Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Subrecipient Monitoring • Other Matters Criteria or specific requirement: CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that a non-federal entity 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 the terms and conditions of the federal award. Condition: Evidence of subrecipient monitoring was not available for the five subrecipients selected for testing. Questioned costs: None. Context: Of the five subrecipients selected for testing, we noted that none of them had proper monitoring in place. Cause: The Association did not have internal control systems in place to adequately monitor subrecipients to ensure that the non-federal entity was in compliance with terms of the federal award. Effect: The Association could pass through federal funding to subrecipients who are not responsible or capable recipients of the funds. Funding could be used by the subrecipients in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement policies and procedures to ensure the performance of subrecipient monitoring and that the monitoring is formally documented and approved. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Suspension and Debarment • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. Non-federal entities are prohibited from contracting with or making subawards under covered transactions that are suspended or debarred. Before entering into a covered transaction, the Association must verify that the subrecipient is not suspended, debarred, or otherwise excluded from participating in the transaction. Condition: Evidence of suspension and debarment procedures was not available for the five subrecipients selected for testing. Questioned costs: None. Context: Of the five subrecipients selected for testing, we noted that none of them had proper suspension and debarment procedures in place. Cause: The Association’s internal controls were not sufficient to ensure that subrecipients/contractors’ suspension and debarment status was documented prior to entering into the contract. Effect: The Association could have entered into an agreement with a subrecipient that was suspended or debarred. Although the Association was able to demonstrate that contracts were not entered into with subrecipients who were suspended or debarred, the absence of documentation performed prior to contract execution presents a risk of noncompliance with applicable procurement regulations. Repeat Finding: N/A.Recommendation: We recommend the Association design controls to ensure an adequate review process is in place to review potential subrecipients, contractors, or vendors to determine they are not suspended or debarred prior to entering into transactions. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries or wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: Evidence of review and approval of timesheets was not available for all seven samples selected for testing. Questioned costs: None. Context: Of the seven samples selected for testing, we noted that none of them had documented the review or approval of timesheets. Cause: The Association did not have internal controls in place to ensure documentation of proper review and approval of timesheets. Effect: The Association could expend federal funding for unallowable activities and costs related to payroll. Funding could be used by employees in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring timesheets to be reviewed and approved, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Reporting • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.303 specifies that recipients must evaluate and monitor the recipient's or subrecipient's compliance with statutes, regulations, and the terms and conditions of Federal awards. This includes semiannual performance reporting requirements. Condition: Evidence of review and approval of semiannual progress reports was not available for items selected for testing. Questioned costs: None. Context: Of the two samples selected for testing, we noted that neither had proper review or approval processes in place. Cause: The Association did not have internal controls in place to ensure proper review and approval of semiannual progress reports prior to submission Effect: The Association risks submitting federal awards reports that are incomplete or not fairly presented in accordance with applicable program requirements. This could lead to inaccuracies in reported activity for the applicable reporting period. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring the review and approval of performance, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Reporting • Other Matters Criteria or specific requirement: The federal award specifies that semiannual progress reports must be submitted within 30 days after the end of the reporting period. Condition: Evidence of untimely submission of semiannual progress reports was noted. Questioned costs: None. Context: Of the two samples selected for testing, we noted that one was not submitted timely. Cause: The Association did not have internal controls in place to ensure timely submission of semiannual progress reports. Effect: Failure to submit required progress reports within the 30 day deadline increases the risk that the Association may be viewed as noncompliant with federal reporting requirements. This noncompliance could affect future funding decisions, including potential delays, additional conditions, or other restrictions imposed by the federal awarding agency. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring the tracking and submission of performance reports within the required timeframe. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Significant Deficiency in Internal Control over Compliance – Allowable Costs • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.430 specifies that charges to federal awards for salaries/wages must be based on records that are supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated. Condition: During testing, we identify payroll charges that were unsupported by timesheets. The error identified during testing indicates that timesheets were not adequately reviewed and approved prior to payroll processing. Questioned costs: None. Context: Of the seven samples selected for testing, we noted that one sample had a variance between the hours reported on the timesheet compared to the hours paid out on the payroll register. Cause: The Association did not have effective internal controls in place to ensure that payroll charges were supported by actual hours worked. Effect: The Association could expend federal funding for unallowable activities and costs related to payroll. Funding could be used by employees in ways that are incompatible with program goals and compliance requirements. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring timesheets and payroll registers to be reviewed and approved, with such review and approval clearly documented. Views of responsible officials: There is no disagreement with the audit finding.
Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Community Project Funding/Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Number and Year: 6-CE1HS52375-07 - 2023 Award Period: September 30, 2023, through September 29, 2026 Type of Finding: • Material Weakness in Internal Control over Compliance – Cash Management – Subrecipient Payments • Other Matters Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, §200.305 specifies that payments to subrecipients must minimize the time between the transfer of funds and their disbursement for program purposes. Subrecipients must be able to demonstrate proper use of funds, maintain records, and be subject to audit. Condition: During testing, it was noted that subrecipient payments were being directly remitted to vendors rather than subrecipients. Questioned costs: None. Context: Of the thirteen samples selected for testing, we noted that nine samples were paid directly to the vendor, rather than the subrecipient. Cause: The Association did not have internal controls in place to ensure subrecipient payments were being remitted directly to the subrecipients. Effect: The Association is noncompliant with federal regulations related to the federal award. Subrecipients do not receive or manage the federal funds, undermining their responsibility for programmatic and financial oversight. Repeat Finding: N/A. Recommendation: We recommend that the Association implement formal policies and procedures requiring remittance of federal funds directly to subrecipients, rather than paying vendors on the subrecipient's behalf. Views of responsible officials: There is no disagreement with the audit finding.