Finding 1239520 (2025-001)

SECTION III - FEDERAL AWARDS FINDINGS AND QUESTIONED COSTS Ref. No. 2025-001 Noncompliance with Grant Award Terms - Significant Deficiency Federal agency: Department of Health and Human Services Program: ALN No. 93.558 Temporary Assistance for Needy Families Pass-through entity: State Department of Human Services Award number and award year: DHS-24-TANF-0116, June 3, 2024 to August 2, 2025 Criteria: Internal control requirements per 2 CFR §200.303 require a non-federal entity to establish and maintain effective internal control over a federal award that provides reasonable assurance that the entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. The DHS-24-TANF-0116 award specifically prohibits BGCH from charging youths or their families for programs or services provided under the award without prior approval from the State. Condition: During the year ended December 31, 2025, BGCH charged summer intersession fees to youth participants at all BGCH Clubhouses without obtaining prior State approval. Cause: BGCH did not have established formal policies and procedures for managing government awards, including a workflow for reviewing contract requirements and training responsible personnel before services commenced. Effect: BGCH improperly collected approximately $62,000 in summer intersession fees, of which was refunded to the youths and their families in May 2026. Without proper policies and procedures in place, there is an increased risk that noncompliance with federal award terms and conditions could occur and not be prevented, detected, and corrected, on a timely basis. Questioned Costs: None identified as part of this finding. The $62,000 relates to fees improperly collected from program beneficiaries rather than federal award funds expended by BGCH. Repeat Finding? No Recommendation: We recommend that management fully implement its corrective action plan submitted to the State Department of Human Services on March 4, 2026, which includes providing training to staff at all levels, refunding fees collected from youth member families, and establishing formal policies and standard operating procedures for managing government contracts. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding and the recommendation. See Part V Corrective Action Plan.