Audit 405313

Finding 2025-001 Agency: U.S. Department of Health and Human Services (CSBG) Program: Community Service Block Grant (AL No. 93.569) Significant Deficiency and Noncompliance over Allowable Costs / Period of Performance Repeat Finding: No Condition: During our testing over allowable costs, we identified 2 transactions in the amount of $38,225 that were incurred in fiscal years 2022 and 2023, however, those costs were recorded as federal expenditure and revenue in fiscal year 2025. The current CSBG grant covering fiscal year 2025 covers the period October 1, 2024 – September 30, 2025, as such, those costs were recorded outside of the period of performance and as such are unallowable. Criteria: As provided in 2 CFR section 200.309: The period of performance is the time during which the non-federal entity is authorized to incur allowable costs. The period of performance starts and ends on the dates specified in the federal award, and costs incurred outside of this period are generally unallowable, unless specifically authorized. Cause: The Organization did not follow its policies and procedures to ensure that all vendor invoices have been received timely and recorded in the accounting records. Effect: The Organization recorded expenditures that were outside of the period of performance and as such are unallowable. Questioned Costs: Unknown Recommendation: We recommend that management strengthen controls over the timing of federal expenditure recognition to ensure costs are recorded in the proper period of performance. Additionally, the entity should implement procedures to review and reconcile expected expenses to actual invoices received on a periodic basis to ensure all vendor invoices have been timely received. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the schedule of corrective action plans.

Finding 2025-002 Agency: U.S. Department of Health and Human Services (CSBG) Program: Community Service Block Grant (AL No. 93.569) Significant Deficiency and Noncompliance over Eligibility Repeat Finding: No Condition: During our testing of participant eligibility for the CSBG program, we noted the following exceptions out of a sample size of 40: (1) for one participant, the CSBG eligibility form was not signed by the case manager; and (2) for two participants, we were unable to obtain documentation to support proof of residence. Criteria: As provided in 2 CFR section 200.303: An entity must establish internal controls to ensure compliance with federal statutes and program requirements, including eligibility. Additionally, 2 CFR section 200.403 requires that costs must be adequately documented to be allowable. Cause: The Organization did not follow its policies and procedures to ensure all eligibility documents are properly completed, authorized, and retained. Effect: The Organization was unable to provide adequate documentation that eligibility criteria were met prior to providing services. Questioned Costs: Unknown Recommendation: We recommend that management strengthen internal controls over eligibility determination and documentation to ensure compliance with federal program requirements. Management should establish procedures to require complete and signed eligibility forms prior to approving or providing program benefits and consider implementing a standardized eligibility checklist to ensure all required supporting documentation (e.g., income verification, residency, other criteria) is obtained and retained. Auditee Response and Corrective Action Plan: Management agrees with the finding. Refer to the schedule of corrective action plans.