Finding Text
Classification: Instance of Noncompliance / Known Questioned Costs Federal Program: Community Programs to Improve Minority Health / OASH HEALS (CFDA 93.137) Award Numbers: 1 CPIMP221349-01-00; 5 CPIMP211321-02-00 Compliance Requirement: Budget Management — 2 CFR §200.302(b)(7) Questioned Costs: $8,158.59 (known) Criteria. Under 2 CFR §200.302(b)(7), recipients must compare actual expenditures to budgeted amounts and may not exceed the approved award budget without prior written approval from the federal awarding agency. Condition. AHC expended approximately $492,170.59 against a combined OASH HEALS award budget of $484,012.00 ($370,000 under Award No. 1 CPIMP221349-01-00 and $114,012 under Award No. 5 CPIMP211321-02-00), exceeding the approved budget by $8,158.59 without prior written agency approval. The overage originated entirely under Award No. 1 CPIMP221349-01-00, for which cumulative FY2025 costs incurred (per GL account 4280 — DHHS-OASH HEALS) totaled $378,158.59 against an approved ceiling of $370,000.00. Of the $378,158.59 in program costs incurred under Award No. 1 CPIMP221349-01-00, only $370,000 was charged to and drawn from federal funds; the $8,158.59 excess was absorbed by AHC using non-federal, unrestricted resources and was not billed to or reimbursed by the federal award, consistent with the amount reported on the Schedule of Expenditures of Federal Awards. Management identified this condition and is addressing it with OASH. The matter is also disclosed in Note 14 of the financial statements. Cause. AHC’s budget monitoring controls did not provide timely notification that cumulative expenditures were approaching the combined award ceiling. Effect. Expenditures of $8,158.59 in excess of the approved budget constitute known questioned costs under 2 CFR §200.516(a)(3). Although below the $25,000 reporting threshold for likely questioned costs, this amount is required to be reported as a known questioned cost for a major program compliance requirement. Recommendation. AHC should implement monthly budget-to-actual tracking for each federal award with alerts when expenditures approach award ceilings, and should obtain prior agency approval before exceeding approved budget limits. AHC should work with OASH to resolve the current over-award and document the agency’s allowability determination. Management’s Response. See accompanying Corrective Action Plan.