Audit 395488

2025-001 – Significant Deficiency in Internal Control over Financial Reporting – Application of Indirect Cost Rates Criteria: Uniform Guidance requires non‑federal entities to apply the approved indirect cost rate in effect for the period in which the costs are incurred. Under 45 CFR § 75.414(c), negotiated indirect cost rates must be accepted by all HHS awarding agencies unless a deviation is required by statute or approved by the agency head. Predetermined rates, as defined in Appendix IV, Section C.1.b, are not subject to adjustment and must be applied for the entire specified period. Condition: During our testing of indirect costs charged to federal awards, we noted that the Association applied the provisional indirect cost rates that were approved rates under its negotiated indirect cost rate agreement (NICRA) dated February 12, 2024. The Association applied for an extension of those rates in March of 2024. A new agreement was approved in May of 2024 with new predetermined rates that were effective for FY24, FY25, and FY26. The Association continued to apply provisional rates after the predetermined rates had been issued by the cognizant agency. As a result, indirect costs were charged to some federal programs using a higher rate. Cause: The Association's intent was to extend the provisional rates. This was the first time the Association received a predetermined rate. It was also the first time an agreement was received with an effective date for the current fiscal year. The Association did not update its accounting system or internal controls to reflect the issuance of the predetermined indirect cost rate. Staff continued to apply the provisional rates. Effect or potential effect: Indirect costs were overcharged to some federal awards. After identification of the difference in rates and the effective dates, the Association reduced indirect costs amounts charged by approximately $86,000 ($39,912 for 93.224 and $13,151 for 64.055) for the fiscal year under audit. Recommendations: We recommend that the Association implement internal controls to ensure indirect rates are applied in accordance with the negotiated indirect cost rate agreement. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan. 2025-002 – Significant Deficiency in Internal Control over Compliance and Other Matters – Application of Indirect Cost Rates Name of Federal agency: U.S. Department of Health & Human Services U.S. Department of Veterans Affairs Identification of Assistance Listing number and title: 93.224 and 93.527 Health Centers Program Cluster 64.055 Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program Federal award identification number and year: H80CS01129-22, H80CS01129-23, H80CS01129-24 AK-SSG-1461-22 Refer to Finding 2025-001 Questioned Costs: None

2025-003 Material Weakness in Internal Control over Compliance and Noncompliance – Eligibility Name of Federal agency U.S. Department of Veterans Affairs Identification of Assistance Listing number and title: 64.055 Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program Federal award identification number and year: AK-SSG-1461-22 Criteria or specific requirement: Per §201(q)(4) of Hannon Act, an eligible individual is a person at risk of suicide who is one of the following: (1) A Veteran as defined in 38 U.S.C. 101, (2) an individual described in 38 U.S.C. 1720I(b), or (3) an individual described in 38 U.S.C. 1712A(a)(1)(C)(i) through (iv). See Section III. Participant Eligibility for details on how Staff Sergeant Parker Gordon Fox Suicide Prevention Grant Program grantees determine participant eligibility. Condition: To ensure services are provided only to eligible individuals, the Association uses a review checklist outlining the program’s eligibility requirements. We noted that the Association did not retain documentation of this completed checklist. Cause: The controls in place were not operating effectively to ensure eligibility requirements were met or that documentation of eligibility was retained. Effect or potential effect: The Association is out of compliance with the program eligibility requirements. Questioned Costs: None Context: For this program, a sample of eight individuals who participated was tested for compliance with eligibility requirements. Of the eight individuals tested, six did not have documentation retained to support that eligibility requirements were met. Additionally, six did not have documentation demonstrating the use of the eligibility checklist implemented by the Association. The Association was unable to provide any eligibility documentation for two of the sampled individuals. Identification of Repeat Finding: Not applicable. Recommendations: We recommend that, as part of the Association’s internal control structure over compliance with Uniform Guidance, the eligibility checklist be reviewed by more than one individual to verify that all eligibility requirements are met before an individual is approved to participate in the program. Views of Responsible Officials: Management agrees with the finding and has set up a corrective action plan. Refer to Corrective Action Plan.