Finding Text
Finding Number: 2022-001 Finding Type: Significant deficiency in internal controls over compliance and compliance related to period of performance and cash management Information on the Federal Program: Program Name: Health Center Program Cluster (AL numbers 93.224 and 93.527) Award Number: 5 H80CS00630-21 Award Period: April 1, 2022 to March 31, 2023 Agency: U.S. Department of Health and Human Services (HHS), Health Resources and Services Administration (HRSA) Criteria: In accordance with the U.S. Code of Federal Regulations (CFR), 45 CFR 75.309(a), a non-Federal entity may charge to the Federal award only allowable costs incurred during the period of performance unless authorized by the Federal awarding agency or pass-through entity. The period of performance is the time during which the non-Federal entity may incur new obligations to carry out the work authorized under the Federal award. Additionally, in accordance with 45 CFR 75.305(b)(1), the timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Condition: The Organization's grant period (period of performance) is April to March. The 2021/2022 grant award was fully expended in February 2022 and therefore there were no remaining grant funds available to cover March 2022 project costs. The 2022/2023 grant funds were available for cash draw on April 1, 2022. On April 1, 2022 and April 5, 2022, management drew down a total of $92,138 from the 2022/2023 grant funds for March 2022 payroll related expenses. Cause: While the Organization's system of internal controls related to cash management included controls to limit the amount of time elapsing between the grant draw and the actual cash disbursement for program costs, it did not include an element to verify the period of performance. Effect: The Organization drew down $92,138 in advance of allowable expenditure. The Organization has sufficient excess program related expenditures to support the use of the 2022/2023 grant funds during the period of performance and as a result, accrued limited interest on the advance draw. Questioned Costs: None Repeat Finding: No Recommendation: We recommend management modify procedures related to cash management to incorporate verification of period of performance as part of the cash draw approval process. Views of a Responsible Official and Corrective Action Plan: Management agrees with the finding and will modify procedures to verify expenses match the grant period.