Assistance Listing, Federal Agency, and Program Name 93.889, U.S. Department of Health and Human Services, National Bioterrorism Hospital Preparedness Program Federal Award Identification Number and Year DKT3LLBWFVL3 - 2025 Pass through Entity North Carolina Department of Health and Human Services Finding Type Material weakness Repeat Finding No Criteria WakeMed is responsible for identifying in its accounting records all federal awards received and expended and the federal programs under which they were received, including the Assistance Listing title and number, federal award identification number, award year, and federal agency or pass through entity, as applicable, in accordance with 2 CFR § 200.302(b)(1). In addition, 2 CFR § 200.510(b) requires WakeMed to prepare a schedule of expenditures of federal awards for the period covered by the financial statements that includes total federal awards expended and identifies individual federal programs by federal agency, including applicable Assistance Listing Numbers and pass through identifying information. Under 2 CFR § 200.331, the substance of the relationship is more important than the form of the agreement, and each agreement should be evaluated to determine whether the entity is acting as a subrecipient or contractor. Condition Management did not initially identify a contract with an awarding agency as a federal subaward, which resulted in ALN 93.889 being omitted from the SEFA. The amount was subsequently added to the SEFA. Questioned Costs N/A If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported N/A Identification of How Questioned Costs Were Computed N/A Context Management incorrectly identified that they were a contractor of funds received from the North Carolina Department of Health and Human services under ALN 93.889 rather than a subrecipient. As a result, the schedule of expenditures of federal awards reported for the year ended September 30, 2025 did not originally have this grant included and was understated by $485,737. Cause and Effect Controls in place did not ensure the SEFA was complete and accurate. The lack of controls resulted in an understatement of the schedule of expenditures of federal awards for the year ended September 30, 2025. There was no impact to major program determination for the year ended September 30, 2025. Recommendation Management should implement a process to ensure appropriate identification for agreements in which they are considered a subrecipient vs a contractor. Views of Responsible Officials and Corrective Action Plan Management concurs with the finding and has implemented a new grant governance committee and process for identifying grant components before entering into grant agreements. Management also created a new grant department with staff devoted to researching, applying for, monitoring, and reporting on all grants. The accounting function for grants will be done by this team as well but with continued oversight by the Executive Director, Accounting.