Audit 400141

Department of Health and Human Services and Department of Treasury 2025-001 Coronavirus State and Local Fiscal Recovery Funds (Allowable Costs, Period of Performance, and Procurement) and Congressional Directives (Procurement) Criteria: Under 2 CFR 200.302 and 200.403, non-federal entities must maintain records sufficient to demonstrate that costs charged to Federal Awards are allowable, properly allocated and adequately supported. Under 2 CFR 200.309 costs must provide documentation that costs were incurred within the approved period of performance. Additional 2 CFR 200.317-200.327 requires entities to maintain documentation sufficient to support the procurement process for the use of Federal Awards. Condition: The Center did not maintain adequate documentation to support compliance with Federal requirements related to allowable costs, period of performance, and procurement standards. Allowable Costs – The Center provided grant allocation worksheets that show individual employees hours charged to the federal awards; however, the grant allocation worksheets did not include any employee or supervisor signatures to attest the hour allocations were accurate. Additionally, certain invoices had a portion of the total costs allocated to the federal award, but the Center could not substantiate the basis for the allocation. Period of Performance – The Center had charged costs to the federal award for costs incurred outside the period of performance as defined by the grant agreement but could not provide documentation that supported the grantor allowed charges to be made for costs incurred outside that period. Procurement – The Center entered a contract with a Company under the Simple Acquisition threshold for procurement but was unable to provide documentation that quotes were obtained from multiple qualified vendors. Cause: The Center did not have effective controls in place to ensure proper documentation was obtained and retained to support compliance with the federal award. Effect: Without adequate supporting documentation the Organization is unable to demonstrate its compliance with all requirements of the federal award. Questioned Costs: $175,389 out of $2,453,443 of total expenditures tested. Auditor’s Recommendation: We recommend The Center review and revise its documentation policies and procedures to ensure that compliance is met with regards to federal awards. Management Response: Management agrees with the finding and has collaborated with grant personnel to implement standardized personnel activity reporting and cost allocation documentation for all federal grants. The Center will strengthen controls to ensure that only allowable costs incurred within the approved grant period are charged to federal awards. In addition, procurement procedures have been revised to ensure compliance with 2 CFR $$ 200.317-200.327. Corrective actions have been implemented or are in progress and apply to all federal awards moving forward beginning in FY2026.