Audit 415424

2026-001 Period of Performance Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 Health Center Program Cluster Award Numbers H80CS00540‐24‐08 Criteria [ ] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Title 2 CFR 200.403(h) requires that costs be incurred in the approved budget period for the applicable awards and Title 2 CFR 200.403(e) requires that those costs be determined according to GAAP. Condition The Organization’s expenditures allocated to the federal program included costs for salaries outside of the approved budget periods for the awards. This finding appears to be an isolated incident. Cause The Organization’s internal controls over compliance did not identify certain payroll expenditures from the prior accounting period and remove them from the listing of expenditures eligible for reimbursement in the current period. Effect Including out-of-period costs in the expenditures eligible for reimbursement increases the risk of noncompliance with the period of performance requirements. The Organization may allocate salaries outside of the grant period to the federal awards. Questioned Costs None noted. Context In a sample of 25 transactions tested, we noted three transactions that related to salaries for services provided outside of the budget period of the award. However, follow-up procedures indicate that there were sufficient eligible expenditures to cover the total funding received during the period. Recommendation We recommend management implement controls to verify that all expenditures allocated to federal programs, including salaries and wages, were incurred in the budget period of the award. Views of responsible officials and planned corrective action Management concurs with Finding 2026-001. Management acknowledges that while the incident was isolated and sufficient total eligible expenditures existed to support the funding received, the review process of the payroll expenses failed to identify and remove the expenses from the current budget period of the award. See corrective action outlined on page 39.

2026-002 Suspension and Debarment (repeat of finding 2025-004) Program Information Federal Organizations U.S Department of Agriculture (passed through California Department of Public Health) Assistance Listing Numbers 10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children Award Numbers 25-10160, 22-10237 A05 Criteria Title 2 CFR 200.214 and Title 2 CFR 180.300 require that organizations “verify that the person with whom you intend to do business is not excluded or disqualified” before entering into covered transactions (procurement contracts, purchase orders, or agreements greater than or equal to $25,000) with persons or vendors. [ ] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Condition The Organization entered into covered transactions without verification that vendors/contractors were not excluded from doing business with the federal government. This finding appears to be a systemic issue. Cause The Organization did not maintain documentation evidencing its compliance with its policy to verify that persons or entities contracted with were not listed on the exclusions list prior to entering into the contracts or purchase agreements. Suspension and debarment check were performed, but not until after the prior year’s audit was completed and this issue was identified. Effect The Organization may have entered into covered transactions with persons who have been suspended or debarred. Questioned Costs None noted. Context We tested four vendors with “covered transactions” under assistance listing number 10.557. All vendor suspension and debarment checks were performed after the initial transaction had already been entered into, due to the timing of the transaction compared to the timing of the completion of the prior year’s audit. Recommendation We recommend the Organization perform vendor checks prior to entering into procurements meeting the covered transaction criteria and retain documentation that the checks were performed and when they were performed. In addition, we recommend that the Organization update these checks on an annual basis. Views of responsible officials and planned corrective action Management concurs with Finding 2026-002 and reports that the related corrective actions have been completed. The finding carried over from the prior audit period and has been resolved by management through implementation of the vendor verification and documentation procedures described in the corrective action outlined on page 39.