Grantor: 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 CFDA Numbers: 93.224 and 93.527 Criteria A non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance and any costs incurred before the federal awarding agency or pass-through entity made the federal award 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 The Center may charge goods or services to the grant that are not within the grant's period of performance. Questioned Costs None. Context We selected 25 payroll transactions charged to the federal program to test controls over period of performance. Out of the 25 transactions tested, we noted 25 instances where there was no formal approval of the cost charged to the major program by evidence of a review signature on the labor reports. Additionally, we selected 3 nonpayroll transactions where all 3 instances did not have evidence of review. Identification of Repeat Finding Not a repeat finding. 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.
Criteria: Under Uniform Guidance, pass-through entities must monitor subrecipients to ensure compliance with federal program requirement, review financial and performance reports submitted by subrecipients, and ensure that subaward expenditures are supported and allowable before including them in reimbursement requests to the pass-through entity. Under 2 CFR 200.302(b) and 2 CFR 200.403(g), non-federal entities must maintain adequate documentation to support all costs charged to federal awards, including amounts reimbursed through subaward arrangements. Statement of Condition: During our testing over the subrecipient monitoring compliance requirement, we noted that although the Company was able to provide documentation supporting certain subaward expenditures, the Company was unable to provide documentation that reconciled or agreed to the specific amounts submitted to RIDOH for reimbursement. As a result, we were unable to verify that the subaward expenditures included in the reimbursement requests were fully supported by underlying subrecipient records and that they were appropriately monitored prior to submission. Cause of Condition: The entity did not maintain documentation of internal control activities beyond the minimum required retention period and did not have processes in place to preserve institutional knowledge during employee turnover. As a result, supporting records necessary for compliance over subrecipient monitoring of federal awards were no longer available. Effect of Condition: Because the support for subaward expenditures did not agree to the amounts submitted to RIDOH the Company is not in compliance with subrecipient monitoring requirements under Uniform Guidance, there is an increased risk that unallowable, inaccurate, or unsupported subrecipient costs may be included in reimbursement requests, RIDOH does not have adequate assurance that the Company performed required oversight of subrecipient financial activity, and unsupported reimbursement amounts may be subject to recovery by the pass-through entity. Questioned Costs: Questioned costs total $127,813, representing the total subawards where documentation of subrecipient monitoring could not be provided. Recommendation: We recommend that management (1) strengthen subrecipient monitoring controls to ensure subrecipient expenditures are reconciled to reimbursement request amounts, (2) implement a standardized reconciliation process and maintain supporting documentation in a centralized location, (3) train staff involved in subrecipient monitoring and reimbursement submissions on Uniform Guidance requirements, and (4) perform periodic internal reviews to ensure compliance and documentation completeness. Identification of Repeat Finding: This is a new finding. Views of Responsible Officials: Management understands and accepts the recommendation as outlined in the Corrective Action Plan.