Finding Text
Finding #: 2022-003 Period of Performance – Noncompliance (not material to compliance requirement)
Identification of Federal Program and Award
Program title: U.S. Department of Health and Human Services (DHHS): Public Health Services Act, Title III, Section 330 (Health Center Cluster)
CFDA #: 93.224/93.527 Award #: H8DCS36483 Program Year: 2022
Criteria
Pursuant to 2 CFR sections 200.308, 200.309, and 200.403(h), a non-Federal entity may charge to the Federal award only allowable costs incurred during the approved budget period of a federal award's period of performance and any costs incurred before the Federal awarding agency or pass-through entity made the Federal award that were authorized by the Federal awarding agency or pass-through entity. Pursuant to 2 CFR section 200.305(b)(5), to the extent available, the non-Federal entity must disburse funds available from program income and interest earned on such funds before requesting additional cash payments.
Condition
During our testing of period of performance, we noted instances of noncompliance relating to the health center’s recognition of expenditures beyond the award’s period of performance. After inspection of invoices and canceled checks supporting disbursements tested, the auditor identified 3 out of 40 expenditures where costs were incurred after the period of performance end date. Upon further investigation, the auditor determined that $153,005 of the $433,455 amount reported as 2022 federal expenditures under award H8DCS36483 was incurred beyond the period of performance end date.
Cause
Health center personnel were not following financial expense allocation of revenue policies and procedures, which state that federal funds will be utilized according to regulations and what is established on the budget information form submitted with the grant application.
Effect
Possibility of interest payments due, and of draw down restriction being placed on Payment Management System (PMS) account or denial of future funding.
Questioned Costs
$153,005
Perspective Information
We tested a statistically valid sample of 40 out of 250+ federal expenditures and determined that the audit finding represented a systemic problem.
Repeat Finding
This finding is not a repeated finding.
Recommendation
We recommend that management review financial expense allocation of revenue policies and closely monitor grant procedures in place to ensure CAMcare is in compliance with budget information stipulated in grant agreements.
Views of Responsible Officials
Management recognizes the noncompliance; on November 29, 2023, CAMcare’s CEO, Jillian Hudspeth, and CFO, Christopher Bernardi, agreed with this finding, and explained that the issue occurred during a time period when none of the current authorizing officials were employed by CAMcare.