Finding 11776 (2023-002)

Material Weakness

Requirement

Questioned Costs

Year

2023

Accepted

2024-02-05

Audit: 15605

Organization: Hcc Network (MO)

Auditor: Forvis LLP

AI Summary

Core Issue: Internal controls over cash management were ineffective, leading to early cash draws before actual expenditures.
Impacted Requirements: Non-compliance with cash management criteria (45 CFR 75.305) resulted in deferred grant revenue.
Recommended Follow-Up: Implement procedures to ensure cash draws occur no earlier than three days before allowable expenditures are disbursed.

Finding Text

Grants for Capital Development in Health Centers – CFDA No. 93.526 U.S. Department of Health and Human Services Award No. 6 C8ECS44310-01-05 Program Year 2023 Criteria or Specific Requirement – Cash Management (45 CFR 75.305) Condition – The Organization’s internal controls over the grant budget and cash drawdown process were not operating effectively to ensure allowed expenditures were incurred prior to drawdown. Questioned cost – None Context – Grant funds were drawn down prior to disbursements of expenditures within the grant period for six draws during the fiscal year ended June 30, 2023. Effect – Grant funds were drawn down sooner than administratively necessary. The final six draws were not earned as of the end of the grant period and are reflected as deferred grant revenue. A budget modification was subsequently approved by the HRSA and the deferred grant revenues were subsequently obligated and expended. Cause – The Organization’s initial grant budget was not in compliance with the grant requirements and required a budget modification subsequent to when the Organization had already completed cash draws. Identification as a repeat finding, if applicable – Is not a repeat finding. Recommendation – The Organization should ensure procedures are followed to prevent cash draws from being drawn down sooner than three days prior to disbursement of allowable expenditures.

Corrective Action Plan

View of Responsible Officials and Planned Corrective Actions: When the grant was awarded in August of 2021, it was budgeted for the renovation and equipment for the new clinic in Carrollton. HCC Network had previously received another capital award that was also budgeted for renovation of the same project. Expenses were incurred on the project and draws were made according to policy. In September of 2023, it was identified that we could not use both capital grants on the same project, and we were advised by HRSA to change the project of the grant to equipment only. Due to the fact that the equipment was purchased after construction, it made the draw downs appear to be out of policy as they were drawn when the construction invoices were paid. In the future, HCC Network will work with HRSA to get clarification on any restrictions on grants prior to drawing funds. Organization contact persons responsible for corrective action: Jonelle Hall – Chief Financial Officer Lori Wyse – Grants Manager Anticipated completion date: June 30, 2024

Other Findings in this Audit

11773 2023-001

Significant Deficiency Repeat
11774 2023-001

Significant Deficiency Repeat
11775 2023-001

Significant Deficiency Repeat
588215 2023-001

Significant Deficiency Repeat
588216 2023-001

Significant Deficiency Repeat
588217 2023-001

Significant Deficiency Repeat
588218 2023-002

Material Weakness

Programs in Audit

ALN	Program Name	Expenditures
93.527	Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program	$2.07M
93.224	Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care)	$1.76M
93.493	Congressional Directives	$1.24M
93.912	Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality Improvement	$843,894
10.766	Community Facilities Loans and Grants	$477,299
32.006	Covid-19 Telehealth Program	$285,872
93.526	Affordable Care Act (aca) Grants for Capital Development in Health Centers	$223,122
93.778	Medical Assistance Program	$144,860
93.323	Epidemiology and Laboratory Capacity for Infectious Diseases (elc)	$107,114
93.107	Area Health Education Centers Point of Service Maintenance and Enhancement Awards	$103,876
93.322	Csels Partnership: Strengthening Public Health Laboratories	$100,000
93.332	Cooperative Agreement to Support Navigators in Federally-Facilitated and State Partnership Marketplaces	$54,566
93.391	Activities to Support State, Tribal, Local and Territorial (stlt) Health Department Response to Public Health Or Healthcare Crises	$16,966
93.800	Organized Approaches to Increase Colorectal Cancer Screening	$13,967
93.969	Pphf Geriatric Education Centers	$8,000
21.027	Coronavirus State and Local Fiscal Recovery Funds	$1,050