Finding 621790 (2022-003)

Material Weakness
Requirement
C
Questioned Costs
-
Year
2022
Accepted
2023-03-22

AI Summary

  • Core Issue: Grant funds were drawn in full before project completion, violating cash management requirements.
  • Impacted Requirements: Compliance with 45 CFR 75.305, ensuring funds are drawn proportionately to allowable costs incurred.
  • Recommended Follow-Up: Review grant terms for cash management requirements and monitor compliance closely; corrective actions are planned by June 30, 2023.

Finding Text

Grants for Capital Development in Health Centers Assistance Listing No. 93.526 U.S Department of Health and Human Services Criteria or Specific Requirement ? Cash Management ? 45 CFR 75.305 Condition ? The Organization is required to ensure that funds are down as allowable costs are incurred within the parameters of the federal program. Questioned Costs ? None Context ? While the award received by the Organization did not specify a federal share percentage, grant draws should be completed in the same proportion as the grant is to total project costs. The Organization identified qualifying expenditures and drew 100 percent of the grant funds awarded as of December 31, 2021. However, this was in advance of the project being completed. Funds totaling $255,892 were returned and the Organization was able to then draw these funds again upon completion of the project. Effect ? Grant funds were drawn in full in advance of the completion of the project. Cause ? The Organization did not properly draw grant funds in the same proportion as the grant is to total project costs. Identification as a Repeat Finding ? Not a repeat finding. Recommendation ? The Organization should review grant terms for all applicable requirements for the federal program, including applicable cash management requirements. Views of Responsible Officials and Planned Corrective Actions ? Due to COVID-19, the completion of the capital project had been delayed several times beyond the original grant end date. The extension request was submitted before the end date of the grant ? December 31, 2021, however due to the year-end holiday season no response was received in a timely manner. Hence, the organization identified 100% of the grant expenditures and drew down the remaining funds. After receiving clear guidance from the HRSA program manager, some funds were returned as advised and drawn later upon completion of the project. Management will closely monitor cash management requirements specified by each grant. Contact person responsible for corrective action: Eden Ballatan, CFO Anticipated Completion Date: 6/30/2023

Categories

Allowable Costs / Cost Principles Cash Management

Other Findings in this Audit

  • 45348 2022-003
    Material Weakness
  • 45349 2022-002
    Significant Deficiency
  • 621791 2022-002
    Significant Deficiency

Programs in Audit

ALN Program Name Expenditures
93.224 Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $4.31M
93.527 Affordable Care Act (aca) Grants for New and Expanded Services Under the Health Center Program $4.09M
93.526 Affordable Care Act (aca) Grants for Capital Development in Health Centers $850,000
93.498 Provider Relief Fund $500,504
93.217 Family Planning_services $200,802
93.224 Covid-19 - Consolidated Health Centers (community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) $121,874
14.267 Continuum of Care Program $100,429
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $75,310
93.958 Block Grants for Community Mental Health Services $31,320
93.569 Community Services Block Grant $26,000