CFDA Number: 93.224 Federal Program or Cluster: Health Center Program Cluster Grantor Agency: U.S. Department of Health and Human Services Federal Award Identification: H8FCS41177 Compliance Requirements: Period of Performance Type of Finding: Noncompliance/Material Weakness in Internal Control over Compliance Known Questioned Costs: $1,248,456 Criteria: Uniform Administrative Requirements, Cost Principles, and Audit Requirements for HHS Awards-45 CFR Part 75 (in effect on 9/30/2025) ("45 CFR Part 75") Section 75.309 Period of performance and availability of funds states that "a. A non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance and any costs incurred before the HHS awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Funds available to pay allowable costs during the period of performance include both Federal funds awarded and carryover balances." and "b. A non-Federal entity must liquidate all obligations incurred under the award not later than 90 days after the end of the funding period (or as specified in a program regulation) to coincide with the submission of the final Federal Financial Report (FFR). This deadline may be extended with prior written approval from the HHS awarding agency." Per the original Notice of Award for this program, the Budget Period Start Date was April 1, 2021 and the Budget Period End Date was March 31, 2023. The original Notice of Award, under Program Specific Terms, also states that "this notice of award provides onetime funding for a 2-year period of performance. In March, 2023, the Organization applied for and was granted a 12 month extension of the Budget Period End Date to March 31, 2024. Also, per the original Notice of Award, the FFR was due on July 30, 2024 - 120 days after the budget period end date, so per 45 CFR Part 75 Section 75.309, above, the deadline for liquidating all obligations for this federal awards was July 30, 2024. Condition: During July, 2024, the Organization drew the remaining H8F funds of $1,270,464, and recorded this amount as a credit to a balance sheet account, indicating these were unspent or unearned grant funds. Throughout the year ended May 31, 2025, as expenditures were made, the Organization recorded debits to this balance sheet account, crediting a grant revenue account. The Organization's internal controls over compliance failed to prevent, or detect and correct, this noncompliance. Cause: Organization personnel were not aware of the period of performance with respect to this federal award. The Organization's previous CEO retired approximately May 31, 2024. Per inquiry of the Organizaton's CFO, their understanding was that the deadline to obligate for this federal award was December 31, 2024, and the deadline to expend or liquidate was December 31, 2026. Effect or Potential Effect: By expending federal award funds that 1) were not obligated by the period of performance end date, and 2) that were not liquidated by 120 days after the period of performance end date, the Organization did not comply with the requirements of 45 CFR Part 75 Section 75.309. Context: We requested supporting detail of the $1,270,464 expenditures made during the year for this Federal award as reported in the Schedule of Expenditures of Federal Awards. We received a spreadsheet that contained a list of 26 descriptions and amounts, but no transactional detail such as check numbers, check dates, payee, invoice number, invoice date, etc. All were determined to be expenditures of the current fiscal year from June 1, 2024 through May 31, 2025, and, other than $22,008 that was obligated by contract entered into before the period of performance end date, were determined to have not been obligated by the period of performance end date and/or were determined to have not been liquidated by the July 30, 2024, deadline for liquidating obligations. Repeat finding? No Recommendation: We recommend that the Organization provide grants management training to all its financial staff and management covering the Uniform Guidance/OMB Guidance for Federal Financial Assistance. We also recommend that the Organization develop and implement policies and procedures that ensure: 1) all staff are aware of the the period of performance for each federal awards; 2) the Organization's financial management records and systems include the ability to monitor and track the status of each federal award throughout its period of performance, especially for one-time funding awards. Views of Responsible Officials: We agree with the finding. We have never received the proper training. See Corrective Action Plan for Reference 2025-004.