Audit 409729

Finding No. 2025‐002: Allowable costs – Material weakness in internal control over compliance and compliance finding 93.917 HIV Care Formula Grant (Ryan White Part B) Criteria: In accordance with Section 200.430 of the Uniform Guidance, charges for personnel expenses using federal awards must be supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable and properly allocated. Condition: During our review of personnel expenses, we noted that 13 out of 14 sampled personnel costs did not recalculate based on the employee’s pay rate and hours spent on the grant per timesheet. Per our review, 100% of their time was charged to Ryan White Part B when the timesheets documented less than 100% of total time charged. Cause: The Organization experienced turnover in accounting management at the beginning of 2025. The new interim management did not ensure personnel costs charged to the grant were supported by timesheets. Effect: The Organization’s reporting of grant expenditures per employee time and effort is not fully documented, in accordance with the Uniform Guidance requirements. Questioned costs: $7,963. Questioned costs were determined by multiplying the non Ryan White Part B percentage by the total employee’s costs charged for the respective pay period. Recommendation: Management should review the current procedures and the requirements of Section 200.430 and implement changes where necessary to ensure personnel costs are charged in accordance with Section 200.430 and that the expenses are supported by properly approved employee timesheets. Management’s Response: See corrective action plan.

Finding No. 2025‐003: Allowable costs – Material weakness in internal control over compliance and compliance finding 93.917 HIV Care Formula Grant (Ryan White Part B) Criteria: In accordance with Section 200.430 of the Uniform Guidance, costs must be adequately documented and must be supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable and properly allocated. Condition: During our review of expenses charged, we noted that for 4 of 21 sampled charges AOC was not able to provide support for the expenditure. Cause: Per AOC management, they were not able to find the support as the person who was responsible for maintaining the supporting documents were no longer with AOC. Effect: The lack of proper supporting documentation for expenditures charged to the grant are subject to disallowance. Questioned costs: $5,907. Recommendation: Management should review the current procedures and the requirements of Section 200.430 and implement changes where necessary to ensure that proper supporting documentation is maintained for all charges to the grant. Management’s Response: See corrective action plan.

Finding No. 2025‐004: Reporting – Material weakness in internal control over compliance and compliance finding 93.917 HIV Care Formula Grant (Ryan White Part B) Criteria: In accordance with 45 CFR 75 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, Subrecipient will develop, implement and maintain financial management and control systems, which include at a minimum accurate payroll, accounting and financial reporting records, cost source documentation, effective internal and budgetary controls, and determination of reasonableness, allowability and allocability of costs, and timely and appropriate audits and resolution findings. Condition: For 4 of 6 requests for reimbursements (RFRs), we were unable to reconcile the reimbursement amounts per the RFR totals to the grant general ledger. In total, the net of the four RFRs, the expenses per the grant RFRs were less than expenses per the grant general ledger. Cause: The Organization experienced turnover in accounting management at the beginning of 2025 responsible for the preparation and submission of the RFRs. Effect: The Organization’s controls over the grant RFR process were not sufficiently implemented to avoid the risk of noncompliance related to proper recordkeeping for reporting documentation. Questioned costs: None Recommendation: The Organization should maintain documentation of all allowable costs included on the grant RFRs in the grant general ledger. Management’s Response: See corrective action plan.

Finding No. 2025‐005: Allowable costs – Control deficiency in internal control over compliance. 93.940 HIV Prevention Activities Health Department Based Criteria: In accordance with Section 200.430 of the Uniform Guidance, charges for personnel expenses using federal awards must be supported by a system of internal control that provides reasonable assurance that charges are accurate, allowable and properly allocated. Condition: During our review of personnel expenses, we noted that for 4 out of 8 sampled personnel costs, we were unable to obtain a signed and properly approved employee timesheet. Cause: The Organization failed to ensure that employee timesheets were properly reviewed and approved. Effect: Lack of properly reviewed and approved timesheets could result in improper costs being charged and allocated to the grant. Questioned costs: None. Recommendation: Management should review the current procedures and the requirements of Section 200.430 and implement changes where necessary to ensure personnel costs are charged in accordance with Section 200.430 and that the expenses are supported by properly approved employee timesheets. Management’s Response: See corrective action plan.

Finding No. 2025‐006: Allowable costs – Control deficiency in internal control over compliance. 93.940 HIV Prevention Activities Health Department Based Criteria: In accordance with 45 CFR 75 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards, Subrecipient will develop, implement and maintain financial management and control systems, which include at a minimum accurate payroll, accounting and financial reporting records, cost source documentation, effective internal and budgetary controls, and determination of reasonableness, allowability and allocability of costs, and timely and appropriate audits and resolution findings. Condition: During our review, we noted that for 2 out of 8 sampled costs we were incorrectly coded and charged to the grant. Cause: The Organization failed to ensure that all costs charged to the grant were reasonable, allowable, and allocable to the grant. Effect: Improperly coded and charged costs could result in unallowable costs. Questioned costs: $2,932. Recommendation: Management should review the current procedures and the requirements of Section 200.430 and implement changes where necessary to ensure that costs are charged in accordance with Section 200.430. Management’s Response: See corrective action plan.