Audit 396336

Allowable Activities and Costs Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Cluster - Behavioral Health Expansion Grant Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number: H8NCS54238-01-00 Award Periods: September 1, 2024 – August 31, 2025 Type of Finding: Immaterial noncompliance and significant deficiency in internal control over compliance Criteria: A grantee's system of internal control should include processes to review after-the-fact interim charges made to a federal award based on budget estimates. 45 CFR 75.430(i)(1). Condition: During the testing of expenses charged to the grant, it was noted that the same expense was charged to the grant as part of two separate grant draws. Questioned Costs: $7,629. Context: The above condition impacted one (1) of sixty (60) transactions selected for testing. However, subsequent to year end and prior to the close of the grant period, the Organization identified the overdraw and corrected the error by reducing amounts requested in a subsequent draw. Cause: The Organization had inconsistent methods for tracking general disbursements charged to the grant and did not implement procedures to verify whether expenditures had already been included in prior draw requests. Effect: The Organization may inadvertently overcharge the grant for general disbursements which could result in noncompliance with federal grant requirements. Repeat Finding: No. Recommendation: We recommend the Organization implement a comprehensive and thorough process to review all payroll and non-payroll expenses charged to the grant prior to submitting the drawdown request to HRSA and implement a consistent process for identifying the specific expenses being charged to each grant.

Period of Performance Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number: H80CS00824-24 Award Periods: May 1, 2025 – April 30, 2026 Type of Finding: Immaterial noncompliance and significant deficiency in internal control over compliance Criteria: Per 2 CFR 200.309, federal award recipients may charge to the federal award only allowable costs incurred during the approved period of performance. The auditee is responsible for establishing and maintaining effective internal control procedures to ensure expenditures charged to federal programs are incurred within the approved grant period. Condition: We noted the Organization did not have a formal process to review expenditures charged to federal programs to ensure they were incurred within the applicable period of performance. Specifically, management did not maintain documentation or a monitoring process to verify that expenditures recorded near the beginning or end of the grant period were incurred within the authorized period of performance. Questioned Costs: $6,504 Context: Seven (7) and of the eleven (11) transactions selected for testing related to expenditures incurred outside the period or performance. Cause: The Organization did not have a formal policy and procedure to closely review the expense charged to the grant during the first and last months of the grant period. Effect: Without adequate controls over period of performance, there is an increased risk that expenditures could be charged to federal awards outside the approved grant period. Repeat Finding: No. Recommendation: We recommend the Organization implement a comprehensive and thorough process to review and monitor expenditures charged near the beginning and end of grant periods to ensure the expenditures incurred are within the authorized federal award grant period.

Reporting Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Centers Cluster Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number: H80CS00824-23-11 Award Periods: May 1, 2024 – April 30, 2025 Type of Finding: Significant deficiency in internal control over compliance Criteria: The Organization is required to submit an annual Uniform Data System (UDS) report to HRSA that is complete, accurate, and supported by underlying records. Per federal requirements, the auditee is responsible for establishing and maintaining effective internal controls over compliance, including controls to ensure the accuracy and completeness of reports submitted to federal agencies. Condition: During our audit procedures, we noted the Organization did not have adequate internal controls related to maintaining supporting documentation for all of the key tables included within the UDS report. Questioned Costs: None. Context: The Organization submitted its annual UDS report, which includes multiple data tables derived from various systems and sources, including billing, electronic health records, and financial records. During our testing, the Organization was not able to provide the necessary documentation to support the amounts reported in Table 8A Lines 1 & 3. Cause: The condition appears to be due to turnover within the finance department and not maintaining the necessary supporting documentation used to prepare the UDS report as filed. Effect: Without adequate controls over reporting, there is an increased risk that reports submitted to the federal awarding agency may be inaccurate or incomplete, which could impact funding, compliance, and federal oversight. Repeat Finding: No. Recommendation: We recommend the Organization implement a comprehensive and thorough process to review reports prior to submission including the reconciliations and underlying records that support the amounts in the report.