NH COMMUNITY BEHAVIORAL HEALTHNon-Profit

Condition: Assistance Listing No. 93.104 (the Grant) required a $1 federal to $1 non-federal matching ratio. For the period August 31, 2023 through August 30, 2024, management tracked $500,000 of federal expenditures under the Grant, however, supporting documentation reflected only $498,287 of qualifying non-federal match, resulting in a shortfall of $1,713. In addition, expenditures were tracked across two funding sources within a single spreadsheet without clearly distinguishing which grant funds were utilized. While management discussed matching levels with the New Hampshire Department of Education (the Grantor), this understanding was not documented or reflected in internal records, and guidance from the Grantor regarding application of matching requirements was limited. Criteria: Federal grant requirements require expenditures to be properly matched and charged to the appropriate award in accordance with the grant agreement. Cause: Management utilized a spreadsheet to track two (2) funding sources as a single program, which did not clearly distinguish expenditures by grant. In addition, while discussions occurred with the Grantor regarding matching considerations, these were not documented or incorporated into internal records. Control procedures did not ensure that matching support and grant tracking spreadsheet were consistently reflected in the underlying records based on the grant requirements. Effect: The lack of controls resulted in a misstatement of federal expenditures reported on the SEFA, which was subsequently corrected through an audit journal entry. The misstatement did not result in federal funds being expended on unallowable costs, as the expenditures were allowable in nature and were able to be reallocated to another underutilized federal award with the same program purpose. Recommendation: We recommend management strengthen and formalize its review procedures over reimbursement requests to ensure matching requirements are met and expenditures are properly supported prior to reporting. Management’s Response: The Organization did not receive directive from the Department of Education (grantor) as to which grant source was used to issue reimbursement for services. Tracking of the drawdown of funds was based on total grant funding (two sources) identified in the grant agreement with the DOE. During the audit process, the Organization provided a letter to the DOE advising of how grant dollars should have been allocated based on available funds and effective date limitations within the System of Care grant. Going forward, as recommended by the Auditor, the Organization will implement more detailed tracking processes that clearly account for dollars expended based on funding source and will ensure this detail will be obtained from the grantor upon receipt of each payment.

Condition: During the year ended June 30, 2025, NH Community Behavioral Health Association (the Association) passed through $772,039 in federal funds under Assistance Listing No. 93.104 to ten (10) subrecipients. The Association did not have procedures in place to request and review subrecipients’ Single Audit reports or otherwise monitor whether federal expenditures passed through were properly reported by subrecipients. Upon subsequently requesting the Single Audit reports from applicable subrecipients, it was noted that federal expenditures related to funds passed through by the Association were not identified on certain subrecipients’ Schedules of Expenditures of Federal Awards (SEFA). Specifically, expenditures related to Assistance Listing No. 93.104 and Assistance Listing No. 84.425U passed through by the Association were not identified in five (5) of the subrecipients’ Single Audit reports. Criteria: In accordance with Subrecipient Monitoring and Management, pass-through entities are responsible for monitoring the activities of subrecipients to ensure that federal awards are used for authorized purposes and that subrecipients comply with applicable federal requirements. Monitoring procedures include reviewing subrecipients’ Single Audit reports and following up on any findings related to federal awards provided by the pass-through entity. Cause: The Association did not have a formal process or internal control system in place to request, obtain, and review Single Audit reports from subrecipients receiving federal funds. Effect: As a result, the Association did not identify that federal expenditures passed through to subrecipients were not reported on the subrecipients’ SEFAs. This resulted in noncompliance with federal subrecipient monitoring requirements and resulted in incomplete or inaccurate reporting in the subrecipients’ Single Audit reports, including potential impacts on the subrecipients’ major program determinations. The full impact of the omission has not been determined. Management’s Response: The organization obtained Single Audit reports from subrecipients and reviewed those reports. The organization supplied each subrecipient with a letter documenting what expenditures should be reported as part of this grant program and will implement additional follow-up procedures to verify that Single Audit reports are complete and include all required federal awards. The organization will evaluate prior-year reporting for potential impacts and follow up with subrecipients as necessary. Going forward, all future pass-through payments to subrecipients will include documentation as to the grant funding being used for said payments, including grant name, ALN, FAIN, grant date restrictions, and expenditures paid. At the conclusion of a grant program, a final notice will be provided outlining all payments that have been issued with the same details as listed previously. These procedures will be implemented beginning immediately and will be performed on an ongoing basis.

Condition: Accounting personnel accumulate invoices from the Community Mental Health Centers (CMHCs) for reimbursement under the COVID-19 Education Stabilization Program (aka the DOE Summer Camp program). After the invoices are accumulated the same accounting personnel prepares an invoice and submits the invoice and support to the State of New Hampshire, Department of Education (NH DOE) for reimbursement. While conducting our audit, we noted that no supervisory review of invoices from July through November prior to mailing them to the NHDOE. Criteria: Implementing the control to review invoices will allow for use of federal funds to be more closely monitored. Cause: There was no procedure in place to review invoices prepared and submitted to the State of New Hampshire, Department of Education for expense reimbursements prior to recommendations made by the auditor as part of their engagement as of and for the year ended June 30, 2023. Effect: The lack of controls did not result in known material non-compliance, however, it is reasonably possible that this deficiency could have resulted in non-compliance or misappropriation of assets. Specifically, the lack of supervisory review could have resulted in reimbursement of costs that are not allowed, reimbursement of expenses for activities that are unallowed, and/or misappropriation of federal funding whether due to inadvertent error or intentional misappropriation of assets. Recommendation: We recommend that the appropriate personnel continue the process of reviewing invoices prior to requesting reimbursement from the NH DOE.

Condition: Management and the Board of Directors incorrectly assumed the Association did not have a Single Audit requirement for fiscal year ending 2023. There is a control established for management and Board of Directors to review funding agreements, however, the control was ineffective at identifying the Single Audit requirement. Criteria: The Association’s review of funding source agreements should properly identify Single Audit requirements. This is vital to ensure all of its obligations and requirements are completely fulfilled. Cause: There was a procedure in place to review grant and other funding source agreements, however, the Single Audit requirement was not appropriately identified. Effect: It’s reasonably possible that this deficiency could have resulted in non-compliance of the Single Audit requirement as well as the direct and material compliance requirements associated with the federal funding program. Unchecked compliance and internal controls over compliance could have resulted in undetected issues. It is vital to ensure the Associations identifies all of its obligations and requirements and allocates resources necessary to ensure they are completely fulfilled. Recommendation: We recommend that personnel review contract and grant agreements to properly identify Single Audit requirements. We also recommend, if there is any uncertainty in source of funds (Federal v. State), that appropriate Federal and State officials are contacted to resolve the uncertainty.

Condition: Accounting personnel accumulate invoices from the Community Mental Health Centers (CMHCs) for reimbursement under the COVID-19 Education Stabilization Program (aka the DOE Summer Camp program). After the invoices are accumulated the same accounting personnel prepares an invoice and submits the invoice and support to the State of New Hampshire, Department of Education (NH DOE) for reimbursement. While conducting our audit, we noted that no supervisory review of invoices prior to mailing them to the NHDOE. Criteria: Implementing the control to review invoices will allow for use of federal funds to be more closely monitored. Cause: There was no procedure in place to review invoices prepared and submitted to the State of New Hampshire, Department of Education for expense reimbursements. Effect: The lack of controls did not result in known material non-compliance, however, it is reasonably possible that this deficiency could have resulted in non-compliance or misappropriation of assets. Specifically, the lack of supervisory review could have resulted in reimbursement of costs that are not allowed, reimbursement of expenses for activities that are unallowed, and/or misappropriation of federal funding whether due to inadvertent error or intentional misappropriation of assets. Recommendation: We recommend that appropriate personnel review invoices prior to requesting reimbursement from the NH DOE.