Audit 412160

Finding 2025-003 Reporting - Timely Submission of Financial Reports – Noncompliance and Significant Deficiency in Internal Control over Compliance Agency: Department of Health and Human Services Program: ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year: 2024 Criteria or Specific Requirement: 2 CFR subtitle A Chapter II part 200 subpart F section 200.512 states that “(1) The audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor’s report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day.” Condition: The Federal data collection form and reporting package were not filed on time. Cause: There were limited personnel resources at the Borough to assist in the timely completion of the Borough’s audit. Effect or potential effect: Federal funds could potentially be expended on unallowable activities and for unallowed costs, and outside the period of performance. Questioned Costs: None noted. Context: The Form SF-SAC is due nine months after the fiscal year-end. The form for the fiscal year ended June 30, 2025 was filed late. Identification as a Repeat Finding: Yes. Finding 2024-003 Significant Deficiency in Internal Control over Compliance and Noncompliance Recommendation: The Borough should evaluate resources allocated to staffing to ensure it has the capacity to adequately prepare and assist in the timely execution of the audit. Views of responsible officials: Management agrees with the finding and has engaged additional accounting resources and expertise.

Finding 2025-004 Reporting – Material Noncompliance and Material Weakness in Internal Control Over Compliance Agency: Department of Health and Human Services Program ALN: No. 93.224 / 93.527 Health Center Program Cluster Award Year: 2024 Criteria or Specific Requirement: In accordance with 2 CFR part 170, the Borough was required to report firsttier subawards of $30,000 or more to the Federal Funding Accountability and Transparency Act Subaward Reporting System (FSRS) no later than the end of the month following the month in which the obligation was made. Condition: The required reports were not submitted during the year. Controls were not in place to evaluate the applicability of the reporting requirement and ensure the reports were submitted timely. Cause: Borough was not aware that this subaward reporting requirement was applicable for the new Health Center Program Cluster award. Effect or potential effect: The Borough was not in compliance with subrecipient reporting requirements. Questioned Costs: None noted. Context: The auditor requested the reports for the Borough’s subawards that were required under FSRS. The Borough was unable to provide the requested report as it had not been filed. Identification as a Repeat Finding: Yes. Finding 2024-004 Material Weakness in Internal Control over Compliance and Noncompliance. Recommendation: The Borough should implement internal control procedures to evaluate applicability of grant reporting requirements, especially when funding sources or nature of grant awards change. Views of responsible officials: Management agrees with the finding and will ensure all subawards are properly and timely reported.