Finding Text
Finding: Allowable Activities and Allowable Costs
Federal Assistance Listing No. 93.527 Affordable Care Act (ACA) Grants for New and
Expanded Services Under the Health Center Program Cluster
Award #: 1 Q8VCS45450-01-00, Award year: March 1, 2022 – February 29, 2024
U.S. Department of Health and Human Services, Health Resources and Services
Administration
Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards; Subpart E – Cost Principles; General Provision – Policy Guide (2 CFR
200.400): The application of cost principles is based on the fundamental premises that: The
accounting practices of the recipient and subrecipient must be consistent with these cost
principles and support the accumulation of costs as required by these cost principles,
including maintaining adequate documentation to support costs charged to the federal
award.
Condition: During our review of expenditures of federal funds under the Health Center
Program Cluster, certain cost principles were not consistently applied to all expenses. The
Organization received a grant for the purpose of expanding electronic health record systems,
which ended in February of 2024; however the contracted vendor had not completed work
for which the grant funds had been appropriated within the 120 day grant close out period.
Questioned Costs: $880,535. Questioned costs were related to a single grant within the
Health Center Program cluster. The value was determined based on the two vendor invoices
paid to the vendor at the end of the grant period but prior to work performed.
Context: We tested a sample of 24 expenditures out of a population of 230 expenditures
recorded to the grant for $1,906,159 of the total expenditures $5,711,364 and noted the
above issue. A non-statistical sampling methodology was used to select the sample.
Effect: The Organization did not consistently cost principles under Uniform Guidance. Costs
were incurred using federal funds prior to services rendered.
Cause: The Organization did not have adequate internal controls in place to ensure cost
principles under Uniform Guidance were consistently applied.
Identification as a repeat finding: Not applicable.
Recommendation: The Organization should coordinate with HRSA to determine allowability
of expenditures incurred. The Organization should add internal controls to monitor that cost
principles under Uniform Guidance are consistently applied.
Views of responsible officials: The Organization agrees with the finding. See separate
report for planned corrective actions.