Finding Text
Incorrect Grant Drawdown – Allowable Costs / Reporting – Assistance Listing Numbers: 93.224 and 93.527 Consolidated Health Center Cluster Type of Finding: Material Weakness in Internal Control over Compliance Condition: During grant drawdown testing, it was noted that on December 6, 2024, management drew down $79,942 from the CARE Grant that related to expenditures attributable to the PREP Grant. No documentation or evidence of communication with the Health Resources and Services Administration (“HRSA”) was identified to demonstrate that the error was reported or corrected in a timely manner. This indicates that controls were not operating effectively to ensure grant drawdowns were made from the appropriate federal award. Criteria: Title 2 CFR §200.302 and §200.305 require non-Federal entities to maintain effective internal control over federal awards and ensure that drawdowns are limited to allowable costs incurred under the applicable award. Additionally, HRSA grant terms and conditions require recipients to request funds only for expenditures attributable to the specific grant award. Effect: Drawing funds from an incorrect federal award increases the risk of noncompliance with federal requirements and may result in unallowable costs, inaccurate reporting, or the need for repayment if not timely identified and corrected. Context: The exception noted represents a grant drawdown of $79,941.72 from the CARE Grant that was attributable to expenditures under the PrEP Grant, with no evidence of timely correction or notification to HRSA identified during audit testing. Questioned Costs: $79,942 Cause: Controls designed to ensure grant expenditures were properly aligned with the correct federal award prior to drawdown were not operating effectively, and procedures for identifying, reporting, and correcting drawdown errors were not consistently applied. View of Responsible Officials: Management agrees with the finding. Recommendation: We recommend that the Organization strengthen internal controls over grant drawdowns by implementing procedures to ensure expenditures are reviewed and reconciled to the appropriate federal award prior to requesting funds. Management should also establish formal procedures for timely identification, documentation, and communication of drawdown errors to the awarding agency when identified. Planned Implementation Date of Corrective Action: Fiscal Year 2026