Finding 2023.003: Allowable Costs/Activities Allowed or Unallowed - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID -19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program COVID-19 Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number and Year: H8026638 - 2022 and 2023, H8F40829 - 2021 and H8G48040-2023 Criteria In accordance with 2 CFR, Part 200.430I(i)(1), charges to Federal Awards for salaries and wages must be based on records that accurately reflect the actual work performed, which must, among other things: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-federal entity; (iii) and reasonably reflect the total activity for which the employee is compensated by the non-Federal entity. Additionally, costs must be adequately documented, as per 2 CFR 200.403(g). Condition Charges to Federal Awards for salaries and wages were not supported by properly approved pay rates, and time sheets did not agree to payroll registers. Additionally, nonpayroll expenditures were not supported by proper approval. Cause The Center's internal controls over payroll were not consistently followed to ensure pay rates were approved and time sheets agreed to payroll registers. Additionally, the Center's internal controls over nonpayroll expenditures were not consistently followed to ensure that expenditures were approved. Effect or Potential Effect Failure to ensure accurate wage and allocation of employees' time across programs could result in non-compliance with the grant requirements or unallowable costs being charged. Additionally, failure to ensure accurate nonpayroll expenditures could result in non-compliance with the grant requirements or unallowable costs being charged. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program for testing. Out of the 25 transactions tested, we noted 16 instances where there was no formal approval of pay rates and where they were not appropriately reflected in the payroll registers; 25 instances where time cards were not appropriately reflected in the payroll registers; and all 25 labor reports showed no formal approval documented. Additionally, for nonpayroll allowable costs, out of 11 transactions tested, we noted 9 instances where there was no formal approval showing review that the cost was allowable under the program. Identification of Repeat Finding Yes, see finding 2022.003. Recommendation We recommend that the Center consistently enforce its internal controls over payroll to ensure that the times sheet and pay rates are reviewed and approved by the appropriate supervisor. Additionally, we recommend that the Center consistently reinforces its internal controls over nonpayroll expenditures to ensure all expenditures were approved by the appropriate supervisor. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all expenditures have evidence of formal approval of review.
Finding 2023.004: Reporting - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID -19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program COVID-19 Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number and Year: H8026638 - 2022 and 2023, H8F40829 - 2021 and H8G48040-2023 Criteria In accordance with §200.328, Financial Reporting, annual audit reports of recipients of federal funds are required to be submitted to the Federal Audit Clearing House within the earlier of 30 days after the receipt of the audit report or nine months after the end of the audit period. Condition For the year ended June 30, 2023, the Center did not submit their annual audit in accordance with the Uniform Guidance on a timely basis. Cause Due to the turnover in the financial leadership, the ongoing pandemic and the closing of their prior audit firm, the annual audit report was not submitted on time. Effect or Potential Effect The Center did not comply with the appropriate rules and regulations as per the Uniform Guidance and with DHHS grant requirements. Questioned Costs None. Identification of Repeat Finding Yes, see finding 2022.004. Recommendation The Center should establish controls to ensure all accounting records are analyzed and proper support is available in order to ensure that the financial statement audit is submitted on a timely basis to the Federal government. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure all reports are submitted timely in accordance with the Uniform Guidance and DHHS grant requirements.
Finding 2023.005: Procurement, Suspension and Debarment - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID -19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program COVID-19 Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number and Year: H8026638 - 2022 and 2023, H8F40829 - 2021 and H8G48040-2023 Criteria In accordance with §200.213 and §180.300, non-federal entities cannot enter into awards, subawards, or contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition There was no evidence that the Center reviewed vendors and employees for suspension and debarment in accordance with the Uniform Guidance requirements. Cause The Center did not have adequate controls to illustrate review of vendors and employees for any suspensions or debarment. Effect or Potential Effect The Center may procure goods and services from vendors and employees that have been suspended or debarred from doing business with the federal government. Questioned Costs None. Context We selected a sample of 7 vendors for suspension and debarment for testing. For 2 of the 7 vendors tested, management did not provide adequate supporting documentation for the review and approval of each vendor as to whether they have been suspended or debarred. We selected a sample of 7 employees for suspension and debarment for testing. For 1 of the 7 employees tested, management did not provide adequate supporting documentation for the review and approval of the employee as to whether they have been suspended or debarred. Identification of Repeat Finding Yes, see finding 2022.005. Recommendation The Center should develop a written procedure to review all vendors and individuals in accordance with the Uniform Guidance requirements for suspension and debarment. This procedure should be reviewed with the appropriate staff to ensure compliance with the requirement. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure vendors and employees are being reviewed for suspension and debarment and there is evidence of a formal review being performed.
Finding 2023.006: Cash Management - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID -19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program COVID-19 Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number and Year: H8026638 - 2022 and 2023, H8F40829 - 2021 and H8G48040-2023 Criteria In accordance with §200.305, Federal Payment, grantees and subgrantees that receive grant funds are responsible for maintaining controls regarding the management of federal program funds under the Uniform Guidance in 2 CFR 200.302 and 200.303. Condition The Center's drawdowns did not illustrate review and approval by management. Cause The Center did not have adequate controls to ensure drawdowns were properly approved and such approval is documented. Effect or Potential Effect The condition may lead to inaccurate or improper drawdowns. Questioned Costs None. Context We selected 7 drawdowns for testing of cash management. We noted there was no formal approval or evidence of review for all 7 drawdowns. Identification of Repeat Finding Yes, see finding 2022.006. Recommendation The Center should develop written procedures to review all drawdowns that occur in order to ensure accuracy. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of review being performed.
Finding 2023.007: Period of Performance - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) COVID -19 Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program COVID-19 Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Number: 93.224 and 93.527 Federal Award Identification Number and Year: H8026638 - 2022 and 2023, H8F40829 - 2021 and H8G48040-2023 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award's period of performance that were authorized by the federal awarding agency or pass-through entity (2 CFR sections, 200.308, 200.309 and 200.403(h)). Condition There was no evidence of the Center's review and approval of the period of performance for expenditures during the year. Cause The Center did not have adequate controls to review period of performance to ensure all goods and services are appropriately included or excluded. Effect or Potential Effect The Center may incur expenditures to the grant that are not within the grant's period of performance. Questioned Costs None. Context We selected 8 payroll transactions charged to the federal program to test controls over period of performance and noted 8 instances where there was no formal approval of the cost charged to the major program by evidence of a review. Identification of Repeat Finding Yes, see finding 2022.007. Recommendation The Center should develop written procedures to review all expenditures to ensure they are within the proper period of performance of the grant. Views of Responsible Officials Management and the Board of Directors agree with the finding and will implement additional controls to ensure there is formal evidence of approval over the period of performance for goods and services purchased under the grant.