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Finding SA 2025-002: Reporting – Federal Financial Report Federal Program Information Assistance Listing Number: 93.918 Federal Program Name: Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Federal Agency: U.S. Department of Health and Human Services Pass-through Entities: Health Resources and Services Administration (HRSA) Contract Number and Name: H7646006, H7646007, H7646008, H7624724 - Ryan White Part C Outpatient EIS Program Compliance Requirement: Reporting Criteria or Specific Requirements Under 2 CFR Part 200.328, a recipient or subrecipient must submit the financial reports required by the federal award. For the Ryan White Part C Outpatient EIS Program, the Notice of Award requires program income to be accounted for using the addition method. In addition, the OMB 2025 Compliance Supplement, Part 6 – Internal Control, requires federal program recipients to maintain effective internal controls over federal award reporting. These controls should ensure that: Data presented is accurate, complete, and in accordance with the award terms Reports reconcile to accounting records and underlying support Review and approval processes are in place before submission Condition In performing reporting testwork over the Foundation’s submitted Federal Financial Report (FFR) for the grant year ending June 30, 2025, we noted that the program income was incorrectly classified and reported under the deduction method, instead of the addition method as required by the Notice of Award. Questioned Costs None. Cause and Effect Per inquiry with the Associate Director of Contract Accounting, the grantor required program income reporting on the FFR for the first time this period, and the guidance provided by the grantor for completing the related data fields was limited. As a result, certain fields were not completed as the grantor intended. The Foundation has requested additional clarification from the grantor to ensure accurate reporting going forward. Recommendation We recommend that management strengthen its controls and implement additional procedures over reporting compliance. These procedures should require management to: • Maintain a central reference and database of program income requirements by ALN, including whether the addition or deduction method applies; • Perform a formal review of FFR preparation to verify that each FFR report aligns with its award-specific requirements; • Provide targeted training regarding grants and Uniform Guidance reporting requirements (2 CFR 200.328) program income rules (2 CFR 200.307); • Perform a formal supervisory review and approval of FFRS before submission; and • Consult with granting agencies on whether a revised FFR is required to be submitted in accordance with grantor reporting requirements.