EIN: 363775696
UEI: KK9JAHYMNMS9
Data as of August 22, 2026
Management decision deadline — for entities that funded this organization
The FAC accepted this audit on May 26, 2026. Under 2 CFR 200.521(d), a pass-through entity that provided federal funds to this organization for this audit period must issue a management decision on these findings by November 26, 2026 (95 days from today).
What is a management decision? →During the Health Centers Program audit, it was noted that HAH did not follow their procurement policies as required by the Uniform Guidance 2 CFR 200.318. Criteria: 2 CFR 200.318 Questioned Costs: $0 Context: During the audit, it was noted that while the majority of program expenditures are salary and benefits, HAH did not follow their policies for procurement for other goods and services, and did not obtain multiple bids or sole source justification for three out of eight vendors selected for testing that exceeded the micro-purchases threshold. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH establish an updated procurement policy and designate an individual to review all purchases over the micro-purchases threshold and review procurement documentation to ensure it is sufficient before expenses are approved for payment. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Federal Procurement Regulations Significant Deficiency U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program and 93.527 - Grants for New and Expanded Services under the Health Center Program Federal Award Identification #: H80CS00111 Condition: During the Health Centers Program audit, it was noted that HAH did not follow their procurement policies as required by the Uniform Guidance 2 CFR 200.318. Criteria: 2 CFR 200.318 Questioned Costs: $0 Context: During the audit, it was noted that while the majority of program expenditures are salary and benefits, HAH did not follow their policies for procurement for other goods and services, and did not obtain multiple bids or sole source justification for three out of eight vendors selected for testing that exceeded the micro-purchases threshold. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH establish an updated procurement policy and designate an individual to review all purchases over the micro-purchases threshold and review procurement documentation to ensure it is sufficient before expenses are approved for payment. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Federal Procurement Regulations Planned Corrective Action: During the audit period, HAH experienced significant organizational transition, including separation from its parent organization, turnover in key administrative and finance positions, and the rebuilding of internal financial operations and controls. These circumstances contributed to inconsistent application and documentation of procurement procedures. To address this deficiency and prevent recurrence, HAH worked with HRSA Technical Assistance resources to develop an enhanced procurement policy and procedure, which is scheduled for Board approval in May 2026. In the interim, HAH has reinforced procurement requirements through staff training and communication regarding federal procurement standards. Additionally,management has implemented ongoing monitoring and compliance reviews of procurement activities to ensure adherence to policy requirements, including appropriate bid documentation and sole source justification when applicable Person Responsible for Corrective Action Plan: Donald McGruder, CFO Anticipated Date of Completion: Resolved
2024-007
FAC accepted this audit on November 17, 2025 — management decision was due May 17, 2026.
HAH did not have evidence of performing reasonable rent review for the 22 tenants tested as required by the Department of Housing and Urban Development (HUD). Criteria: 24 CFR 578.49(b)(2), 24 CFR 578.51 (g) Questioned Costs: $0 Context: For all 22 tenants selected as part of the audit testing, HAH did not perform procedures to assess rent reasonableness compared to unassisted units in the same property. While the rents paid did not exceed HUD’s published fair market rents (FMR), this assessment is required to be performed in accordance with program guidelines. Cause: Turnover at HAH. HAH has since transferred their Continuum of Care programs to another HAH and was unable to locate tenant files. Effect: Noncompliance with program requirements. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH make sure that the organization who took over the program maintains the program files for the required record retention period. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Reasonable Rent Review Material Weakness U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT ALN #: 14.267 - Continuum of Care Program Federal Award Identification #: IL0099L5T102215, IL0096L5T102215, IL0178L5T102215, IL0180L5T102215, IL0179L5T102215, IL0216L5T102215, IL0097L5T102215, IL0393L5T102214, IL0374L5T102212, IL0269L5T112215, IL0667L5T102206, IL0667L5T102206 Condition: HAH did not have evidence of performing reasonable rent review for the 22 tenants tested as required by the Department of Housing and Urban Development (HUD). Criteria: 24 CFR 578.49(b)(2), 24 CFR 578.51 (g) Questioned Costs: $0 Context: For all 22 tenants selected as part of the audit testing, HAH did not perform procedures to assess rent reasonableness compared to unassisted units in the same property. While the rents paid did not exceed HUD’s published fair market rents (FMR), this assessment is required to be performed in accordance with program guidelines. Cause: Turnover at HAH. HAH has since transferred their Continuum of Care programs to another HAH and was unable to locate tenant files. Effect: Noncompliance with program requirements. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH make sure that the organization who took over the program maintains the program files for the required record retention period. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Reasonable Rent Review Planned Corrective Action: The Continuum of Care (CoC) program was transitioned to another organization during FY2024 as part of a broader realignment of programs and services. Heartland Alliance Health no longer administers this program, and all compliance responsibilities, including tenant files and rent documentation, were transferred to the receiving entity. At the request of the auditors, Heartland Alliance Health has initiated contact with the new organization to confirm that all required program and tenant records have been properly transferred, secured, and maintained in compliance with HUD regulations. Person Responsible for Corrective Action Plan: Steve Knox, Controller Anticipated Date of Completion: Resolved
HAH did not minimize the time elapsing between drawdown of funds and expenditure of funds. Criteria: 45 CFR 75.305 Questioned Costs: $0 Context: Beginning in May 2024, HAH drew down approximately $830,000 of advanced funds from HHS, which were not completely expended until September 2024. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Excess cash on hand. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend HAH review Cash Management compliance requirements and update their policies and procedures to minimize the time between drawdown and expenditures of federal awards. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Compliance with Cash Management Requirements Material Weakness U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program Federal Award Identification #: 24H80CS00111 Condition: HAH did not minimize the time elapsing between drawdown of funds and expenditure of funds. Criteria: 45 CFR 75.305 Questioned Costs: $0 Context: Beginning in May 2024, HAH drew down approximately $830,000 of advanced funds from HHS, which were not completely expended until September 2024. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Excess cash on hand. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend HAH review Cash Management compliance requirements and update their policies and procedures to minimize the time between drawdown and expenditures of federal awards. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Compliance with Cash Management Requirements Planned Corrective Action: Heartland Alliance Health has established a formal Drawdown Policy and Procedure designed to ensure compliance with federal cash management regulations and to prevent premature or excessive drawdowns of grant funds. The policy includes specific requirements for timing, documentation, reconciliation of expenditures to draw requests, and internal approvals prior to submission. The Drawdown Policy and Procedure was reviewed and approved by the Board of Directors in October 2025. Person Responsible for Corrective Action Plan: Steve Knox, Controller Anticipated Date of Completion: Resolved
During the audit of the Health Centers Program, the SF-425 reporting tested. Reported amounts and totals could not be tied to underlying support. Additionally, two of the SF-425 reports were submitted late. Criteria: 45 CFR Part 75.302(b) Questioned Costs: $0 Context: During the audit, the SF-425 reporting was tested for three grant agreements. Reported amounts could not be tied to underlying support for federal expenditures during the period reported on based on the definitions provided in 45 CFR 75.2 for agreement 20H80CS00111. Additionally, two of the SF-425 reports (agreement 20H80CS00111 and 21H8FCS40976) , between 3-15 days late. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH maintain underlying accounting records for each report. We also recommend that reviews of these reports be implemented to ensure timely submission. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Inaccurate and Late Reporting Material Weakness U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program and 93.527 - Grants for New and Expanded Services under the Health Center Program Federal Award Identification #: 20H80CS00111, 21H8FCS40976 Condition: During the audit of the Health Centers Program, the SF-425 reporting tested. Reported amounts and totals could not be tied to underlying support. Additionally, two of the SF-425 reports were submitted late. Criteria: 45 CFR Part 75.302(b) Questioned Costs: $0 Context: During the audit, the SF-425 reporting was tested for three grant agreements. Reported amounts could not be tied to underlying support for federal expenditures during the period reported on based on the definitions provided in 45 CFR 75.2 for agreement 20H80CS00111. Additionally, two of the SF-425 reports (agreement 20H80CS00111 and 21H8FCS40976) , between 3-15 days late. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH maintain underlying accounting records for each report. We also recommend that reviews of these reports be implemented to ensure timely submission. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Inaccurate and Late Reporting Planned Corrective Action: Regarding underlying support, HAH now utilizes drawdown documentation for all draws; this will provide support for all draws and facilitate submission of accurate and timely SF-425 documentation. Some SF-425 submissions for FY25 will not be submitted timely, because the federal project officer has not approved the budget or because the drawdowns have not been completed; the federal shutdown has exacerbated this circumstance for FY25. As HAH gets caught up with federal drawdowns, HAH expects to be able to submit SF-425 documentation in a timely and accurate fashion. Person Responsible for Corrective Action Plan: Steve Knox, Controller Anticipated Date of Completion: April 2026
HAH did not retain documentation in support of services provided as part of the Health Centers Program. Criteria: 42 USC 254B Questioned Costs: $0 Context: During the audit, 3 out of 40 patients tested for allowable activities did not have the required documentation for medical services provided. 1 patient did not have a medical service code documented. 2 patients did not have the provider sign off that services were provided and allowable under the grant provisions. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements are met. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that all required information be documented in patient file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Compliance with Allowable Activities Significant Deficiency U.S DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program and 93.527 - Grants for New and Expanded Services under the Health Center Program Federal Award Identification #: 20H80CS00111, 24H80CS00111, 21H8FCS40976, 23H8GCS47647 Condition: HAH did not retain documentation in support of services provided as part of the Health Centers Program. Criteria: 42 USC 254B Questioned Costs: $0 Context: During the audit, 3 out of 40 patients tested for allowable activities did not have the required documentation for medical services provided. 1 patient did not have a medical service code documented. 2 patients did not have the provider sign off that services were provided and allowable under the grant provisions. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements are met. Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that all required information be documented in patient file. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Compliance with Allowable Activities Planned Corrective Action: Heartland Alliance Health has partnered with an outside revenue cycle management firm to strengthen documentation oversight, billing accuracy, and compliance monitoring. Together with internal Revenue Cycle staff, the external firm now generates and reviews weekly documentation and billing completeness reports to identify and resolve missing or incomplete encounter records. Clinic managers and providers receive weekly follow-ups to ensure that documentation is corrected promptly and that all billed services are properly supported. Person Responsible for Corrective Action Plan: Steve Knox, Controller Anticipated Date of Completion: Resolved
During the Health Centers Program audit, it was noted that HAH did not follow their procurement policies as required by the Uniform Guidance 2 CFR 200.318. Criteria: 2 CFR 200.318 Questioned Costs: $0 Context: During the audit, it was noted that while the majority of program expenditures are salary and benefits, HAH did not follow their policies for procurement for other goods and services, and did not obtain multiple bids or sole source justification for any purchases that exceeded the micro-purchases threshold. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH establish an updated procurement policy and designate an individual to review all purchases over the micro-purchases threshold and review procurement documentation to ensure it is sufficient before expenses are approved for payment. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Show full finding ▾Hide full finding ▴Federal Procurement Regulations Significant Deficiency U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES ALN #: 93.224 - Health Centers Program and 93.527 - Grants for New and Expanded Services under the Health Center Program Federal Award Identification #: 20H80CS00111, 24H80CS00111, 21H8FCS40976, 23H8GCS47647 Condition: During the Health Centers Program audit, it was noted that HAH did not follow their procurement policies as required by the Uniform Guidance 2 CFR 200.318. Criteria: 2 CFR 200.318 Questioned Costs: $0 Context: During the audit, it was noted that while the majority of program expenditures are salary and benefits, HAH did not follow their policies for procurement for other goods and services, and did not obtain multiple bids or sole source justification for any purchases that exceeded the micro-purchases threshold. Cause: Turnover at HAH, who separated from the parent entity in FY24 resulting in changes in procedures. Effect: Lack of internal control to ensure program requirements Identification as repeat finding, if applicable: Not applicable. Recommendation: We recommend that HAH establish an updated procurement policy and designate an individual to review all purchases over the micro-purchases threshold and review procurement documentation to ensure it is sufficient before expenses are approved for payment. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. See corrective action plan.
Federal Procurement Regulations Planned Corrective Action: Heartland Alliance Health developed and implemented a comprehensive Procurement Policy to ensure full compliance with federal Uniform Guidance requirements. The policy outlines required procurement methods, approval thresholds, documentation standards, and procedures for competitive bidding, price analysis, and sole-source justifications. The policy was reviewed and approved by the Board of Directors (October 2025) and is now in effect organization wide. Person Responsible for Corrective Action Plan: Steve Knox, Controller Anticipated Date of Completion: Resolved
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