PATH, Inc.

United States Department of Health and Human Services Affordable Care Act Personal Responsibility Education Program (PREP) CFDA #93.092 HHS Agreement No.: 90AK0056-04 Year: 9/30/18 to 9/29/19 HHS Agreement No.: 90AK0056-05 Year: 9/30/19 to 9/29/20 Teenage Pregnancy Prevention Program CFDA #93.297 HHS Agreement No.: 1 TP1AH000191-01 Year: 7/15/19 to 6/30/20 Condition 2020-001 The Organization drew down federal funds based on a combination of expenses already incurred along with an estimate of pending expenses. There was neither detail for said estimate, nor any way to trace when said pending expenses were subsequently paid. In addition, the Organization did not have written procedures to minimize the time between receipt of federal funds and disbursement thereof. Criteria According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.305 Payment, specifically Section 200.305(b)(1), the non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this Part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Effect: The organization drew down funds in advance without meeting the cash management requirement for advances under Uniform Guidance. Cause: The Organization did not have an internal control structure in place to ensure that the requirements to draw down advance funds were met. Recommendation: The Organization should create an internal control structure in place to ensure that the requirements to draw down advance funds are met. Repeat Finding: Yes. Views of Responsible Officials: Management agrees and has revised their policies and procedures in regards to drawdowns.

United States Department of Health and Human Services Teenage Pregnancy Prevention Program CFDA #93.297 HHS Agreement No.: 1 TP1AH000191-01 Year: 7/15/19 to 6/30/20 Condition 2020-002 Out of a population of 27 transactions claimed to the grant in the first month of the grant performance period, eight transactions were selected for testing to determine if the Organization claimed expenses to the proper grant performance period. Of those eight transactions, there was one transaction claimed to the grant which was outside the grant performance period. Criteria According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.309, Period of Performance, a non-Federal entity may charge to the Federal award only allowable costs incurred during the 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. Effect: The Organization is not in compliance with period of performance requirements of Uniform Guidance. Cause: The Organization did not have an internal control structure in place to verify the appropriate grant period to which to apply specific grant expenditures. Recommendation: The Organization should implement an internal control structure to verify the appropriate grant period to which to apply specific grant expenditures. Repeat Finding: Yes. Views of Responsible Officials: Management agrees and has added limitations and new methodology to its Internal Controls regarding claimed expenses.

United States Department of Health and Human Services Affordable Care Act Personal Responsibility Education Program (PREP) CFDA #93.092 HHS Agreement No.: 90AK0056-04 Year: 9/30/18 to 9/29/19 HHS Agreement No.: 90AK0056-05 Year: 9/30/19 to 9/29/20 Teenage Pregnancy Prevention Program CFDA #93.297 HHS Agreement No.: 1 TP1AH000191-01 Year: 7/15/19 to 6/30/20 Condition 2020-003 There were 1,636 transactions which the Organization claimed to the grants during the fiscal year. Of that population, 60 transactions per grant were selected for testing. This resulted in a total sample size of 83, as many of the transactions selected were allocated in part to both grants. Within those 83 transactions, we noted four transactions for which supporting documentation could not be provided. In addition, there was no supporting documentation for allocations of payroll taxes and benefits for two months tested. Criteria: According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Subpart E - Cost Principles, specifically Section 200.400 (d) "The accounting practices of the non-Federal entity must...provide for adequate documentation to support costs charged to the Federal award." Effect: The organization claimed costs which could not be supported as either allowable or allocable under Uniform Guidance, and thus is not in compliance with Uniform Guidance. Cause: The Organization did not adhere to its record retention policy. Recommendation: The Organization should adhere to its record retention policy. Repeat Finding: No. Views of Responsible Officials: Management agrees and will review the Document Retention and Destruction Policy with staff.

United States Department of Health and Human Services Affordable Care Act Personal Responsibility Education Program (PREP) CFDA #93.092 HHS Agreement No.: 90AK0056-03 Year: 9/30/17 to 9/29/18 HHS Agreement No.: 90AK0056-04 Year: 9/30/18 to 9/29/19 Condition 2019-001 The Organization drew down federal funds based on a combination of expenses already incurred along with an estimate of pending expenses. There was neither detail for said estimate, nor any way to trace when said pending expenses were subsequently paid. In addition, the Organization did not have written procedures to minimize the time between receipt of federal funds and disbursement thereof. Criteria According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.305 Payment, specifically Section 200.305(b)(1), the non-Federal entity must be paid in advance, provided it maintains or demonstrates the willingness to maintain both written procedures that minimize the time elapsing between the transfer of funds and disbursement by the non-Federal entity, and financial management systems that meet the standards for fund control and accountability as established in this Part. Advance payments to a non-Federal entity must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash requirements of the non-Federal entity in carrying out the purpose of the approved program or project. The timing and amount of advance payments must be as close as is administratively feasible to the actual disbursements by the non-Federal entity for direct program or project costs and the proportionate share of any allowable indirect costs. Effect: The organization drew down funds in advance without meeting the cash management requirement for advances under Uniform Guidance. Cause: The Organization did not have an internal control structure in place to ensure that the requirements to draw down advance funds were met. Recommendation: The Organization should create an internal control structure in place to ensure that the requirements to draw down advance funds are met. Repeat Finding: No. Views of Responsible Officials Management agrees and has instituted limitations in regards to drawdowns.

United States Department of Health and Human Services Affordable Care Act Personal Responsibility Education Program (PREP) CFDA #93.092 HHS Agreement No.: 90AK0056-03 Year: 9/30/17 to 9/29/18 HHS Agreement No.: 90AK0056-04 Year: 9/30/18 to 9/29/19 Condition 2019-002 Twenty-five transactions were selected for testing to determine if the Organization claimed expenses to the proper grant period. Of those twenty-five transactions, there were five transactions claimed to the grant which were outside the grant period. Criteria According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.309, Period of Performance, a non-Federal entity may charge to the Federal award only allowable costs incurred during the 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. Effect: The Organization is not in compliance with period of performance requirements of Uniform Guidance. Cause: The Organization did not have an internal control structure in place to verify the appropriate grant period to which to apply specific grant expenditures. Recommendation: The Organization should implement an internal control structure to verify the appropriate grant period to which to apply specific grant expenditures. Repeat Finding: No. Views of Responsible Officials Management agrees and has added limitations to its internal controls regarding claimed expenses.

United States Department of Health and Human Services Affordable Care Act Personal Responsibility Education Program (PREP) CFDA #93.092 HHS Agreement No.: 90AK0056-03 Year: 9/30/17 to 9/29/18 HHS Agreement No.: 90AK0056-04 Year: 9/30/18 to 9/29/19 Condition 2019-003 The organization had 438 transactions claimed to the grant, exclusive of payroll and payroll related transactions. Of that population, 40 transactions were selected for testing. Within those 40 transactions, we noted one instance in which sales tax was claimed to the grant, and one instance in which mileage unrelated to the grant was claimed. Criteria According to 2CFR Section 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), Section 200.470 Taxes, specifically Section 200.470(b)(1) in general, taxes which the non-Federal entity is required to pay and which are paid or accrued in accordance with GAAP, and payments made to local governments in lieu of taxes which are commensurate with the local government services received are allowable, except for: (i) taxes from which exemptions are available to the non-Federal entity directly or which are available to the non-Federal entity based on an exemption afforded by the Federal government, and in the latter case when the Federal awarding agency makes available the necessary exemption certificates. Further, according to Uniform Guidance, costs must be both reasonable and necessary in order to be allowable under federal awards. Effect: The organization claimed costs which were not allowable under Uniform Guidance, and thus is not in compliance with Uniform Guidance. Cause: The Organization did not have a structure in place to ensure that those preparing grant claims were knowledgeable of all aspects of the requirements for allowable costs. Recommendation: The Organization should implement a structure to ensure that those preparing grant claims were knowledgeable of all aspects of the requirements for allowable costs. Repeat Finding: No. Views of Responsible Officials Management agrees and all expenditures will be reviewed before being claimed.