2024-003 Information on the Federal Program: Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H80CS08221, H8FCS41317, and H8LCS50906 Criteria Or Specific Requirement: Activities Allowed/Unallowed and Cost Principles: As stated in 45 CFR §75.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. Condition: The Organization duplicated the use of payroll costs for select employees that were allocated to the H80CS08221 award and subsequently to each of the H8FCS41317 and H8LCS50906 awards. Cause: The Organization did not consistently follow the internal control policies and procedures that it has in place to ensure allocation of payroll costs were not duplicated within the final submitted expenses for reimbursement. Effect or Potential Effect: There is a risk of misappropriation or charging unallowable expenditures to the program, resulting in actual and/or potential questioned costs. Questioned Costs: $35,322 Context: During testing of clients allocation to the different grant programs, some employees charged to supplemental funding were already included within the main base grant. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend an individual with knowledge of the federal program review expenditures charged to the federal program and ensure all transactions and allocations are tracked in better detail as/if future supplemental funding is received. These supplemental funds have come to an end so this issue is not expected to continue unless new funding is received. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-004 Information on the Federal Program: Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H80CS08221 and H8LCS50906 Criteria Or Specific Requirement: Cash Management: 45 CFR 75.305 applies to these awards under the reimbursement method. Paragraph (b)(1) of that clause requires that the non-federal entity request reimbursement for (a) only allocable, allowable, and reasonable contract costs that have already been paid, or (b) if the non-federal entity is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid. Condition: The Organization had two drawdowns (one for each H80CS08221 and H8LCS50906) during the fiscal year where cash was received before the expenses were incurred. Cause: The Organization made the draws to confirm they would have sufficient cash to pay employees timely. Effect or Potential Effect: Drawing funds prior to incurring the expense results in noncompliance with program requirements. Questioned Costs: None Context: Out of 23 drawdowns during the fiscal year, two of the drawdowns were received and included expenses that had yet to be incurred. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend management revisit their drawdown review and approval processes and controls. Management should confirm before drawing down cash that requests do not include expenses that have not been incurred. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-005 Information on the Federal Program: Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H80CS08221. Criteria Or Specific Requirement: Period of Performance: As stated in 45 CFR 75.309, the non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award that were authorized by the federal awarding agency or pass-through entity. Condition: The Organization supported the first draw of the H80CS08221 grant with a May 1, 2024 to April 30, 2025 grant period with payroll expenses that were incurred in April 2024, which falls outside the grant period. Cause: The Organization had April payroll costs, but the federal award for this period of time had already been fully drawn down. Effect or Potential Effect: There is a risk of misappropriation or charging expenditures to the incorrect grant period, resulting in actual and/or potential questioned costs. Questioned Costs: $212,000 Context: Management had April payroll costs that needed to be used as support, but the grant that covered this period in time was fully drawn on at this point. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend management improve tracking of what has been drawn down on each federal grant and how much remains on each individual grant period to ensure that expenses drawn against the grant are in the appropriate period. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-006 Information on the Federal Program: Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H80CS08221 Criteria or Specific Requirement: Health centers must comply with federal reporting requirements. Condition: The Organization did not accurately complete its Federal Financial Report, and the Organization did not have data to support certain line items reported on the Uniform Data System (UDS) report filed. The Federal Financial Report was submitted with incorrect data for lines 10l and 10n. Table 8A of the UDS report could not be supported for the required lines. Also, Table 5 of the UDS report was submitted with incorrect visit data for lines 8 and 10a columns B and B2. Cause: There was a lack of detailed review of the Federal Financial Report by someone with knowledge of the reporting requirements, and internal controls were not in place to ensure proper supporting documentation was retained along with the submitted Uniform Data System report. Effect or Potential Effect: Inaccurate filing of reports may result in the federal program not being properly monitored, thus resulting in potential noncompliance with program requirements. Questioned Costs: None Context: Four financial reports were required to be submitted during the year under audit. There were the two lines for the H80CS08221 filing that were incorrect. Only one special report was required to be submitted during the year under audit (UDS). Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-007 Information on the Federal Program: Assistance Listing Number 93.526; Grants for Capital Development in Health Centers; Department of Health and Human Services; Federal Award No. C8ECS44299 Criteria Or Specific Requirement: Activities Allowed/Unallowed and Cost Principles; As stated in 45 CFR 75.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition: It was communicated by Health Resources and Services Administration (HRSA) who administers and monitors grant funding programs that there were costs submitted for reimbursement that were not allowable. Cause: The Organization started the approved capital project for this grant program and there were unforeseen asbestos removal costs that were required to be removed before start of work that were not included in the approved budget. Effect or Potential Effect: Questioned costs and noncompliance with the grant program. Questioned Costs: $258,558 Context: There was a total of $644,584 in grant funding awarded for construction costs under an approved construction plan where costs not approved were drawn on the grant funding. Identification as a Repeat Finding, if Applicable: Not a repeat finding Recommendation: Ensure that program requirements are fully understood and budgets approved are being followed. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-008 Information on the Federal Program: Assistance Listing Number 93.526; Grants for Capital Development in Health Centers; Department of Health and Human Services; Federal Award No. C8ECS44299 Criteria Or Specific Requirement: Matching, Level of Effort, Earmarking; As stated in 45 CFR 75.306, matching or cost-sharing includes the requirement to provide contributions of a specified amount or percentage to match federal awards. Matching may be in the form of allowable costs incurred or in-kind contributions. The specific requirements for matching are unique to each federal program and are listed in the notice of award. Condition: The Organization requested and received cash reimbursement for all construction costs incurred before the end of the grant period, but did not meet the matching requirement that stated for all incurred construction costs 75% would be covered by the Organization up to the full grant award of $644,584. Cause: The Organization incurred costs toward the project, but the project date was coming to an end, so management drew the funds before finishing the project. The Organization did not provide the match to the federal awards drawn. Effect or Potential Effect: The result is questioned costs and noncompliance with the grant program. Questioned Costs: $289,520 Context: There was a total of $644,584 in grant funding awarded for construction costs under an approved construction plan. The funding was towards a total project cost of $2,547,800, which the Organization was required to cover $1,903,216 to receive the remaining $644,584. The draw request would need to be in a proportional percentage share so management could not draw down the funds in full until the their share of the costs were incurred as well. Identification as a Repeat Finding, if Applicable: Not a repeat finding Recommendation: Management should make sure to match their share of the funding before draws are made on the federal grant funds. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-009 Information on the Federal Program: Assistance Listing Number 93.526; Grants for Capital Development in Health Centers; Department of Health and Human Services; Federal Award No. C8ECS44299 Criteria Or Specific Requirement: Procurement: According to 45 CFR 75.303, the non-federal entity must: (a) Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 45 CFR 75.327 Procurement standards, the non-federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. All procurement transactions for the acquisition of property or services required under a federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §75.329. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product, or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §75.329(f). According to 45 CFR 75.329 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The item is available only from a single source; 2. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; Reference Number Finding 3. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 4. After solicitation of a number of sources, competition is determined inadequate. Condition: The Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned Costs: None Context: This project required a construction company / contractor be selected, which would require the procurement policy for selection of this company to be followed. There was no documentation to support why this company was selected for this project, which is also required under their internal procurement policy. Identification as a Repeat Finding, if Applicable: Not a repeat finding Recommendation: We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.
2024-010 Information on the Federal Program: Assistance Listing Number 93.526; Grants for Capital Development in Health Centers; Department of Health and Human Services Criteria Or Specific Requirement: Health centers must comply with federal reporting requirements. Condition: The Organization did not accurately complete all required reports and supplemental information and data the notice of awards specifies within it. Cause: There was a lack of understanding of this project’s requirements around reporting. Since the project was never completed, multiple filing requirements could not be met within the budget period. Effect or Potential Effect: Inaccurate or lack of filing of reports may result in the federal program not being properly monitored, thus resulting in potential noncompliance with program requirements. Questioned Costs: None Context: There were multiple filings that were never filed with HRSA since they required the project to be completed. The project was paused due to cash flow constraints. Management is working with HRSA and has since filed what they could to meet this request and support what they used the funding on. Identification as a Repeat Finding, if Applicable: Not a repeat finding. Recommendation: We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Management is in communication with HRSA due to the reporting filing at project completion not being filed. Views of Responsible Officials and Planned Corrective Actions: See separate auditee document for planned corrective action.