EveryStep

Federal Agency: Department of Health and Human Services Federal Program Name: Healthy Start Communities Assistance Listing Number: 93.926 Federal Award Identification Number and Year: H4900052 Award Period: 5/1/24-3/31/25 and 4/1/25-3/31/26 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR section 200.320 outlines the acceptable methods of procurement. Purchases below the simplified acquisition threshold, but above the micro-purchase threshold, require that price or rate quotations be obtained from an adequate number of qualified sources as determined appropriate by the non-Federal entity. Furthermore, the Organization's procurement policies require the maintaining of records sufficient to detail the history of procurement including the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. Condition: CLA identified vendors with expenditures charged to the program over $10k which did not have documentation to support the level of procurement utilized. Questioned costs: None Context: This condition impacted six vendors selected for testing. Each of the vendors provided services that are in accordance with the grant project, however finding results from lack of documentation. Cause: The entity implemented an updated procurement policy during the year and did not consider vendors which had been procured in prior years. Effect: The Organization could potentially use federal funds in a manner which is not the most efficient or economical. Repeat Finding: Yes. Recommendation: We recommend the organization follow its newly established procurement policy related to the maintaining of necessary documentation to support the method of procurement utilized. The Organization may also consider qualifying multiple vendors for particular goods/service and then utilizing an approved vendors list. Views of responsible officials: There is no disagreement with the audit finding.

Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. EveryStep should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted EveryStep did not have adequate internal controls designed to ensure vendors were in compliance with federal regulations. Questioned costs: None Context: During our testing, it was noted that EveryStep did not have a formal procurement policy to ensure vendors are in compliance with federal regulations, including obtaining competitive bids, documenting justifications for sole-source purchases, and properly managing conflicts of interest. Cause: EveryStep was no formal policy documented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend EveryStep design controls to ensure a formal policy is in place. Views of responsible officials: There is no disagreement with the audit finding.

Federal Agency: Department of Health and Human Services Federal Program Name: Healthy Start Communities Assistance Listing Number: 93.926 Federal Award Identification Number and Year: H4900052 Award Period: 4/1/2023-6/30/24 Type of Finding: • Significant Deficiency in Internal Control over Compliance Criteria or specific requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement, suspension, and debarment. EveryStep should have internal controls designed to ensure compliance with those provisions. Condition: During our testing, we noted EveryStep did not have adequate internal controls designed to ensure vendors were in compliance with federal regulations. Questioned costs: None Context: During our testing, it was noted that EveryStep did not have a formal procurement policy to ensure vendors are in compliance with federal regulations, including obtaining competitive bids, documenting justifications for sole-source purchases, and properly managing conflicts of interest. Cause: EveryStep was no formal policy documented. Effect: The auditor noted no instances of noncompliance with the provisions of procurement, however, the lack of internal controls over these compliance requirements provides an opportunity for noncompliance. Repeat Finding: No. Recommendation: We recommend EveryStep design controls to ensure a formal policy is in place. Views of responsible officials: There is no disagreement with the audit finding.

U.S. Department of Health and Human Services Passed through Iowa Department of Public Health ALNs 93.994, 93.778, 93.575, 93.767 and 93.991 Finding: The Organization did not accurately report certain expenditures of federal awards under the correct assistant listing numbers (ALNs), and did not have sufficient internal controls over financial reporting to ensure the SEFA is properly presented. Criteria: The Organization must prepare a SEFA for the period covered by the Organization’s financial statements, which must include the total Federal awards expended in accordance with requirements in the Uniform Guidance. This requires presentation of a schedule of federal expenditures of federal awards, appropriately identifying required elements as defined in the Uniform Guidance. This includes reporting the awards under the appropriate assistance listing number (ALN). Condition and context: The accompanying schedule of expenditures of federal awards was restated to correct the expenditures previously reported for ALNs 93.994, 93.778, 93.575, 93.767 and 93.991. Effect: Improper reporting of federal expenditures could impact future funding from granting agencies. Cause: Management’s preparation and review of the SEFA did not timely identify that a contract addendum and related information from the pass-through entity was necessary to properly allocate expenditures of federal awards under certain contracts with Iowa Department of Public Health (IDPH), which has now been renamed the Department of Health and Human Services by passage of Senate File 514 by the General Assembly of the State of Iowa, among various ALNs. Questioned costs: None. Recommendation: We recommend that the Chief Financial Officer and Finance and Accounting Director perform a detailed review the SEFA, including a review of ALNs used and contract addendums received from or posted by the pass-through agencies.

U.S. Department of Health and Human Services Passed through Iowa Department of Public Health ALNs 93.994, 93.778, 93.575, 93.767 and 93.991 See finding 2022-002.