HRSA Grant Self-Reporting Memo Deficiencies, Investigation, Reporting and Corrective Actions January 15, 2026 RE: Grant Number (FAIN): CE152520, under Assistance Listing Number: 93.493, Award Number: CE1HS52520-01-06 (the “Grant”) Federal Award Date: 9/21/2023 Grant Title: Community Project Funding/Congressionally Directed Spending - Construction Grantee: Spokane Guilds’ School (Unique Entity ID: DZJ5TZ4LGWH3, EIN: 91-0863163) (d/b/a Joya Child & Family Development “Joya”) 1016 N Superior St. Spokane, WA 99202 Grantee Contact: Colleen Fuchs, Executive Director Grant Purposes: Alteration and Renovation to Existing Facility, and related Equipment and other costs, to create Joya’s Neurodevelopmental Research & Training Institute Grant Amount (Per Notice of Award, Section 31. Approved Budget): e. Equipment $ 690,195.00 h. Construction/Alteration and Renovation $ 2,377,431.00 i. Other $ 117,114.00 Total Direct Costs $ 3,184,740.00 Less: Cost Sharing or Matching $ 184,740.00 Total Amount of Federal Share $ 3,000,000.00 Background: Joya’s facility was constructed from March 2021 to June 2022, and funded via private charitable contributions received from donors and a loan from Joya’s bank. The facility was placed in service in June, 2022 for a total approximate cost of $13.0 million. The facility is utilized by Joya, a 501(c)(3) non-profit organization, to house programs that provide physical, occupational, speech and other therapies to children with neurological and developmental delays, primarily from birth to three years of age. In Fall of 2022, Joya applied for a $3.0 million grant from HRSA to improve its facility to include a Neurodevelopmental Research & Training Institute and expand its services. The Grant was awarded to Joya, and Joya awarded a construction contract to the General Contractor who had completed its facility in 2022. The facility improvements were substantially completed in 2025. As of the date of this memo, approximately $123,000 remains available to Joya under the Grant. Procedural Deficiencies: 1. Competitive Bid (Eide Bailly Finding # 2025-001): In April 2025, during a selfreview of Joya’s compliance with 45 CFR Sections 75.326 to 75.335, specifically the required procurement procedures, management discovered that Joya’s procurement procedures were deficient in the following specific area. Joya’s policies and procedures did not require public notice to be issued regarding a competitive bidding process for the facility improvements, specifically the construction contract award, as required in the CFR. The contract was awarded to the same contractor who had recently constructed the original facility, as the contractor possessed critical knowledge of the facility along with the requisite skills to perform the improvements. However, market cost information (obtained through a public bid process) was not available. Further, a sample of nine transactions (out of 43 total transactions) indicated that contracts for three vendors between $10,000 and $250,000 required Joya to follow simplified acquisition procedures and obtain rate quotations in advance of procurement. 2. Proportion of Federal to Non-Federal Share (Eide Bailly Finding # 2025-002): Later in 2025, Joya engaged its independent CPA firm, Eide Bailly to audit its financial statements, and as part of that, to issue an opinion on its internal controls over financial reporting and on compliance with certain provisions of laws, regulations, contracts and grant agreements. During its review, the CPA firm discovered that Joya’s procedures regarding matching/cost sharing were deficient. Joya’s policies and procedures did not have suicient internal controls to ensure that grant funds were drawn down following the required proportion of (i) the Federal Share of Grant funds in proportion to (ii) the Cost Sharing/Matching Grant funds. Following a review of Joya’s financial records, it was determined that Joya’s contribution of its Non-Federal Share of improvement costs was approximately $12,000 lower than the amount required by the defined contract proportion, through June 30, 2025. Self-Investigation and Reporting: Joya’s investigation and specifically its review of the Grant requirements and the CFR language in April 2025, along with its seeking an independent review of its internal controls resulted in identifying both procedural deficiencies described above. Corrective Actions: The following corrective actions to address the Procedural Deficiencies have all been completed, as further described below. 1. Joya’s Director of Business and Accounting (B. Judge) timely notified its independent CPA firm, Eide Bailly, which described the internal control deficiencies in its qualified opinion to its Independent Auditor’s Report on Internal Control and Compliance for the year ended June 30, 2025. The CPA firm did not qualify its separate opinion to Joya’s Audited Financial Statements for the year ended June 30, 2025. 2. In April 2025, Joya’s Director of Business and Accounting (B. Judge) sought technical guidance and approval from Joya’s board of directors and its independent CPA firm. By June 2025, Mr. Judge had updated Joya’s policies and procedures to include the required internal controls described above. 3. Joya’s Director of Business and Accounting (B. Judge) engaged MACC Estimating Group, an independent construction estimation firm in Liberty Lake, WA, to obtain an itemized cost estimate for the facility improvements funded by the grant. The independent results issued on June 24, 2025 were only 6% higher than the awarded contractor bid. Joya’s management believes this provides a reasonable market cost for its awarded project. 4. On April 18, 2025, Joya’s Director of Business and Accounting (B. Judge) emailed HRSA sta members A. Glasser and C. Barnes, oicially notifying HRSA of its procurement policy deficiencies. HRSA (A. Glasser, Grants Management Specialist) responded via email on April 18, 2025, asking about the procurement process Joya ultimately used, and informing Joya as follows: “At this time, all HRSA conditions for award CE1HS52520 have been met, and you are free to draw down funds from document number 23CE1HS52520 in the Payment Management System. However, please ensure that the terms outlined on the Notice of Award dated 9/21/23 are followed. If you have specific questions regarding these terms, I am happy to discuss further.” Joya has received no further correspondence from HRSA on the matter. 5. Joya’s Director of Business and Accounting (B. Judge) continued to monitor its procurement process and proportional cost sharing to remain in compliance with 45 CFR Sections 75.326 to 75.335. Specifically, Joya’s Accounting Policies were updated in 2025 to include the following internal controls, as reviewed and amended from time to time: “If a purchase is funded in whole or in part by a Federal Grant, any related procurement or payment must comply with Federal Grant Procurement policies and applicable Federal Regulations under 2 CFR §§ 200.317– 200.327, including, but not limited to: • Following allowable procurement methods (micro-purchase, small purchase, sealed bids, competitive proposals, or noncompetitive proposals) • Obtaining multiple quotes when required and providing public notice requesting sealed competitive bids for expenditures over $250,000 • Avoiding conflicts of interest • Ensuring that contractors have not been suspended or debarred • Documenting the basis for selection and price reasonableness • Ensuring that Joya monitors expenditures to ensure that it maintains the appropriate proportion of Federal Share of Grant funds in proportion to the Cost Sharing/Matching Grant funds”. 6. In February 2025, Joya received a private grant in the amount of $178,000 from a private donor, which served as 96% of the required shared/matching funds Joya required for the entire Grant. These and other Joya funds are suicient to meet 100% of the required shared/matching funds.