LINCOLN COUNTY HEALTH DEPARTMENTLocal Government

2025-001 U.S. Department of Health and Human Services, AL No. 10.557 Eligibility MATERIAL WEAKNESS AND NONCOMPLIANCE Condition: Lack of adequate supporting documentation. No supporting income, residential and other eligibility documentation was maintained by the Health Department after certifying the individual and entering the data directly in the State’s reporting website. As a result, we were unable to perform testing procedures over eligibility compliance requirements. Criteria: LCHD is required to maintain adequate documentation to provide evidence of their compliance with requirements applicable to each program funded under the Uniform Guidance. Cause: LCHD lacked adequate procedures over the maintenance of documentation to verify program participants met all eligibility requirements; Categorical, Identity & Residence, Income, and Nutritional Risk. This was a result of miscommunication in identifying the documentation that should be kept and maintained during a participant’s Certification and length of time records should be maintained after entering the information in the State’s reporting website. Effect: Services may have been provided to ineligible participants. Recommendation: Management should continue to evaluate procedures for capturing, reporting, and maintaining personnel, expense, and participant eligibility documentation, related to their various federal award programs. In order to ensure services are only provided to eligible individuals. Procedures should include additional oversight and monitoring over original source data. Grantee’s Response: Management concurs and will implement additional procedures, oversight, and monitoring over required eligibility documentation.

2025-002 U.S. Department of Health and Human Services, AL No 93.323 Reporting MATERIAL WEAKNESS & NONCOMPLIANCE Condition: Controls in place did not ensure quarterly reports were submitted timely. During our testing, three of the three quarterly reports, over the nine month reporting period were not submitted by the 15th of the required reporting month. Reports were submitted between three and sixty-three days after the deadline. Criteria: Grant specifications require quarterly reporting due January 15th, April 15th, July 15th, and October 15th for the previous 3-month reporting period. Cause: LCHD lacked adequate procedures over the timely reporting of program related expenses, to ensure reports are prepared and submitted by the required reporting deadlines. Effect: Failure to file timely reports is a breach of the award terms and conditions. It prevents the federal awarding agency from performing effective oversight and could result in the suspension of future funding or a high-risk designation. Recommendation: Management should continue to evaluate procedures for capturing, and reporting of their various federal award programs. Procedures should include a secondary reviewer to verify the accuracy and timeliness of all submissions. Management should consider implementing a formalized grant reporting calendar that includes automated alerts for upcoming deadlines. Grantee’s Response: Management concurs and will continue to evaluate procedures for capturing and reporting grant activity, including implementing additional oversight and monitoring.

2025-003 U.S. Department of Health and Human Services, AL No 93.323 Special Tests – Prevailing Wages MATERIAL WEAKNESS Condition: Controls in place did not ensure certified payrolls were being received from the contractor and reviewed by a designated individual overseeing the renovation project at the Health Department, to ensure compliance with prevailing wage requirements. Criteria: The Davis Bacon Act (40 U.S.C. 3141-3144) requires all contractor and subcontractors on federal funded construction projects over $2,000 to pay laborers and mechanics prevailing wages. In addition to including prevailing wage rate clauses in construction contracts, the Health Department is required to monitor contractors by receiving and reviewing weekly certified payrolls to ensure laborers are paid no less than the prevailing wage. Cause: The Health Department lacked a formalized internal control process for tracking the specific requirements related to federally funded construction projects. In addition to fiscal and program staff primarily managing clinical grants and not being sufficiently trained on the specific labor compliance monitoring required for federal construction and renovation projects. Effect: The lack of monitoring could result in contractors underpaying employees or misclassifying labor roles, leading to grant funding suspension or debarment of contractor. Recommendation: Management should implement additional procedures to ensure all required grant requirements are identified and monitored to ensure requirements are met. Grantee’s Response: Management concurs and will continue to evaluate procedures for capturing, reporting and identifying grant activity, including implementing additional oversight and monitoring.

Condition: Lack of adequate supporting documentation. No supporting income, residential and other eligibility documentation was maintained by the Health Department after certifying the individual and entering the data directly in the State’s reporting website. As a result, we were unable to perform testing procedures over eligibility compliance requirements. Criteria: LCHD is required to maintain adequate documentation to provide evidence of their compliance with requirements applicable to each program funded under the Uniform Guidance. Cause: LCHD lacked adequate procedures over the maintenance of documentation to verify program participants met all eligibility requirements; Categorical, Identity & Residence, Income, and Nutritional Risk. This was a result of miscommunication in identifying the documentation that should be kept and maintained during a participant’s Certification and length of time records should be maintained after entering the information in the State’s reporting website. Effect: Services may have been provided to ineligible participants. Recommendation: Management should continue to evaluate procedures for capturing, reporting, and maintaining personnel, expense, and participant eligibility documentation, related to their various federal award programs. In order to ensure services are only provided to eligible individuals. Procedures should include additional oversight and monitoring over original source data. Grantee’s Response: Management concurs and will implement additional procedures, oversight, and monitoring over required eligibility documentation.

Condition: Controls in place did not ensure maintenance of contractor invoices to support expenses reported for reimbursement on the monthly grant request. During our testing, two of the twelve monthly files tested did not contain contractor invoices that agreed to the amounts submitted to the grantor for reimbursement. These differences are eliminated by the end of the audit period, as total reimbursements received for contractor fees, did not exceed what was actually incurred and paid to contractor over the same audit period. However, the documentation provided was not adequate and did not support the amounts reported and requested on the monthly request for reimbursement. Criteria: Effective controls over grants ensure allowable grant expenses are accurately captured and documented to support reimbursement requests and other reporting requirements. Internal worksheets and other documents prepared for reimbursement and other reporting should be reviewed for accuracy, prior to preparation and submission of the monthly reimbursement request. Cause: LCHD lacked adequate procedures over the accuracy, and reporting of program related expenses. This was a result of errors in maintaining the correct supporting documentation for actual contractor fees invoiced and requested for reimbursement during the monthly reporting period. Effect: The testing identified two monthly program reimbursement requests for contractor invoices, not in agreement invoices provided. The annual net effect was $-0-. If unallowable, costs could be required to be repaid to the grantor. Additional requirements may need to be fulfilled if grant funds were received prior to actual disbursement for the expense. Recommendation: Management should continue to evaluate procedures for capturing, reporting, and maintaining support for reimbursements related to their various federal award programs. Adequate supporting documentation should clearly identify the reported expenses being reimbursed by the grantor, in order to ensure accurate information is reported. Procedures should include additional oversight and monitoring over original source data, financial statement reporting and monthly reporting to the grantor. Grantee’s Response: Management concurs and will continue to evaluate procedures for capturing, reporting, and maintaining personnel, expense, and participant eligibility documentation, related to the various federal award programs, in order to ensure services are only provided to eligible individuals. Procedures should include additional oversight and monitoring over original source data, financial statement reporting and monthly reporting to the grantor.

2022-003 U.S. Department of Health and Human Services, AL No 93.268 Allowable Costs/Cost Principles; Reporting SIGNIFICANT DEFICIENCY IN INTERNAL CONTROL Condition: Controls in place did not provide for the accuracy of the calculated personnel expenses used in program reporting. During our testing, we identified 6 employee pay periods, of the 60 tested with personnel costs incorrectly calculated and reported for the program. As a result amounts reported and requested for reimbursement were not accurate. Criteria: Effective controls over grants insures allowable grant expenses are accurately captured and documented to support reimbursement requests and other reporting requirements. Internal worksheets and other documents prepared for reimbursement and other reporting should be reviewed for accuracy, prior to preparation and submission of the monthly reimbursement request. Cause: LCHD lacked adequate procedures over the accuracy and reporting of COVID-19 program related personnel expenses. This was a result of the immediate emergency response required due to COVID-19 and community needs, putting greater demand and limitations on staff resources. Effect: The testing identified 6 inaccurate pay calculations, resulting in a net $13.17 overbilled to the program in the testing sample. Unallowable costs could be required to be repaid to the grantor. Recommendation: Management should continue to evaluate procedures for capturing, reporting, and maintaining personnel and other expenses related to their various federal award programs. In order to insure accurate information is requested and reported. Procedures should include additional oversight and monitoring over original source data and monthly reporting. Grantee?s Response: Management concurs. During the period under audit management implemented changes to the capturing and reporting of the program personnel costs for the COVID-19 related programs. Changes included; separate time codes to identify the separate COVID-19 personnel costs; and improvements to personnel reports used to calculate and report program personnel costs. No errors were identified in this program after the changes were implemented. LCHD will continue to evaluate their controls with respect to current federal awards and requirements to insure accurate information captured and reported.