation on file and a family size of 1, we verified the patient’s sliding fee amount was correctly calculated. • 1 patient’s income amount per the system was overstated by $11.50 as a result of an input error by staff. This error had no impact on the sliding fee calculation. • 1 patient’s income amount per the system was overstated by $18.59, as the income amount per the patient’s application form did not agree with the patient’s supporting documentation on file (earnings statement). This error had no impact on the sliding fee calculation. • 1 patient’s gross income amount was incorrect in the system. The gross income amount was incorrectly determined by staff based on one week's income instead of two weeks per the patient’s bi-weekly earnings statement. This error resulted in undercharging the patient by $70. • 1 patient’s account number was incorrect in the system due to an input error by staff. This error had no impact on the sliding fee calculation. Questioned Costs The total gross amount undercharged was $1,735. Cause The causes of the above errors are the following: • Errors by staff in properly determining the patient’s ability to pay. • Incorrect patient income information input into the system • Lack of supervisor review process and maintenance of income declaration forms. • High turnover of clinical staff and lack of sufficient training. Effect Such errors may result in an incorrect determination of the patient’s ability to pay, incorrect fee amounts charged to patients, and noncompliance with federal grant requirements. Recommendation We recommend that El Proyecto’s controls and procedures be strengthened to ensure that income declaration is properly verified and adequately documented, and that the sliding fee discount is properly determined and applied. This should include incorporating additional procedures, as necessary, on the existing checklist used to determine the patient’s sliding fee amount, formal supervisory review of the checklist, and additional training for all staff involved in the sliding fee review process. This will help ensure that 1) there is proper monitoring and review of compliance with program requirements, and 2) proper determination of the sliding fee amount charged to patients.   Views of Responsible Officials and Planned Corrective Actions El Proyecto del Barrio, Inc. acknowledges the finding related to the incorrect administration of sliding fee discounts. We are committed to strengthening the administration of the sliding fee program to ensure full compliance with grant requirements. To address these issues and prevent recurrence, the following corrective actions are being implemented: 1. Revised Application and Documentation Requirements: o The Sliding Fee Program application forms are being updated to include structured sections for staff to record income from supporting documentation (e.g., pay stubs, tax returns), rather than relying on the patient to write their income on the application, which will greatly reduce incorrect income stated on support. Staff will be responsible for calculating annual gross income based on supporting documentation and have a checklist to ensure documentation is complete and retained/uploaded in the system. 2. Two-Step Review Process: o A staff member (the “Preparer) will calculate the annual gross income, determine the household size, and determine the eligible sliding fee discount, and a second staff member (the “Reviewer”) will independently review and verify the Preparer’s calculations and determinations based on the supporting documentation. Both parties will document their review of the application to establish accountability. 3. Staff Training and Ongoing Competency Checks: o Comprehensive refresher training will be provided to all staff involved in the sliding fee program process, including the use of the poverty guidelines, income calculation methods, the new forms, entering income and household size into the system, and uploading support to the system. 4. Formal Review: o The Billing Department will conduct regular audits of completed sliding fee applications and eligibility determination forms to ensure compliance with policies. Errors will be tracked and addressed through corrective action and coaching. El Proyecto del Barrio, Inc. remains committed to accurate, compliant, and equitable implementation of the Sliding Fee Program. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025
Finding 2024-002
Finding F2024-002 – Untimely Submission and Lack of Formal Approval of Reports (Repeat Finding) Assistance Listing Number: 93.558 Assistance Listing Program Title: 477 Cluster: Temporary Assistance for Needy Families (TANF) Federal Agency: U.S. Department of Labor Pass Through Entity: City of Los Angeles Community Development Department Federal Award Number: 144365-1, 144413-1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Reporting A. Untimely Submission of Quarterly General Ledger Reconciliation Criteria El Proyecto is required to use the City of Los Angeles (the City) template forms to submit the General Ledger Reconciliation Report to the City by the end of the month following each quarter. Condition In performing reporting compliance testwork of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that two (2) reports for the quarter ended December 31, 2023 were not submitted within the required timeframe, as follows: Program Title Contract Number Reporting Quarter Ended Due Date Submission Date Days Late Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 January 31, 2024 February 5, 2024 5 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 January 31, 2024 February 5, 2024 5 Cause El Proyecto does not have adequate monitoring controls in place to ensure that required reports were submitted to the City within the required timeframe. Effect Late submission of required reports will result in noncompliance with the grant and funding agreement. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions This finding is classified as a repeat finding due to the timing of the audit process. The Single Audit Report for the fiscal year ended September 30, 2023 was issued on June 14, 2024. Therefore, the same grant reporting process was in place during the majority of fiscal year 2024. As a result, El Proyecto did not have a reasonable opportunity to implement corrective actions for the full fiscal year 2024. Nonetheless, El Proyecto acknowledges the finding and has since taken steps to strengthen monitoring measures to prevent recurrence. El Proyecto implemented the above additional monitoring measures on August 31, 2024, to ensure that preparation and the submission of grant expenditure reports by grant staff are submitted in a timely manner. Person Responsible: Yulin Lin Position of Responsible Party: Controller Completion Date: August 31, 2024 B. Lack of Formal Review of the Quarterly General Ledger Reconciliation Reports by Authorized Personnel Criteria In accordance with FMD Directive No. 24–002, El Proyecto must submit to the City the quarterly General Ledger Reconciliation Report by the end of the month following each quarter. A template form provided by the City includes a preparer and reviewer section. In accordance with El Proyecto’s formal policies and procedures, quarterly and monthly reports must be reviewed and approved by one of the following individuals: • Haimanot Fekado, Program Director • Mary Hernandez, Chief Operating Officer • Corinne Sanchez, Chief Executive Officer Condition In performing reporting compliance testwork, of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that all four (4) were not properly signed as reviewed and approved by one of the authorized personnel listed above, as follows: Program Title Contract Number Reporting Quarter Ended Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 June 2024 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 June 2024   Cause El Proyecto does not have adequate monitoring controls in place to ensure that reports submitted are properly reviewed and approved by authorized personnel. Effect Lack of formal review and approval may result in errors not being identified and corrected prior to submission to the City. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its monitoring controls to ensure that formal policies and procedures for the review and approval of reports are properly adhered to. Views of Responsible Officials and Planned Corrective Actions Refer to part A above.
Finding 2024-003
Finding F2024-003 – Untimely Submission and Lack of Formal Approval of Reports Assistance Listing Number: 21.027 Assistance Listing Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass Through Entity: City of Los Angeles Community Development Department Federal Award Number: 141412-4, 145794-1, 145801-1 Federal Award Year: July 1, 2022 to December 31, 2024 June 1, 2024 to December 31, 2024 Compliance Requirement: Reporting A. Untimely Submission of Expenditure and Quarterly General Ledger Reconciliation Reports Criteria El Proyecto is required to use the City of Los Angeles (the City) template forms to submit the Expenditure Report and General Ledger Reconciliation Report to the City by the following required submission dates: Type of Report Assistance Listing Number Frequency Submission Deadline Expenditure Report 21.027 Monthly 15th calendar day of each month, with exception - due on the prior business day, if the 15th day should fall on a weekend or holiday General Ledger Reconciliation Report 21.027 Quarterly End of the month following each quarter   Condition In performing reporting compliance testwork, we noted the following: • Of the forty-two (42) monthly Expenditure Reports selected for testwork, we noted that three (3) monthly Expenditure Reports were submitted beyond the due date as follows: Program Title Contract Number Reporting Month Due Date Submission Date Days Late CA For All - Early Childhood Education Student Advancement Project 141412-4 December 2023 January 12, 2024 January 15, 2024 3 Summer HLAY Program- Californians for All [North Valley] 145794-1 August 2024 September 13, 2024 September 26, 2024 13 Summer HLAY Program- Californians for All [South Valley] 145801-1 August 2024 September 13, 2024 September 26, 2024 13 • Of the twelve (12) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that five (5) reports for the quarter ended December 31, 2023 were not submitted within the required timeframe, as follows: Program Title Contract Number Reporting Quarter Ended Due Date Submission Date Days Late CA For All - LA Community College - City Pathways 141304-4 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Youth & Community Harvest Internship Prg. [South Valley and North Valley) 141856-3 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Youth & Community Harvest Internship Prg. [North Valley] 141898-3 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Angeleno Corps - Youth Workforce Program [North Valley] 144504-2 December 2023 January 31, 2024 February 14, 2024 14 LA RISE - Youth Academy - California for All [South Valley] 141558-3 December 2023 January 31, 2024 February 14, 2024 14   Cause El Proyecto does not have adequate monitoring controls in place to ensure that required reports are submitted to the City within the required timeframe. Effect Late submission of required reports will result in noncompliance with the grant and funding agreement. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions Refer to Finding F2024-002 part A. B. Lack of Formal Review of the Quarterly General Ledger Reconciliation Reports by Authorized Personnel Criteria In accordance with FMD Directive No. 24–002, El Proyecto must submit to the City the quarterly General Ledger Reconciliation Report by the end of the month following each quarter. A template form provided by the City includes a preparer and reviewer section. In accordance with El Proyecto’s formal policies and procedures, quarterly and monthly reports must be reviewed and approved by one of the following individuals: • Haimanot Fekado, Program Director • Mary Hernandez, Chief Operating Officer • Corinne Sanchez, Chief Executive Officer   Condition In performing reporting compliance testwork, we noted that six (6) out of the twelve (12) quarterly General Ledger Reconciliation Reports selected for testwork were not properly signed as reviewed and approved by one of the authorized personnel listed above, as follows: Program Title Contract Number Reporting Quarter Ended Cal For All - LA Community College - City Pathways 141304-4 December 2023 CA For All - Early Childhood Education Student Advancement Project 141412-4 December 2023 CA For All - Youth & Community Harvest Internship Prg. [South Valley and North Valley] 141856-3 December 2023 CA For All - Youth & Community Harvest Internship Prg. [North Valley] 141898-3 December 2023 CA For All - Angeleno Corps - Youth Workforce Program [North Valley] 144504-2 December 2023 LA RISE - Youth Academy - California for All [South Valley 141558-3 December 2023 Cause El Proyecto does not have adequate monitoring controls in place to ensure that reports submitted are properly reviewed and approved by authorized personnel. Effect Lack of formal review and approval by authorized personnel may result in errors not being identified and corrected prior to submission to the City. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its monitoring controls to ensure that formal policies and procedures for the review and approval of reports are properly adhered to. Views of Responsible Officials and Planned Corrective Actions Refer to Finding F2024-002 part A.
Finding 2024-004
Finding F2024-004 – Missing approval of timesheet Assistance Listing Number: 93.575 Assistance Listing Program Title: California State Preschool Program (CSPP) Federal Agency: U.S. Department of Labor Pass Through Entity: California Department of Education Federal Award Number: CSPP-3192-0 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: A. Activities allowed / unallowed B. Allowable costs/cost principles Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition In performing allowable costs testwork, we noted that 1 out of 25 timesheets selected for testwork was missing evidence of the supervisor’s approval. Cause The timecard missing the supervisor’s approval resulted from a payroll system restriction that prevents supervisors from viewing employee information, including timecards, for employees who are on leave. This is in place to prevent a supervisor from contacting an employee on approved leave and to assure El Proyecto remains compliant with applicable employment laws and regulations while an employee is on approved leave. This system restriction resulted in the supervisor being unable to approve the employee’s timecard. Effect Lack of review and approval of timesheets could lead to unallowed costs being charged to the program. Questioned Costs None. Recommendation We recommend that El Proyecto implement additional controls to ensure the timesheet related to the actual hours worked for individuals who go on medical leave during a pay period are reviewed and approved. This will help ensure that payroll charges are accurate and that only allowable costs are charged to the grant. Views of Responsible Officials and Planned Corrective Actions El Proyecto will update the standard operating procedure for approving timecards while an employee is on leave while remaining compliant with applicable employment laws and regulations. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025
Finding 2024-001
Finding F2024-001 – Incorrect Application of Sliding Fee Discounts (Repeat Finding) Assistance Listing Number: 93.224 Assistance Listing Program Title: Health Center Program Cluster Federal Agency: U.S. Department of Health and Human Services (HHS) Health Resources and Services Administration Pass Through Entity: Not applicable Federal Award Number: H80CS06647-18-02 H80CS06647-19-05 Federal Award Year: January 1, 2023 to December 31, 2023 January 1, 2024 to December 31, 2024 Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts Criteria or Specific Requirements Health centers must have a schedule of fees or payments for the provision of their health services consistent with locally prevailing rates or charges and designed to cover their reasonable costs of operation. They are also required to have a corresponding schedule of discounts applied and adjusted based on the patient’s ability to pay. The patient’s ability to pay is determined based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (HHS). The poverty guidelines are issued each year in the Federal Register and HHS maintains a web page that provides the poverty guidelines. Non-grant funds (State, local, and other operational funding and fees, premiums, and third-party reimbursements which the project may reasonably be expected to receive, including any such funds in excess of those originally expected), shall be used as permitted under the law and may be used for such other purposes as are not specifically prohibited under the law if such use furthers the objectives of the project. Condition El Proyecto del Barrio, Inc. (El Proyecto) determines the amount of fees to be charged to a patient based on the patient’s income, expenses, and number of dependents in conjunction with the sliding fee schedule. Of the 40 patients selected for testwork, we noted the following: • 8 patients were charged an incorrect sliding fee amount, which resulted in undercharging the patients by a total of $50. These errors were due to the incorrect patient income amount used to calculate the sliding fee amount. The patient’s net income or net pay was incorrectly used to determine the sliding fee amount instead of the patient’s gross income per the income tax return, pay stub, or earnings statement. • 13 patients had no proof of income declaration or sliding fee application form on file. Therefore, there was no formal documentation to support the determination of the patient’s sliding fee amount. This resulted in undercharging the patients by a total of $1,615.   • 1 patient had no application form on file but had a record in the system. Using the patient’s supporting documentation on file and a family size of 1, we verified the patient’s sliding fee amount was correctly calculated. • 1 patient’s income amount per the system was overstated by $11.50 as a result of an input error by staff. This error had no impact on the sliding fee calculation. • 1 patient’s income amount per the system was overstated by $18.59, as the income amount per the patient’s application form did not agree with the patient’s supporting documentation on file (earnings statement). This error had no impact on the sliding fee calculation. • 1 patient’s gross income amount was incorrect in the system. The gross income amount was incorrectly determined by staff based on one week's income instead of two weeks per the patient’s bi-weekly earnings statement. This error resulted in undercharging the patient by $70. • 1 patient’s account number was incorrect in the system due to an input error by staff. This error had no impact on the sliding fee calculation. Questioned Costs The total gross amount undercharged was $1,735. Cause The causes of the above errors are the following: • Errors by staff in properly determining the patient’s ability to pay. • Incorrect patient income information input into the system • Lack of supervisor review process and maintenance of income declaration forms. • High turnover of clinical staff and lack of sufficient training. Effect Such errors may result in an incorrect determination of the patient’s ability to pay, incorrect fee amounts charged to patients, and noncompliance with federal grant requirements. Recommendation We recommend that El Proyecto’s controls and procedures be strengthened to ensure that income declaration is properly verified and adequately documented, and that the sliding fee discount is properly determined and applied. This should include incorporating additional procedures, as necessary, on the existing checklist used to determine the patient’s sliding fee amount, formal supervisory review of the checklist, and additional training for all staff involved in the sliding fee review process. This will help ensure that 1) there is proper monitoring and review of compliance with program requirements, and 2) proper determination of the sliding fee amount charged to patients.   Views of Responsible Officials and Planned Corrective Actions El Proyecto del Barrio, Inc. acknowledges the finding related to the incorrect administration of sliding fee discounts. We are committed to strengthening the administration of the sliding fee program to ensure full compliance with grant requirements. To address these issues and prevent recurrence, the following corrective actions are being implemented: 1. Revised Application and Documentation Requirements: o The Sliding Fee Program application forms are being updated to include structured sections for staff to record income from supporting documentation (e.g., pay stubs, tax returns), rather than relying on the patient to write their income on the application, which will greatly reduce incorrect income stated on support. Staff will be responsible for calculating annual gross income based on supporting documentation and have a checklist to ensure documentation is complete and retained/uploaded in the system. 2. Two-Step Review Process: o A staff member (the “Preparer) will calculate the annual gross income, determine the household size, and determine the eligible sliding fee discount, and a second staff member (the “Reviewer”) will independently review and verify the Preparer’s calculations and determinations based on the supporting documentation. Both parties will document their review of the application to establish accountability. 3. Staff Training and Ongoing Competency Checks: o Comprehensive refresher training will be provided to all staff involved in the sliding fee program process, including the use of the poverty guidelines, income calculation methods, the new forms, entering income and household size into the system, and uploading support to the system. 4. Formal Review: o The Billing Department will conduct regular audits of completed sliding fee applications and eligibility determination forms to ensure compliance with policies. Errors will be tracked and addressed through corrective action and coaching. El Proyecto del Barrio, Inc. remains committed to accurate, compliant, and equitable implementation of the Sliding Fee Program. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025
Finding 2024-002
Finding F2024-002 – Untimely Submission and Lack of Formal Approval of Reports (Repeat Finding) Assistance Listing Number: 93.558 Assistance Listing Program Title: 477 Cluster: Temporary Assistance for Needy Families (TANF) Federal Agency: U.S. Department of Labor Pass Through Entity: City of Los Angeles Community Development Department Federal Award Number: 144365-1, 144413-1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Reporting A. Untimely Submission of Quarterly General Ledger Reconciliation Criteria El Proyecto is required to use the City of Los Angeles (the City) template forms to submit the General Ledger Reconciliation Report to the City by the end of the month following each quarter. Condition In performing reporting compliance testwork of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that two (2) reports for the quarter ended December 31, 2023 were not submitted within the required timeframe, as follows: Program Title Contract Number Reporting Quarter Ended Due Date Submission Date Days Late Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 January 31, 2024 February 5, 2024 5 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 January 31, 2024 February 5, 2024 5 Cause El Proyecto does not have adequate monitoring controls in place to ensure that required reports were submitted to the City within the required timeframe. Effect Late submission of required reports will result in noncompliance with the grant and funding agreement. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions This finding is classified as a repeat finding due to the timing of the audit process. The Single Audit Report for the fiscal year ended September 30, 2023 was issued on June 14, 2024. Therefore, the same grant reporting process was in place during the majority of fiscal year 2024. As a result, El Proyecto did not have a reasonable opportunity to implement corrective actions for the full fiscal year 2024. Nonetheless, El Proyecto acknowledges the finding and has since taken steps to strengthen monitoring measures to prevent recurrence. El Proyecto implemented the above additional monitoring measures on August 31, 2024, to ensure that preparation and the submission of grant expenditure reports by grant staff are submitted in a timely manner. Person Responsible: Yulin Lin Position of Responsible Party: Controller Completion Date: August 31, 2024 B. Lack of Formal Review of the Quarterly General Ledger Reconciliation Reports by Authorized Personnel Criteria In accordance with FMD Directive No. 24–002, El Proyecto must submit to the City the quarterly General Ledger Reconciliation Report by the end of the month following each quarter. A template form provided by the City includes a preparer and reviewer section. In accordance with El Proyecto’s formal policies and procedures, quarterly and monthly reports must be reviewed and approved by one of the following individuals: • Haimanot Fekado, Program Director • Mary Hernandez, Chief Operating Officer • Corinne Sanchez, Chief Executive Officer Condition In performing reporting compliance testwork, of the four (4) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that all four (4) were not properly signed as reviewed and approved by one of the authorized personnel listed above, as follows: Program Title Contract Number Reporting Quarter Ended Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 December 2023 Hire LA's Youth Program - CalWORKs TANF [North Valley] 144365-1 June 2024 Hire LA's Youth Program - CalWORKs TANF [South Valley and North Valley] 144413-1 June 2024   Cause El Proyecto does not have adequate monitoring controls in place to ensure that reports submitted are properly reviewed and approved by authorized personnel. Effect Lack of formal review and approval may result in errors not being identified and corrected prior to submission to the City. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its monitoring controls to ensure that formal policies and procedures for the review and approval of reports are properly adhered to. Views of Responsible Officials and Planned Corrective Actions Refer to part A above.
Finding 2024-003
Finding F2024-003 – Untimely Submission and Lack of Formal Approval of Reports Assistance Listing Number: 21.027 Assistance Listing Program Title: Coronavirus State and Local Fiscal Recovery Funds Federal Agency: U.S. Department of Treasury Pass Through Entity: City of Los Angeles Community Development Department Federal Award Number: 141412-4, 145794-1, 145801-1 Federal Award Year: July 1, 2022 to December 31, 2024 June 1, 2024 to December 31, 2024 Compliance Requirement: Reporting A. Untimely Submission of Expenditure and Quarterly General Ledger Reconciliation Reports Criteria El Proyecto is required to use the City of Los Angeles (the City) template forms to submit the Expenditure Report and General Ledger Reconciliation Report to the City by the following required submission dates: Type of Report Assistance Listing Number Frequency Submission Deadline Expenditure Report 21.027 Monthly 15th calendar day of each month, with exception - due on the prior business day, if the 15th day should fall on a weekend or holiday General Ledger Reconciliation Report 21.027 Quarterly End of the month following each quarter   Condition In performing reporting compliance testwork, we noted the following: • Of the forty-two (42) monthly Expenditure Reports selected for testwork, we noted that three (3) monthly Expenditure Reports were submitted beyond the due date as follows: Program Title Contract Number Reporting Month Due Date Submission Date Days Late CA For All - Early Childhood Education Student Advancement Project 141412-4 December 2023 January 12, 2024 January 15, 2024 3 Summer HLAY Program- Californians for All [North Valley] 145794-1 August 2024 September 13, 2024 September 26, 2024 13 Summer HLAY Program- Californians for All [South Valley] 145801-1 August 2024 September 13, 2024 September 26, 2024 13 • Of the twelve (12) quarterly General Ledger Reconciliation Reports selected for testwork, we noted that five (5) reports for the quarter ended December 31, 2023 were not submitted within the required timeframe, as follows: Program Title Contract Number Reporting Quarter Ended Due Date Submission Date Days Late CA For All - LA Community College - City Pathways 141304-4 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Youth & Community Harvest Internship Prg. [South Valley and North Valley) 141856-3 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Youth & Community Harvest Internship Prg. [North Valley] 141898-3 December 2023 January 31, 2024 February 14, 2024 14 CA For All - Angeleno Corps - Youth Workforce Program [North Valley] 144504-2 December 2023 January 31, 2024 February 14, 2024 14 LA RISE - Youth Academy - California for All [South Valley] 141558-3 December 2023 January 31, 2024 February 14, 2024 14   Cause El Proyecto does not have adequate monitoring controls in place to ensure that required reports are submitted to the City within the required timeframe. Effect Late submission of required reports will result in noncompliance with the grant and funding agreement. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its controls to ensure compliance with grant reporting requirements, as specified in the award documents. We recommend that El Proyecto develop a tracking schedule for grant report submission due dates, maintain formal documentation of reports submitted, increase management oversight and review procedures, and perform additional staff training, as needed, regarding federal grants reporting requirements. Views of Responsible Officials and Planned Corrective Actions Refer to Finding F2024-002 part A. B. Lack of Formal Review of the Quarterly General Ledger Reconciliation Reports by Authorized Personnel Criteria In accordance with FMD Directive No. 24–002, El Proyecto must submit to the City the quarterly General Ledger Reconciliation Report by the end of the month following each quarter. A template form provided by the City includes a preparer and reviewer section. In accordance with El Proyecto’s formal policies and procedures, quarterly and monthly reports must be reviewed and approved by one of the following individuals: • Haimanot Fekado, Program Director • Mary Hernandez, Chief Operating Officer • Corinne Sanchez, Chief Executive Officer   Condition In performing reporting compliance testwork, we noted that six (6) out of the twelve (12) quarterly General Ledger Reconciliation Reports selected for testwork were not properly signed as reviewed and approved by one of the authorized personnel listed above, as follows: Program Title Contract Number Reporting Quarter Ended Cal For All - LA Community College - City Pathways 141304-4 December 2023 CA For All - Early Childhood Education Student Advancement Project 141412-4 December 2023 CA For All - Youth & Community Harvest Internship Prg. [South Valley and North Valley] 141856-3 December 2023 CA For All - Youth & Community Harvest Internship Prg. [North Valley] 141898-3 December 2023 CA For All - Angeleno Corps - Youth Workforce Program [North Valley] 144504-2 December 2023 LA RISE - Youth Academy - California for All [South Valley 141558-3 December 2023 Cause El Proyecto does not have adequate monitoring controls in place to ensure that reports submitted are properly reviewed and approved by authorized personnel. Effect Lack of formal review and approval by authorized personnel may result in errors not being identified and corrected prior to submission to the City. Questioned Costs Not applicable. Recommendation We recommend that El Proyecto strengthen its monitoring controls to ensure that formal policies and procedures for the review and approval of reports are properly adhered to. Views of Responsible Officials and Planned Corrective Actions Refer to Finding F2024-002 part A.
Finding 2024-004
Finding F2024-004 – Missing approval of timesheet Assistance Listing Number: 93.575 Assistance Listing Program Title: California State Preschool Program (CSPP) Federal Agency: U.S. Department of Labor Pass Through Entity: California Department of Education Federal Award Number: CSPP-3192-0 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: A. Activities allowed / unallowed B. Allowable costs/cost principles Criteria The 2 CFR section 200.303 requires that non-federal entities receiving federal awards establish and maintain internal control over the federal awards that provide reasonable assurance that the non-federal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Condition In performing allowable costs testwork, we noted that 1 out of 25 timesheets selected for testwork was missing evidence of the supervisor’s approval. Cause The timecard missing the supervisor’s approval resulted from a payroll system restriction that prevents supervisors from viewing employee information, including timecards, for employees who are on leave. This is in place to prevent a supervisor from contacting an employee on approved leave and to assure El Proyecto remains compliant with applicable employment laws and regulations while an employee is on approved leave. This system restriction resulted in the supervisor being unable to approve the employee’s timecard. Effect Lack of review and approval of timesheets could lead to unallowed costs being charged to the program. Questioned Costs None. Recommendation We recommend that El Proyecto implement additional controls to ensure the timesheet related to the actual hours worked for individuals who go on medical leave during a pay period are reviewed and approved. This will help ensure that payroll charges are accurate and that only allowable costs are charged to the grant. Views of Responsible Officials and Planned Corrective Actions El Proyecto will update the standard operating procedure for approving timecards while an employee is on leave while remaining compliant with applicable employment laws and regulations. Person Responsible: Ricardo Ornelas Position of Responsible Party: Chief Financial Officer Completion Date: August 31, 2025