2024-001 [2021-001]—Late Submittal of the Data Collection Form Type of Finding: (G) Instance of Noncompliance Related to Federal Awards Funding Agency: All agencies AL #: All awards Award #: All awards Award Period: All periods Estimated Questioned Costs: N/A Compliance Requirement: Reporting Statement of Condition The AAIHB did not submit its Data Collection Form by the required due date. Criteria Uniform Guidance requires that the audit be completed and the data collection form and reporting package be submitted by the earlier date of either 30 days after the receipt of the auditor's report(s), or nine months after the end of the fiscal year end date, unless a longer period is agreed to in advance by the cognizant or oversight agency for audit. Effect The AAIHB is not in compliance with Federal award requirements and could jeopardize future federal funding. Cause The AAIHB was unable to complete the final trial balance and SEFA due to several factors, including late invoice submissions from sub awardees, delays in completing bank reconciliations, and missing documentation for direct debit entries. In addition, accounts receivable were not recorded timely because certain programs did not provide copies of billing invoices for contractual services rendered. The situation was further affected by staff turnover in a key finance position. Recommendation We recommend that the AAIHB implement procedures to ensure the completion of the data collection form in a timely manner. View of Responsible Officials and Corrective Action Plan The AAIHB has missed the filing deadline for the FY 2024 Data Collection Form. The AAIHB will file the FY 2024 Data Collection Form within 30 days. The AAIHB will review and revise its internal review processes to ensure future Data Collection Forms are completed and filed in a timely manner. Corrective Action Plan Timeline Corrective action plan timeline is to submit FY 2024 audit and data collection forms within 30 days. Designation of Employee Position Responsible for Meeting Deadline Executive Director and Accounting Manager
2024–002 [2022–002]—Unallowable Disbursements Charged to Federal Program Type of Finding: (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.231 – Epidemiology and Laboratory Capacity Award #: Various Award Period: 09/30/2021 – 09/29/2026 Estimated Questioned Costs: $7,600 Compliance Requirement: Allowable Costs/Cost Principles Statement of Condition AAIHB distributed gift cards to independent contractors as a gesture of appreciation for working extended hours related to COVID-19 contact tracing efforts. An annual bonus was also paid out to independent contractors that was not included in the signed contract. The total value of the gift cards was approximately $600, and the total value of the bonuses was approximately $7,000. Both were charged to the Epidemiology and Laboratory Capacity grant (AL #93.231). These gift cards and bonuses were provided in addition to their regular compensation. Neither set of disbursements were processed through payroll or formalized in contract terms, and there is no documentation indicating the entity obtained approval from the awarding agency. Criteria In accordance with 2 CFR §200.403, costs charged to federal awards must be necessary, reasonable, allocable, adequately documented, and conform to applicable limitations. To the extent the gift cards constitute promotional gifts, cite 2 CFR §200.421(e)(3). Payments to contractors also should conform to written contract terms and applicable procurement requirements. Contractor payments must align with procurement standards in 2 CFR § 200.318–200.324 and be governed by written contracts. Effect The use of federal funds to provide gift cards or bonuses constitutes an unallowable cost under Uniform Guidance. The questioned amount may be subject to repayment to the awarding agency or passthrough entity. Cause The auditee sought to recognize the extraordinary efforts of independent contractors during and towards the end of the COVID-19 public health response. However, they were unaware that the use of gift cards or bonuses not outlined in the contact for this purpose was inconsistent with Uniform Guidance and lacked prior approval or supporting policy. Recommendation We recommend the auditee discontinue the use of federal funds for gift card distributions or bonuses to contractors. Payments to contractors should be governed by written contracts and comply with applicable procurement standards. If the auditee believes these costs are justifiable, they should consult the awarding agency for a determination and, if necessary, reimburse the federal award. View of Responsible Officials and Corrective Action Plan We acknowledge the finding regarding the use of gift cards and bonus payments to contractors. During the Covid-19 pandemic, our staff and contractors were tasked with responding to urgent and overwhelming public health demands, particularly as the New Mexico Department of Health became overextended. To recognize the efforts and to ensure timely case reporting and investigations for tribal communities, gift cards and bonuses were used as a form of appreciation. Corrective Action Plan Moving forward, we will ensure full compliance with federal grant requirements. Specifically: 1. We will adhere strictly to the cost principles and allowability guidance outlined in federal regulations and the terms of each Notice of Award. 2. In instances where the allowability of an expense is unclear, we will proactively seek guidance and written approval from our Federal Grant Management Officer before incurring the cost. 3. We will provide refresher training to program and fiscal staff on allowable costs under federal awards to prevent recurrence of similar findings. These corrective actions will ensure future expenditures are fully compliant with federal guidelines. Corrective Action Plan Timeline As part of being a continued finding, AAIHB has already ceased the use of gift cards. Going forward we will also discontinue the use of bonuses for contractors. Within the next quarter, Finance and Program Leadership will review current grant guidance, the applicable Notice of Award, and other relevant federal requirements to ensure compliance. To prevent this issue for recurring, whenever there is uncertainty regarding the allowability of a cost, staff will consult Grants Management Officers prior to obligating or expending funds. Designation of Employee Position Responsible for Meeting Deadline Program Managers/Directors, Finance Officer, and Accounting Manager.
2024–003 [2023-003]—Late Reporting Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health & Human Services AL #: 93.479 Award #: 5 NU58DP006727-03-00 Award Period: 9/30/2019 to 9/29/2024 Estimated Questioned Costs: N/A Compliance Requirement: Reporting Statement of Condition During our testing of grant reporting requirements, we noted that AAIHB did not consistently submit required reports in accordance with grant requirements. Specifically, the required narrative progress report for Assistance Listing 93.479 was submitted after the required due date. In addition, one Federal Financial Report (FFR) for Assistance Listing 93.479 could not be reconciled to the supporting documentation maintained by the AAIHB. The submitted FFR reported expenditures that exceeded the available supporting reports by $58,895. Based on discussions with management, the FFR was updated during the review process to include additional expenditures, for subrecipient invoices submitted late, applicable to the reporting period; however, revised supporting documentation reconciling the submitted FFR to the accounting records was not retained. Criteria Uniform Guidance requires that AAIHB complete the required Federal Financial Reports to report cumulative expenses incurred under each grant number and required narrative Performance Reports. These reports must be submitted no later than the required due date after the end of reporting period. Financial reports should be tie to the supporting documentation. Effect AAIHB is not in compliance with federal award requirements and could jeopardize future federal funding. Cause Regarding the FFR variance, AAIHB conducted multiple reviews and revisions during the preparation and finalization of the FFR to ensure all grant expenditures were accurately recorded and reflected in the report. As a result of these revisions, supporting documentation used to reconcile and substantiate certain reported amounts was not adequately retained. The FY24 program narrative report was submitted after the required due date due to overlapping grant management responsibilities and an administrative oversight during the reporting period. The reporting requirement was inadvertently missed resulting in late submission of the program narrative. Recommendation Management should implement procedures to ensure that all required programmatic and financial reports are prepared, reviewed, and submitted by the applicable grant deadlines. In addition, management should establish procedures requiring that all Federal Financial Reports be fully supported by documentation retained at the time of submission. If revisions are made to an FFR during the review process, AAIHB should retain updated supporting schedules that reconcile the final reported expenditures to the underlying accounting records. These procedures will help ensure the completeness, accuracy, and timely submission of required grant reports and provide a clear audit trail supporting amounts reported to the grantor. View of Responsible Officials and Corrective Action Plan The AAIHB missed the reporting deadline for the program narrative reports and did not retain the final accounting support for the FFR. The AAIHB will review and revise its internal processes to ensure future program narrative reports are completed and filed in a timely manner and that accounting records to support final numbers are retained. Corrective Action Plan Timeline Corrective action plan timeline is to submit FY 2025 and FY 2026 program reports on time and retain financial support. Designation of Employee Position Responsible for Meeting Deadline Program Managers/Directors, Accounting Manager, and Grants & Contracts Specialist
2024–004—Subrecipient Monitoring Processes and Controls Type of Finding: (F) Significant Deficiency in Internal Control Over Compliance of Federal Awards (G) Instance of Noncompliance Related to Federal Awards Funding Agency: U.S. Department of Health and Human Services AL #: 93.479 – Good Health and Wellness in Indian Country Award #: 5 NU58DP006727-03-00 Award Period: 09/30/2019 – 09/29/2024 Estimated Questioned Costs: N/A Compliance Requirement: Subrecipient Monitoring Statement of Condition For the year ended September 30, 2024, the AAIHB did not maintain effective controls over subrecipient monitoring related to the Good Health and Wellness in Indian Country program. Required subrecipient financial and performance reporting support was not consistently obtained in a timely manner, often resulting in payment of subrecipient invoices occurring 3 to 7 months after the end of the period. Auditors also noted that required subrecipient audit reports were not present in the subaward files and no evidence of review could be provided. No evidence of any formal corrective actions could be provided. AAIHB personnel indicated that subrecipients did not always submit reimbursement requests and required reports timely, and that payment of invoices was withheld until support was provided; however, AAIHB did not consistently document follow-up actions, escalation, or enforcement of subaward reporting requirements to ensure timely and complete subrecipient reporting Criteria Title 2 CFR §200.331 requires pass-through entities to monitor subrecipient activities to ensure that subrecipients comply with federal statutes, regulations, and the terms and conditions of subawards, including the timely receipt and review of required financial and performance reports. Effect Required subrecipient reporting, monitoring, and follow-up were not consistently performed and documented. As a result, AAHB lacked reasonable assurance that subrecipients complied with subaward terms and that subrecipient expenditures and performance information used for AAIHB reporting were allowable, supported, timely, and reliable. Given that subrecipient activity is material to the administration of AAIHB’s major program, these conditions increase the risk that unsupported or noncompliant subrecipient activity may not be identified and corrected timely. Such conditions may require additional corrective actions or increased scrutiny by grantor or oversight agencies. Cause AAIHB did not design and/or consistently perform a formal subrecipient monitoring process, including (1) a standardized tracking and follow-up protocol for late or missing submissions and (2) documented escalation and corrective action when subrecipients do not comply. As a result, subrecipient oversight relied largely on voluntary compliance by subrecipients, without sufficient AAIHB review, enforcement, or documentation of monitoring activities. Recommendation We recommend AAIHB: • Develop and implement written subrecipient monitoring policies and procedures that clearly define reporting requirements and submission deadlines. • Track subrecipient report due dates and document follow-up efforts for late or missing reports. • Provide training to staff responsible for subrecipient oversight to strengthen monitoring and compliance. View of Responsible Officials and Corrective Action Plan The AAIHB acknowledges that its subrecipient related practices could be improved upon. The AAIHB will review and revise its internal processes and procedures and implement the auditor’s recommendations to ensure compliance with subrecipient requirements. Corrective Action Plan Timeline Prior to the audit finding, the AAIHB already had one meeting with key personnel involved in the administration and oversight of subawards to begin implementing improvements to our subrecipient monitoring practices. The AAIHB is actively working to update subrecipient monitoring practices and anticipates having policies and procedures in place by the beginning of the next fiscal year. In addition, the GHWIC program has found our internal administrative assistance portal that was developed to optimize admin workflow has been helpful because it has also optimized the processing of subaward invoices. Furthermore, the GHWIC program is in the process of developing a sub awardees data portal for invoicing and reporting purposes to streamline the subaward process and ensure payment in a timely manner. Designation of Employee Position Responsible for Meeting Deadline Executive Director, Finance, Program Managers/Directors/Coordinators, Grants & Contracts Specialist