2025-002 Allowable Costs/Cost Principles (repeat of finding 2024-004) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E sets for the specific cost principles to be followed when expending federal funds. Condition The Organization claimed the same expenditure for reimbursement under multiple grants. The Organization did not maintain sufficient supporting records for all of the expenditures reimbursed with federal awards. This finding appears to be a systemic problem. Cause The Organization’s internal controls did not include proper review of transactions charged to federal programs to ensure that the goods or services received were supported by the appropriate documentation. In addition, expenditures were not properly tracked by grant, which allowed for the same costs to be charged to multiple awards. Effect The Organization may allocate unallowable costs to the federal awards. Questioned Costs $61,155 Context In a sample of forty transactions tested, three were found to be for expenditures that were not consistent with the allowable cost principles. We identified $36,855 of expenditures for which the Organization could not provide supporting documentation, and $24,300 of expenditures that had already been charged to another program or award. Recommendation We recommend the Organization implement a system to track and document all expenditures of federal awards in the financial management system and that supporting documentation for all federal expenditures, whether payroll or procurement transactions, be maintained. In addition, we recommend the Organization implement controls sufficient to monitor the system to ensure it is properly designed and effective. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-002 Allowable Costs/Cost Principles (repeat of finding 2024-004) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards Subpart E sets for the specific cost principles to be followed when expending federal funds. Condition The Organization claimed the same expenditure for reimbursement under multiple grants. The Organization did not maintain sufficient supporting records for all of the expenditures reimbursed with federal awards. This finding appears to be a systemic problem. Cause The Organization’s internal controls did not include proper review of transactions charged to federal programs to ensure that the goods or services received were supported by the appropriate documentation. In addition, expenditures were not properly tracked by grant, which allowed for the same costs to be charged to multiple awards. Effect The Organization may allocate unallowable costs to the federal awards. Questioned Costs $61,155 Context In a sample of forty transactions tested, three were found to be for expenditures that were not consistent with the allowable cost principles. We identified $36,855 of expenditures for which the Organization could not provide supporting documentation, and $24,300 of expenditures that had already been charged to another program or award. Recommendation We recommend the Organization implement a system to track and document all expenditures of federal awards in the financial management system and that supporting documentation for all federal expenditures, whether payroll or procurement transactions, be maintained. In addition, we recommend the Organization implement controls sufficient to monitor the system to ensure it is properly designed and effective. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-003 Period of Performance (repeat of finding 2024-005) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.403(h) requires that costs be incurred in the approved budget period for the applicable awards and Title 2 CFR 200.403(e) requires that those costs be determined according to generally accepted accounting principles (GAAP). Condition The Organization’s federal expenditures include costs for goods and/or services outside of the approved budget periods for the awards. Cause The Organization’s internal controls over compliance did not include consideration of when the goods were received or services were performed compared to the budget periods for the awards. Lack of understanding of GAAP and the requirements of accrual basis accounting allowed expenditures outside of the applicable budget periods to be claimed as current federal expenditures. Effect The Organization may allocate unallowable costs to the federal awards. Questioned Costs $194,142 (of which $61,155 was previously reported in finding 2025-002 above). Context In a sample of forty transactions, we noted five included expenditures for goods or services that were not provided in the current period. $117,887 of expenditures charged to the program were for goods or services related to future periods. $76,255 of expenditures charged to the program were for goods or services related to previous periods. Recommendation We recommend management personnel authorized to approve expenditures of federal awards be limited to those who have a basic understanding of GAAP and the relationship between the accrual basis of accounting and the period of performance requirements. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-003 Period of Performance (repeat of finding 2024-005) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684, H8GC48547, H8LCS51197 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.403(h) requires that costs be incurred in the approved budget period for the applicable awards and Title 2 CFR 200.403(e) requires that those costs be determined according to generally accepted accounting principles (GAAP). Condition The Organization’s federal expenditures include costs for goods and/or services outside of the approved budget periods for the awards. Cause The Organization’s internal controls over compliance did not include consideration of when the goods were received or services were performed compared to the budget periods for the awards. Lack of understanding of GAAP and the requirements of accrual basis accounting allowed expenditures outside of the applicable budget periods to be claimed as current federal expenditures. Effect The Organization may allocate unallowable costs to the federal awards. Questioned Costs $194,142 (of which $61,155 was previously reported in finding 2025-002 above). Context In a sample of forty transactions, we noted five included expenditures for goods or services that were not provided in the current period. $117,887 of expenditures charged to the program were for goods or services related to future periods. $76,255 of expenditures charged to the program were for goods or services related to previous periods. Recommendation We recommend management personnel authorized to approve expenditures of federal awards be limited to those who have a basic understanding of GAAP and the relationship between the accrual basis of accounting and the period of performance requirements. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-004 Cash Management (repeat of finding 2024-008) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition The Organization did not maintain supporting documentation for cash draws made from the Payment Management System (PMS). This finding appears to be a systemic problem. Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs None noted. Context Out of seven draws tested, the Organization was not able to provide any supporting documentation or expenditure detail to support two draws. Due to this, we were unable to verify the time elapsing between the funds transfer from the PMS system and the disbursement of funds. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures to be paid or reimbursed. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-004 Cash Management (repeat of finding 2024-008) Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.305 requires that organizations “must minimize the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the disbursement by the non-federal entity whether the payment is made by electronic funds transfer, or issuance or redemption of checks, warrants, or payment by other means.” Condition The Organization did not maintain supporting documentation for cash draws made from the Payment Management System (PMS). This finding appears to be a systemic problem. Cause The Organization’s internal controls over cash management and PMS draws does not include procedures for non-payroll expenditures. As a result, draws were made without supporting documentation. In addition, the Organization did not always maintain documentation of the payroll calculations supporting draws, as required by company policy. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs None noted. Context Out of seven draws tested, the Organization was not able to provide any supporting documentation or expenditure detail to support two draws. Due to this, we were unable to verify the time elapsing between the funds transfer from the PMS system and the disbursement of funds. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation along with the supporting invoices and payroll reports supporting the expenditures to be paid or reimbursed. In addition, we recommend that the listing of expenditures be reviewed by qualified personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-005 Suspension and Debarment Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transaction (procurement contracts, purchase orders or agreements greater than or equal to $25,000) with persons or vendors. Condition The Organization entered into covered transactions without verification that vendors/contractors were not excluded from doing business with the federal government. This finding appears to be a systemic problem Cause The Organization did not follow its policy to verify that persons or entities contracted with were not listed on the exclusions list prior to entering into the contracts or purchase agreements. Effect The Organization may have entered into covered transactions with persons who have been suspended or debarred. Questioned Costs None noted. Context Out of four covered transactions selected, only one included evidence that an exclusion check was performed prior to signing the contract. Exclusions checks were performed after documentation was requested by the auditor and no excluded vendors were identified. Recommendation We recommend the Organization implement controls requiring that exclusion checks be performed prior to signing any contracts or purchase orders or agreements that are covered transactions. This exclusion check should be maintained as part of the supporting documentation for the expenditure. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.
2025-005 Suspension and Debarment Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00513, H8FCS41684 Criteria [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transaction (procurement contracts, purchase orders or agreements greater than or equal to $25,000) with persons or vendors. Condition The Organization entered into covered transactions without verification that vendors/contractors were not excluded from doing business with the federal government. This finding appears to be a systemic problem Cause The Organization did not follow its policy to verify that persons or entities contracted with were not listed on the exclusions list prior to entering into the contracts or purchase agreements. Effect The Organization may have entered into covered transactions with persons who have been suspended or debarred. Questioned Costs None noted. Context Out of four covered transactions selected, only one included evidence that an exclusion check was performed prior to signing the contract. Exclusions checks were performed after documentation was requested by the auditor and no excluded vendors were identified. Recommendation We recommend the Organization implement controls requiring that exclusion checks be performed prior to signing any contracts or purchase orders or agreements that are covered transactions. This exclusion check should be maintained as part of the supporting documentation for the expenditure. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.