Federal Program Information: Assistance Listing Number: 93.959 Federal Program Title: Block Grants for Substance Use Prevention, Treatment, and Recovery Services Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004383-W2, PH-004383-W1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Assistance Listing Number: 93.531 Federal Program Title: Community Transformation Grants and National Dissemination and Support for Community Transformation Grants Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004921 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per the Uniform Guidance, 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the actual work performed. Budget estimates may be used for interim purposes, but must be supported by contemporaneous documentation, reconciled to actual time worked, and adjusted as necessary. Additionally, 2 CFR §200.403(d) requires that costs be allocated to federal awards in accordance with the relative benefits received. The OMB Compliance Supplement (Part 6 – Internal Control and Part 3 – Compliance Requirements) reinforces that payroll and nonpayroll costs must be supported by reliable records and allocated using reasonable and consistent methodologies. Condition: During the testing of payroll costs, we noted that for Federal Assistance Listings 93.959 and 93.531, payroll charges in 4 out of 40 samples and 2 out of 11 samples, respectively, were based on budgeted rates rather than actual hours worked. Supporting documentation (e.g., timesheets or equivalent records) was not used to substantiate the final charges, and adjustments to actual time and effort were not made. For nonpayroll costs, we identified that in 3 out of 40 samples (93.959) and 5 out of 18 samples (93.531), costs were not allocated using a consistent and reasonable basis across all benefiting programs. Instead, the Organization either charged costs by maximizing the allowable budget under each program or have inadvertently used an incorrect basis due to oversight. Cause: The deficiencies occurred because the Organization’s internal controls were not sufficiently designed or implemented to ensure compliance with Uniform Guidance requirements. Specifically, payroll costs were charged to federal awards based on budget estimates rather than actual time and effort supported by records such as timesheets, and nonpayroll costs were either maximized to the budget or were allocated using an incorrect basis. These control gaps in review and documentation resulted in costs being charged to federal programs in a manner inconsistent with Allowable Costs/Cost Principles. Effect: As a result of these deficiencies, federal program expenditures reported to the awarding agency were misstated. Our testing identified questioned costs across both programs, consisting of payroll and nonpayroll overallocations. These represent unallowable costs under Uniform Guidance and may be subject to disallowance. Inaccurate cost allocations increase the risk of noncompliance with federal requirements, could lead to repayment of disallowed costs, and may negatively affect future federal funding decisions. Questioned Costs: Known and extrapolated costs for payroll and nonpayroll costs for Federal Assistance Listings 93.959 and 93.531 are summarized below. These amounts represent the overallocation to the programs, representing unallowable costs under Uniform Guidance. Recommendation: We recommend that the Organization strengthen its internal controls over payroll and nonpayroll cost allocations by requiring time and effort records to support all payroll charges to federal awards, ensuring nonpayroll costs are allocated using documented and equitable methodologies, and performing regular reconciliations of budgeted amounts to actual costs. In addition, staff responsible for preparing and reviewing cost allocations should receive training on Uniform Guidance requirements to ensure accuracy, compliance, and consistency across all federal programs. Views of responsible officials and planned corrective actions: For payroll, procedures will be implemented to ensure that payroll costs allocated to federal grants are supported by actual time. For nonpayroll, procedures will be enhanced to ensure proper allocation of nonpayroll costs to federal grants. Allocations will be reviewed and monitored on a monthly and quarterly basis to prevent misallocation and ensure compliance with the Uniform Guidance. Personnel responsible for implementation: Executive Director Christy Zamani and Beaulieu Accountancy Corporation. Date of implementation: August 5, 2025
Federal Program Information: Assistance Listing Number: 93.959 Federal Program Title: Block Grants for Substance Use Prevention, Treatment, and Recovery Services Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004383-W2, PH-004383-W1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Assistance Listing Number: 93.531 Federal Program Title: Community Transformation Grants and National Dissemination and Support for Community Transformation Grants Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004921 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per the Uniform Guidance, 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the actual work performed. Budget estimates may be used for interim purposes, but must be supported by contemporaneous documentation, reconciled to actual time worked, and adjusted as necessary. Additionally, 2 CFR §200.403(d) requires that costs be allocated to federal awards in accordance with the relative benefits received. The OMB Compliance Supplement (Part 6 – Internal Control and Part 3 – Compliance Requirements) reinforces that payroll and nonpayroll costs must be supported by reliable records and allocated using reasonable and consistent methodologies. Condition: During the testing of payroll costs, we noted that for Federal Assistance Listings 93.959 and 93.531, payroll charges in 4 out of 40 samples and 2 out of 11 samples, respectively, were based on budgeted rates rather than actual hours worked. Supporting documentation (e.g., timesheets or equivalent records) was not used to substantiate the final charges, and adjustments to actual time and effort were not made. For nonpayroll costs, we identified that in 3 out of 40 samples (93.959) and 5 out of 18 samples (93.531), costs were not allocated using a consistent and reasonable basis across all benefiting programs. Instead, the Organization either charged costs by maximizing the allowable budget under each program or have inadvertently used an incorrect basis due to oversight. Cause: The deficiencies occurred because the Organization’s internal controls were not sufficiently designed or implemented to ensure compliance with Uniform Guidance requirements. Specifically, payroll costs were charged to federal awards based on budget estimates rather than actual time and effort supported by records such as timesheets, and nonpayroll costs were either maximized to the budget or were allocated using an incorrect basis. These control gaps in review and documentation resulted in costs being charged to federal programs in a manner inconsistent with Allowable Costs/Cost Principles. Effect: As a result of these deficiencies, federal program expenditures reported to the awarding agency were misstated. Our testing identified questioned costs across both programs, consisting of payroll and nonpayroll overallocations. These represent unallowable costs under Uniform Guidance and may be subject to disallowance. Inaccurate cost allocations increase the risk of noncompliance with federal requirements, could lead to repayment of disallowed costs, and may negatively affect future federal funding decisions. Questioned Costs: Known and extrapolated costs for payroll and nonpayroll costs for Federal Assistance Listings 93.959 and 93.531 are summarized below. These amounts represent the overallocation to the programs, representing unallowable costs under Uniform Guidance. Recommendation: We recommend that the Organization strengthen its internal controls over payroll and nonpayroll cost allocations by requiring time and effort records to support all payroll charges to federal awards, ensuring nonpayroll costs are allocated using documented and equitable methodologies, and performing regular reconciliations of budgeted amounts to actual costs. In addition, staff responsible for preparing and reviewing cost allocations should receive training on Uniform Guidance requirements to ensure accuracy, compliance, and consistency across all federal programs. Views of responsible officials and planned corrective actions: For payroll, procedures will be implemented to ensure that payroll costs allocated to federal grants are supported by actual time. For nonpayroll, procedures will be enhanced to ensure proper allocation of nonpayroll costs to federal grants. Allocations will be reviewed and monitored on a monthly and quarterly basis to prevent misallocation and ensure compliance with the Uniform Guidance. Personnel responsible for implementation: Executive Director Christy Zamani and Beaulieu Accountancy Corporation. Date of implementation: August 5, 2025
Federal Program Information: Assistance Listing Number: 93.959 Federal Program Title: Block Grants for Substance Use Prevention, Treatment, and Recovery Services Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004383-W2, PH-004383-W1 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Assistance Listing Number: 93.531 Federal Program Title: Community Transformation Grants and National Dissemination and Support for Community Transformation Grants Federal Agency: U.S. Department of Health and Human Services Passed Through Entity: County of Los Angeles Public Health Federal Award Number: PH-004921 Federal Award Year: July 1, 2023 to June 30, 2024 Compliance Requirement: Allowable Costs/Cost Principles Criteria: Per the Uniform Guidance, 2 CFR §200.430(i), charges to federal awards for salaries and wages must be based on records that accurately reflect the actual work performed. Budget estimates may be used for interim purposes, but must be supported by contemporaneous documentation, reconciled to actual time worked, and adjusted as necessary. Additionally, 2 CFR §200.403(d) requires that costs be allocated to federal awards in accordance with the relative benefits received. The OMB Compliance Supplement (Part 6 – Internal Control and Part 3 – Compliance Requirements) reinforces that payroll and nonpayroll costs must be supported by reliable records and allocated using reasonable and consistent methodologies. Condition: During the testing of payroll costs, we noted that for Federal Assistance Listings 93.959 and 93.531, payroll charges in 4 out of 40 samples and 2 out of 11 samples, respectively, were based on budgeted rates rather than actual hours worked. Supporting documentation (e.g., timesheets or equivalent records) was not used to substantiate the final charges, and adjustments to actual time and effort were not made. For nonpayroll costs, we identified that in 3 out of 40 samples (93.959) and 5 out of 18 samples (93.531), costs were not allocated using a consistent and reasonable basis across all benefiting programs. Instead, the Organization either charged costs by maximizing the allowable budget under each program or have inadvertently used an incorrect basis due to oversight. Cause: The deficiencies occurred because the Organization’s internal controls were not sufficiently designed or implemented to ensure compliance with Uniform Guidance requirements. Specifically, payroll costs were charged to federal awards based on budget estimates rather than actual time and effort supported by records such as timesheets, and nonpayroll costs were either maximized to the budget or were allocated using an incorrect basis. These control gaps in review and documentation resulted in costs being charged to federal programs in a manner inconsistent with Allowable Costs/Cost Principles. Effect: As a result of these deficiencies, federal program expenditures reported to the awarding agency were misstated. Our testing identified questioned costs across both programs, consisting of payroll and nonpayroll overallocations. These represent unallowable costs under Uniform Guidance and may be subject to disallowance. Inaccurate cost allocations increase the risk of noncompliance with federal requirements, could lead to repayment of disallowed costs, and may negatively affect future federal funding decisions. Questioned Costs: Known and extrapolated costs for payroll and nonpayroll costs for Federal Assistance Listings 93.959 and 93.531 are summarized below. These amounts represent the overallocation to the programs, representing unallowable costs under Uniform Guidance. Recommendation: We recommend that the Organization strengthen its internal controls over payroll and nonpayroll cost allocations by requiring time and effort records to support all payroll charges to federal awards, ensuring nonpayroll costs are allocated using documented and equitable methodologies, and performing regular reconciliations of budgeted amounts to actual costs. In addition, staff responsible for preparing and reviewing cost allocations should receive training on Uniform Guidance requirements to ensure accuracy, compliance, and consistency across all federal programs. Views of responsible officials and planned corrective actions: For payroll, procedures will be implemented to ensure that payroll costs allocated to federal grants are supported by actual time. For nonpayroll, procedures will be enhanced to ensure proper allocation of nonpayroll costs to federal grants. Allocations will be reviewed and monitored on a monthly and quarterly basis to prevent misallocation and ensure compliance with the Uniform Guidance. Personnel responsible for implementation: Executive Director Christy Zamani and Beaulieu Accountancy Corporation. Date of implementation: August 5, 2025