Audit 404919

Finding 2025.001: Allowable Costs/Activities Allowed or Unallowed - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program Grants for New and Expanded Services under the Health Center Program COVID-19 - Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS11299 - 2024 and 2025, Q8MCS49109 - 2024, H2ECS45512 - 2024 and H8LCS51634 - 2024 Criteria In accordance with 2 CFR, Part 200.430I(i)(1), charges to Federal Awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the nonfederal entity; and (iii) reasonably reflect the total activity for which the employee is compensated by the nonfederal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.40.3(g). Condition Charges to federal awards for salaries and wages were not supported by properly approved allocations. Cause The Organization's internal controls over payroll were not consistently followed to ensure allocations were approved. Effect or Potential Effect Failure to ensure accurate wage and allocation of employees' time across programs could result in noncompliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 40 payroll transactions charged to the federal program for testing. Out of the 40 transactions tested, we noted 26 instances where there was no formal approval of allocation to the federal program. Identification of Repeat Finding Not a repeat finding. Recommendation We recommend that the Organization consistently enforce its internal controls over payroll to ensure that the allocations are reviewed and approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.

Finding 2025.002: Reporting - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program Grants for New and Expanded Services under the Health Center Program COVID-19 - Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS11299 - 2024 and 2025, Q8MCS49109 - 2024, H2ECS45512 - 2024 and H8LCS51634 - 2024 Criteria In accordance with Reporting requirements of the Office of Management and Budget, SF-425, Federal Financial Reports are required to be filed timely and supporting documentation is required to be maintained. Condition For the year ended September 30, 2025, the Organization was not able to provide supporting documentation for the Federal Financial Reports. Cause Due to the turnover in the financial leadership, the supporting documentation for these reports were not able to be obtained. Effect or Potential Effect The Organization did not comply with the appropriate rules and regulations as per the Uniform Guidance and with DHHS grant requirements. Questioned Costs None. Identification of Repeat Finding Not a repeat finding. Recommendation The Organization should establish controls to ensure all accounting records are analyzed and proper support is available in order to ensure that the reports are accurate. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all reports are submitted timely in accordance with the Uniform Guidance and DHHS grant requirements.

Finding 2025.003: Cash Management - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster: Health Center Program Grants for New and Expanded Services under the Health Center Program COVID-19 - Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS11299 - 2024 and 2025, Q8MCS49109 - 2024, H2ECS45512 - 2024 and H8LCS51634 - 2024 Criteria In accordance with §200.305, Federal Payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Organization's drawdowns did not illustrate review and approval by management. Cause The Organization did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect or Potential Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 7 drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for all 7 drawdowns. Identification of Repeat Finding Not a repeat finding. Recommendation The Organization should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.