Finding Text
Item 2025-003 - Period of Performance - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Per the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), specifically §200.77 and §200.309, costs must be incurred during the period of performance stated in the federal award. The HRSA Notice of Award for Section 330 grants also explicitly defines the budget period and restricts reimbursement to allowable costs incurred within the said timeframe. Statement of Condition: During our audit, we noted that LBUCC drew down $190,688 of federal grant funds under the Section 330 program for the budget period beginning June 1, 2024 to reimburse salary expenses incurred in May 2024. Cause: LBUCC did not have adequate controls in place to ensure that expenses reimbursed under the Section 330 grant aligned with the grant’s defined period of performance, which resulted in salary costs incurred prior to the start of the budget period to be improperly included in the drawdown request. Effect: Failure to draw funds for eligible expenses incurred within the period of performance expose LBUCC to potential repayment obligations or restrictions on future grant funding. Questioned Costs: None. Although LBUCC drew down $190,688 of salaries incurred in May 2024 from the budget period that began on June 1, 2024, LBUCC still had more than $190,688 worth of salaries of employees who worked on the Health Center Program Cluster but have not been charged to the Health Center Program Cluster. Since LBUCC is able to replace the May 2024 salaries with salaries that were incurred within the program period we do not deem that there is any questioned cost in relation to this finding. Context: There are 67 employees whose salaries were incurred in May 2024 and charged to the budget period that began June 1, 2024. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement procedures to ensure that all drawdowns are supported by expenses incurred strictly within the grant’s approved period of performance and train staff on grant compliance requirements. Management Response: Management agrees with the finding and will implement these measures to strengthen their grant management practices and to prevent future noncompliance.