Audit 377221

Finding 2025-001: Cash Management Federal Agency-U.S. Department of Health and Human Services ALN: 93.297 and 93.217 Criteria: 2 CFR 200.305(b) states for non-Federal entities other than states, payments methods 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 Council receives federal money to provide teen pregnancy prevention and family planning services. In order to carry out those services, the Council enters into sub-awards with providers throughout its service territory. Providers submit their invoices to the Council monthly, and the Council submits a request for payment to the grantor for reimbursement. The audit revealed that the non-federal entity did not consistently minimize the time between the transfer of federal funds from the U.S. Treasury and the disbursement of those funds for program purposes. Questioned Costs: None. Context: The Council provided services under grants received directly from the U.S. Department of Health and Human Services. In order to provide the services, sub-awards are made with providers within the Council’s service territory. Providers were to be paid based off the invoices submitted to the Council. The Council submits a request for payment to the U.S. Department of Health and Human Services and once the funds are received, the Council is to pay its providers in a timely manner. Cause: The finance department initiated drawdowns based on projected expenditures rather than actual, immediate disbursement needs, leading to early receipt and holding of funds. Effect: Holding federal funds for extended periods may result in noncompliance with federal cash management regulations, potential interest liabilities, and reduced efficiency in program execution. Repeat Finding: This is a repeat finding. Recommendation: We recommend updates in the payment process to ensure that all providers are paid timely after receipt of grant funds. Management Response: We acknowledge the finding and take full responsibility for ensuring compliance with federal cash management requirements. The delay in provider payments during the audit period was primarily due to a temporary halt in government disbursements, which created uncertainty and the potential for funding gaps. To prevent recurrence, we have implemented the following corrective actions: • Payment Process Update: Provider disbursements are now prioritized immediately upon receipt of federal funds. • Compliance Calendar: A centralized calendar with automated reminders ensures timely processing of all payments. • Contingency Planning: A reserve allocation for provider payments has been established to mitigate risks associated with government-related payment interruptions.

Finding 2025-002: Untimely Submission of Data Collection Form Federal Agency-U.S. Department of Health and Human Services ALN: 93.297 and 93.217 Criteria: 2 CFR 200.512(a) states the auditee must submit the completed Data Collection Form and reporting package to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The auditee did not submit the Data Collection Form and reporting package to the Federal Audit Clearinghouse within the required timeframe. The June 30, 2024 audit report was dated November 15, 2024, but the Data Collection Form and reporting package was not submitted until January 6, 2025, exceeding the 30-day window. Questioned Costs: None. Context: The Council has spent greater than $750,000 of direct and indirect federal funds during its fiscal year, As a result, the Council is required to have an audit conducted under Uniform Guidance and upon completion of the audit is required to submit a reporting package to the Federal Audit Clearing House. Cause: The delay was due to internal administrative oversight and lack of a formalized process to track and ensure timely submission of the Data Collection Form and reporting package. Effect: Failure to submit the Data Collection Form and reporting package timely may result in noncompliance with federal requirements and could impact future federal funding or trigger additional oversight. Repeat Finding: This was not a repeat finding. Recommendation: We recommend the auditee implement a formal tracking system and assign responsibility to specific personnel to ensure timely submission of the Data Collection Form and reporting package in accordance with 2 CFR 200.512(a). Management Response: We acknowledge the finding and take full responsibility for ensuring timely submission of the Data Collection Form and reporting package in accordance with 2 CFR 200.512(a). The delay was due to internal administrative oversight and the absence of a formalized process to track submission deadlines. To prevent recurrence, we have implemented two key measures: • Compliance Calendar: A centralized compliance calendar with automated reminders has been established to ensure all reporting deadlines are met promptly. • Alternate Signatory: Our Executive Vice President is now authorized to serve as an alternate signer for the reporting package in the event the CEO is unavailable, ensuring that submission is never delayed due to signature requirements. These actions strengthen our internal controls and ensure full compliance with federal reporting requirements going forward.