Audit 368602

Finding 2024-002 Material Weakness in Controls over Compliance and Material Noncompliance – Allowable Costs Federal Program: 93.137 Community Programs to Improve Minority Health Year: 2024 Federal Agency: Department of Health and Human Services Criteria – In accordance with 2 CFR 200.403 and 2 CFR 200.302 (b)(3) costs charged to the federal program should be adequately supported by source documentation. Condition – Payroll expenses for one employee were inadvertently recorded twice for the fiscal year, resulting in an overstatement of personnel costs charged to the federal award. Further, indirect costs were charged in excess of the budgeted and approved amount under the grant agreement. Cause – The capturing of payroll expenses to the federal grant was not set up appropriately in the general ledger system which led management to record the above entries manually to the grant program. The manual process led to the duplication of the payroll journal entry and the overcharging of the indirect cost. Perspective – There are six key personnel who charged payroll to the federal program. Out of the six personnel one individual’s payroll was incorrectly duplicated. This resulted in a $30,291 over charge to the grant. Further, from an indirect cost perspective, the grant budget limited indirect costs to $18,296, however a total of $70,965 was charged to the grant, resulting in a $52,669 overcharge. Questioned Cost - $82,960 Effect – Overcharging expenses may result in the granting agency withholding future funding for this grant. Recommendation – Ensure the grant is appropriately set up in the system to capture the relevant expenses. Management also needs to have a more precise control to ensure no expense items are duplicated and are within budget. View of Responsible Officials – See Corrective Action Plan

Finding 2024-003 Material Weakness in Controls over Compliance and Material Noncompliance – Cash Management Federal Program: 93.137 Community Programs to Improve Minority Health Year: 2024 Federal Agency: Department of Health and Human Services Criteria – In accordance with 2 CFR 200.305 when non-federal entities are funded under the reimbursement method, expenditures should be incurred prior to the date of the reimbursement request. Condition/Perspective – There were four drawdowns made in relation to the fiscal year 2024 expenses for the grant. For two out of the four drawdowns, management erroneously drew down in excess of the expenses incurred. Cause – When requesting for drawdowns management erroneously used the cumulative expenses in the underlying spreadsheet rather than the periodic expenses which led to draw downs to be in excess of the expenses. Questioned Cost - $732,156 was over drawn. Effect – Drawing down in excess of the expenses incurred may result in the granting agency withholding future funding for this grant. Recommendation – Implement a more precise control to ensure that the underlying expense details that are used to make the drawdowns made are accurately calculated. View of Responsible Officials - See Corrective Action Plan

Finding 2024-004 Significant Deficiency in Controls over Compliance and Noncompliance - Reporting Federal Program: 93.137 Community Programs to Improve Minority Health Year: 2024 Federal Agency: Department of Health and Human Services Criteria - Under the requirements of the Federal Funding Accountability and Transparency Act, direct recipients of grants or cooperative agreements are required to report first-tier subawards of $30,000 or more to the Federal Funding accountability and Transparency Act Subaward Reporting System (FSRS). Condition/Context - A total of $910,157 of costs was passed through to selected sub recipients during the year and the subawards were not reported in the FSRS. Cause - Grant Management failed to report the first-tier subrecipients in the FSFR. Effect - Failure to report subaward data could potentially constitute an event of noncompliance with the award contract, which may result in the early termination of the grant award, non-reimbursement of grant funding, or cessation of future funding. Questioned Cost - None. Recommendations - Management should ensure that they have a mechanism for reporting subaward data completely and accurately in the FSRS on a timely basis. View of Responsible Officials - See Corrective Action Plan.