Finding 484832 (2023-001)

2023-001: Congressional Directives SEFA Reporting Federal Agency: Department of Health and Human Services (“HHS”), Health Resources and Services Administration (“HRSA”) Assistance Listing Program Title: Congressional Directives Federal Award Project Title: Community Project Funding/ Congressionally Directed Spending ‐ Construction Assistance Listing Number: 93.493 Federal Award Identification Numbers: CE146569, CE152406, CE152466 Criteria OMB Uniform Guidance 2 CFR 200.510(b)(3) requires that the auditee provide the Federal awards expended for each individual Federal program on the Schedule of Expenditures of Federal Awards (“SEFA”). In accordance with 2 CFR 200.502, the determination of when a Federal award is expended, and thereby reported on the SEFA, is generally based on when the activity related to the Federal award occurs. Condition The Congressional Directives grant is a cost reimbursement based grant that reimburses award recipients for expenditures incurred on projects that relate to the construction and renovation (including equipment) of health care facilities. Jamaica tracked expenditures for SEFA reporting purposes on the basis of reimbursement from the sponsor, rather than expenditures incurred by Jamaica. Request for reimbursement for this award has not been made as of the date of this report. As a result, the expenditures reported by Jamaica on its draft 2023 SEFA were understated by the entire amount of the Congressional Directive grant’s expenditures incurred in 2023. This has been corrected by management in the final SEFA included in this report. There was no impact to our audit scoping given this award was included on the final SEFA and included as a major program. Questioned Costs None Cause Jamaica did not apply the accrual basis of accounting for the Congressional Directives grant to ensure proper reporting on the SEFA. Effect The draft 2023 SEFA omitted all 2023 expenditures incurred for the Congressional Directives grant, resulting in the draft SEFA expenditures being underreported by $2,904,920. This was corrected in the final SEFA included in this report, such that major program determination and audit scoping for the 2023 audit was not impacted, however, it would have been impacted if the final SEFA was not corrected (and reported on the accrual basis of accounting for the Congressional Directives grant). Recommendation We recommend Jamaica enhance their controls around grant terms and expenditures of allowable funds under federal award agreements to determine the appropriate amounts to be accrued and reported on the annual SEFA (regardless of when cash reimbursement is requested from the granting agency). Management’s Views and Corrective Action Plan Management’s Views and Corrective Action Plan is included at the end of this report.