Audit 405626

Untimely Submission of Federal Financial Reports (SF 425) – Reporting – Assistance Listing Numbers: 93.224 and 93.527 Consolidated Health Center Cluster Type of Finding: Significant Deficiency in Internal Control over Compliance Condition: Federal Financial Reports (SF-425) were submitted after the required 90 day reporting deadline, indicating that controls over the timely submission of required federal reports were not operating effectively. Criteria: Title 2 CFR §200.328 requires non-Federal entities to submit required financial reports no later than 90 calendar days after the end of the reporting period, unless otherwise specified in the terms and conditions of the federal award. Effect: Failure to submit SF-425 reports timely increases the risk of noncompliance with federal reporting requirements and may result in delayed monitoring, enforcement actions, or other adverse consequences by the awarding agency. Context: During audit testing, instances were identified where SF-425 reports related to the major federal program were submitted after the applicable 90-day deadline. Questioned Costs: None. Cause: Controls and procedures designed to ensure timely preparation, review, and submission of required federal financial reports were not consistently followed, resulting in delayed submission of SF-425 reports. View of Responsible Officials: Management agrees with the finding. Recommendation: We recommend that the Organization strengthen internal controls over federal financial reporting by implementing procedures to monitor reporting deadlines, including maintaining a formal tracking mechanism or compliance calendar for SF‑425 due dates, assigning clear responsibility for report preparation and submission, and performing supervisory review to ensure SF-425 reports are submitted in accordance with federal requirements. Planned Implementation Date of Corrective Action: Fiscal Year 2026

Incorrect Grant Drawdown – Allowable Costs / Reporting – Assistance Listing Numbers: 93.224 and 93.527 Consolidated Health Center Cluster Type of Finding: Material Weakness in Internal Control over Compliance Condition: During grant drawdown testing, it was noted that on December 6, 2024, management drew down $79,942 from the CARE Grant that related to expenditures attributable to the PREP Grant. No documentation or evidence of communication with the Health Resources and Services Administration (“HRSA”) was identified to demonstrate that the error was reported or corrected in a timely manner. This indicates that controls were not operating effectively to ensure grant drawdowns were made from the appropriate federal award. Criteria: Title 2 CFR §200.302 and §200.305 require non-Federal entities to maintain effective internal control over federal awards and ensure that drawdowns are limited to allowable costs incurred under the applicable award. Additionally, HRSA grant terms and conditions require recipients to request funds only for expenditures attributable to the specific grant award. Effect: Drawing funds from an incorrect federal award increases the risk of noncompliance with federal requirements and may result in unallowable costs, inaccurate reporting, or the need for repayment if not timely identified and corrected. Context: The exception noted represents a grant drawdown of $79,941.72 from the CARE Grant that was attributable to expenditures under the PrEP Grant, with no evidence of timely correction or notification to HRSA identified during audit testing. Questioned Costs: $79,942 Cause: Controls designed to ensure grant expenditures were properly aligned with the correct federal award prior to drawdown were not operating effectively, and procedures for identifying, reporting, and correcting drawdown errors were not consistently applied. View of Responsible Officials: Management agrees with the finding. Recommendation: We recommend that the Organization strengthen internal controls over grant drawdowns by implementing procedures to ensure expenditures are reviewed and reconciled to the appropriate federal award prior to requesting funds. Management should also establish formal procedures for timely identification, documentation, and communication of drawdown errors to the awarding agency when identified. Planned Implementation Date of Corrective Action: Fiscal Year 2026