SOUTHWESTERN AHEC, INC.Non-Profit

Condition: The Organization’s expenditure reports filed with the grantor for the cost reimbursement-based grant were overstated, and the Organization was overpaid by $182,167, of which $26,730 was received after year-end. The overpayment has not yet been refunded back to the grantor, over a year after the performance period of the grant had ended. Criteria: The Organization did not comply with 2 CFR 200.302 and 2 CFR 200.305 of the Uniform Guidance and the terms of the grant for the major program tested. Expenditure reports are required to be accurate and supported by the Organization’s financial management system, books, and records. The time between receipt of funds by the Organization and disbursement of funds by the Organization is required to be minimized. The grant agreement establishes that payments received in excess of qualifying expenditures occurred must be returned back to the grantor. Cause: The expenditure reports filed were based on estimates that later changed once more information was available. There was a weakness in controls involving the reconciliation of expenditure reports filed to the Organization’s financial management system, books, and records. Effect: The Organization was overpaid by $182,167. Recommendation: The Organization should coordinate with the grantor the return of the unspent funds. The Organization should reevaluate its grant expenditure reporting procedures to better mitigate the risk of inaccurate filing and improper reimbursement. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding. See the Corrective Action Plan.

Condition: The Organization did not maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327 of the Uniform Guidance, for procurement transactions under a federal award or subaward. The Organization also did not comply with 2 CFR 200.318 (h) and 200.214 of the Uniform Guidance including verifying that vendors for covered transactions are not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. There were two vendors with covered transactions charged to the major program. The vendors were not debarred, suspended, or otherwise excluded. However, the Organization did not perform and document the required verification. Criteria: The Uniform Guidance requires the Organization to maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327, for procurement transactions under a federal award or subaward. The Uniform Guidance 2 CFR 200.318 (h) and 200.214 also require the Organization to verify that vendors for covered transactions are not debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. Cause: The relevant procedures were not documented in a manner required by the Uniform Guidance. There was a weakness in controls involving compliance with procurement, suspension, and debarment requirements. Effect: The Organization was not in compliance with the Uniform Guidance. Recommendation: The Organization should draft and maintain documented procedures, consistent with the standards identified in 2 CFR 200.317 through 200.327 of the Uniform Guidance. Views of Responsible Officials and Planned Corrective Actions: The Organization agrees with the finding. See the Corrective Action Plan.

2023-001 93.137 Community Programs to Improve Minority Health Grant Program Type of Finding Material Weakness in Internal Control over Compliance Criteria Compliance requirements state the due date for the Quarterly Federal Financial Report for the period July 1, 2023 to September 30, 2023 was October 30, 2023. Condition AHEC filed the Quarterly Federal Financial Report for the period July 1, 2023 to September 30, 2023, on January 9, 2024. Questioned Costs None Cause AHEC did not maintain an adequate system of internal control over financial reporting to ensure the Quarterly Federal Financial Report for the period July 1, 2023 to September 30, 2023 was filed timely. Effect The Federal Financial Quarter Report for the period July 1, 2023 to September 30, 2023 was filed late. Recommendation We recommend that AHEC implement a system of internal control over financial reporting to ensure compliance with grant reporting deadlines. Management’s Response/Views of Responsible Officials and Planned Corrective Action AHEC concurs with the above finding. Corrective Action: AHEC will maintain a spreadsheet which will include reporting deadlines and a reporting calendar to include due dates of all reports for each grant award. Name of Contact Person: Fernando Morales, Executive Director 203-372-5503 fernandom@swctahec.org Projected Completion Date: The above corrective action will be completed by year ending September 30, 2024.