Finding Text
2026-001 Period of Performance Program Information Federal Organization U.S Department of Health and Human Services Assistance Listing Numbers 93.224 Health Center Program Cluster Award Numbers H80CS00540‐24‐08 Criteria [ ] Compliance Finding [X] Significant Deficiency [ ] Material Weakness Title 2 CFR 200.403(h) requires that costs be incurred in the approved budget period for the applicable awards and Title 2 CFR 200.403(e) requires that those costs be determined according to GAAP. Condition The Organization’s expenditures allocated to the federal program included costs for salaries outside of the approved budget periods for the awards. This finding appears to be an isolated incident. Cause The Organization’s internal controls over compliance did not identify certain payroll expenditures from the prior accounting period and remove them from the listing of expenditures eligible for reimbursement in the current period. Effect Including out-of-period costs in the expenditures eligible for reimbursement increases the risk of noncompliance with the period of performance requirements. The Organization may allocate salaries outside of the grant period to the federal awards. Questioned Costs None noted. Context In a sample of 25 transactions tested, we noted three transactions that related to salaries for services provided outside of the budget period of the award. However, follow-up procedures indicate that there were sufficient eligible expenditures to cover the total funding received during the period. Recommendation We recommend management implement controls to verify that all expenditures allocated to federal programs, including salaries and wages, were incurred in the budget period of the award. Views of responsible officials and planned corrective action Management concurs with Finding 2026-001. Management acknowledges that while the incident was isolated and sufficient total eligible expenditures existed to support the funding received, the review process of the payroll expenses failed to identify and remove the expenses from the current budget period of the award. See corrective action outlined on page 39.