Audit 371449

U.S. Department of Health and Human Services Federal Financial Assistance Listing 93.217 Family Planning Services Project Grant – FPHPA006544 Allowable Costs Significant Deficiency in Internal Control over Compliance and Immaterial Instance of Noncompliance Criteria: 2 CFR 200.303(a) establishes that the auditee must establish and maintain effective internal control over the federal award that provides assurance that the Organization is managing the federal award in compliance with federal statutes, regulations, and conditions of the federal award, including with respect to allowable costs. Condition: In connection with the audit performed, an instance was noted of funds maintained by the entity’s grants division being used to purchase pharmaceutical products that could be used for abortion purposes (as prohibited by 42 CFR section 59.5(a)(5)). The Organization’s policy is to not purchase such products through the entity’s grants division. Cause: The Organization’s internal controls did not detect the error. Effect: There is an increased risk of noncompliance when internal controls are not adequately established, followed, and documented relating to allowable costs requirements. Questioned Costs: None reported. Context/Sampling: Nonstatistical sampling was used for testing this compliance requirement. Sample size was 60 transactions out of 3,500 total program transactions and included $144,939 out of $7,661,509 expenses. There was one error noted during our testing and it was noted that $1,124 of costs charged to the program were used for costs that could be used for unallowable purposes. Repeat Finding from Prior Year(s): No Recommendation: The Organization should improve its processes and controls for identifying costs that do not meet the criteria to be purchased. Views of Responsible Officials: Management agrees with this finding.