Audit 403260

2025-002 Cash Management Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster Award Numbers H80CS00540-23, H8GCS48292, H8LCS51370 Criteria Title 2 CFR 200.305 requires that organizations “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.” [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Condition The Organization was not able to provide documentation for certain cash draws made from the Payment Management System (PMS) to show that expenditures were incurred or expected to be incurred within a minimal amount of time. This finding appears to be a systemic issue. Cause The Organization did not always maintain documentation of the qualifying expenditures used to support amounts drawn from the payment management system. Effect The Organization may not have minimized the timing between draws from the PMS and the related payments for expenditures incurred as required. Questioned Costs $0. Although the auditee did not retain documentation of the expenditures supporting certain draws, our testing indicated that the total program expenditures for the period were sufficient to cover all draws of federal funds under the program in the period. Context For two of six draws tested, the Organization was not able to provide documentation to show that expenses were incurred prior to or within a reasonable time after the draws. Recommendation We recommend the Organization implement controls requiring all draws from the PMS to be based on detailed reports of expenditures claimed for reimbursement and retain this documentation, along with the supporting invoices and payroll reports supporting the expenditures. In addition, we recommend that the listing of expenditures be reviewed by appropriate personnel to ensure that the expenditures claimed are allowable and cash payments for the expenditures are made before the date of the draw or within a reasonable time after the draw. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.

2025-003 Procurement Program Information Federal Organizations U.S Department of Health and Human Services U.S Department of Agriculture (passed through California Department of Public Health) Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children Award Numbers H80CS00540-23, H8GCS48292, H8LCS51370, 22-10237 A05 Criteria Entities receiving federal awards must have and use their documented procurement policies. Title 2 CFR 200.320 outlines the acceptable methods of procurement and establishes the maximum thresholds allowed. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require price or rate quotations to be obtained from an adequate number of qualified sources. [X] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Condition The Organization did not maintain documentation that competitive price quotations or bids performed, as required by policy and the Uniform Guidance for purchases above the micro purchase threshold. This finding appears to be a systemic issue. Cause Management did not follow its established procurement policy and documentation was not maintained evidencing its compliance with the policy. Effect The Organization may overpay for goods and services due to selecting vendors without appropriate consideration of the competitive bids and cost analysis. Questioned Costs $0. Although the auditee did not retain documentation of required competition (such as bids or price quotes) for contracts, as required under the entity’s written procurement procedures and the Uniform Guidance procurement standards in 2 CFR part 200, our testing indicated that the costs charged to the federal program under this contract were otherwise allowable under the applicable cost principles, adequately supported by other documentation, and reasonable in amount. Context We tested procurement transactions from each program. Of these transactions, four of thirteen tested under assistance listing numbers 93.224 and 93.527, and six of twenty-five tested under assistance listing number 10.557, were missing evidence of proper competitive procurement procedures being performed. Recommendation We recommend the Organization retain supporting documentation of competitive procurement for all transactions greater than the micro-purchase threshold when the expenditures will be charged to a federal award. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.

2025-004 Suspension and Debarment Program Information Federal Organizations U.S Department of Health and Human Services U.S Department of Agriculture (passed through California Department of Public Health) Assistance Listing Numbers 93.224 & 93.527 Health Center Program Cluster 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children Award Numbers H80CS00540-23, H8GCS48292, H8LCS51370, 22-10237 A05 Criteria Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transactions (procurement contracts, purchase orders, or agreements greater than or equal to $25,000) with persons or vendors. [ ] Compliance Finding [ ] Significant Deficiency [X] Material Weakness Condition The Organization entered into covered transactions without verification that vendors/contractors were not excluded from doing business with the federal government. This finding appears to be a systemic issue. Cause The Organization did not maintain documentation evidencing its compliance with its policy to verify that persons or entities contracted with were not listed on the exclusions list prior to entering into the contracts or purchase agreements. Effect The Organization may have entered into covered transactions with persons who have been suspended or debarred. Questioned Costs None noted. Context We tested four vendors with “covered transactions” under assistance listing numbers 93.224 and 93.527 and six under assistance listing number 10.557. All vendors selected were missing evidence of suspension and debarment checks being performed. However, we were able to independently verify that the vendors in question were not excluded through SAM.GOV. Recommendation We recommend the Organization perform vendor checks prior to entering into procurements meeting the covered transaction criteria, and retain documentation that the checks were performed and when they were performed. In addition, we recommend that the Organization update these checks on an annual basis. Views of responsible officials and planned corrective action Management is in agreement with this finding and will take corrective action as outlined below.