WHITMAN-WALKER CLINIC, INC. DBA WHITMAN-WALKER HEALTHNon-Profit

2024-001 – Internal Controls over Compliance and Compliance with Procurement Standards Identification of the Federal Program - U.S. Department of the Treasury, Passed through Whitman-Walker Health System, Inc. 21.029 - COVID-19 – Coronavirus Capital Projects Fund Criteria – 2 CFR Section §200.318(i) states, “The non-Federal entity must maintain records sufficient to detail the history of procurement. These records will include, but are not necessarily limited to, the following: Rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price.” Per 2 CFR Section §200.319, “All procurement transactions for the acquisition of property or services under a Federal award must be conducted in a manner providing full and open competition consistent with the standards of this section and §200.320.” 2 CFR Section §200.324 stipulates that a non-Federal entity must perform a cost or price analysis for each procurement in excess of a minimum threshold. Additionally, 2 CFR Section §200.320(c) states in part, “There are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of [the defined] circumstances apply”. Condition – We noted there was insufficient documentation retained to support adherence to the required procurement policy and standards. Documentation was unable to be provided to support that cost or price analyses were performed and were conducted providing full and open competition. Additionally, for one procurement deemed noncompetitive by WWH, none of the circumstances allowing noncompetitive procurement were met. Cause – WWH did not maintain all required aspects of formal documentation as required by the applicable 2 CFR standards, was unable to provide evidence of full and open competition, and in one instance improperly elected noncompetitive procurement. Effect – We were unable to determine whether the value of procurements for goods or services that exceeded the micro-purchase threshold followed a proper formal procurement method in accordance with 2 CFR Sections §200.319, 320, and 324. Questioned costs – Not determinable Context – We selected a sample of 7 procurements by non-statistical methods, out of a population of 8 procurements. All procurements related to eligible pre-award costs. WWH was unable to provide sufficient formal procurement documentation to support full and open competition and performance of cost or price analysis for 4 out of 7 selected procurements. One of those samples was deemed noncompetitive by WWH but did not meet the circumstances allowing noncompetitive procurement. Repeat finding – This is not a repeat finding. Recommendation – We recommend WWH designate a responsible and qualified individual within the organization to oversee the procurement policy and ensure compliance. Additionally, we recommend WWH explore alternative organizational and tracking methods to ensure all procurements are properly tracked for workflow purposes and adequately maintained for retention. View of Responsible Officials - WWH has internal controls for the procurement process for federal funds and did not follow those practices as clearly with these investments. The utilization of team members with multiple responsibilities, without stronger controls, led to document retention challenges.

2023-001 – Preparation of the Schedule of Expenditures of Federal Awards Identification of the Federal Program – 93.224/93.527 Health Center Program Cluster Criteria – CFR Section §200.510(b) states in part: “The auditee must also prepare a schedule of expenditures of Federal awards (Schedule) for the period covered by the auditee's financial statements which must include the total Federal awards expended as determined in accordance with §200.502”. CFR Section §200.502(a) also states that, “The determination of when a Federal award is expended must be based on when the activity related to the Federal award occurs”. Condition – We noted that there were significant adjustments needed to present a complete and accurate Schedule. Cause – WWH’s internal controls over preparation and review of the Schedule were not properly implemented for the year ended December 31, 2023. Such internal controls were designed to require timely review of the accuracy of the Schedule by appropriate personnel. Effect – The Schedule for the year ended December 31, 2023 inappropriately included $250,500 of expenditures related to previous years. Questioned costs – none Context – Internal controls or processes in place were not implemented as intended to ensure an accurate Schedule was prepared. Repeat finding – No Recommendation – We recommend the Schedule to be reviewed timely and with sufficient precision by the appropriate level of personnel. View of Responsible Officials - Management agrees with the Federal Award Finding regarding the determination of when a Federal award is expended. As part of the Corrective Action Plan, Grants management staff from Finance and Program departments are meeting regularly to ensure that the expenditures are recorded in the appropriate year.

2022-002 ? Timely Reporting and Internal Controls over Reporting Identification of the Federal Program - 93.918 Grants to Provide Outpatient Early Intervention Services with Respect to HIV Disease Criteria ? Recipients of federal awards much establish and maintain effective internal controls over reporting and submit the Federal Finance Report (FFR) within 5 months after the budget period end date. Condition ? The FFR for the budget period end of August 31, 2022 was due by January 30, 2023 as required by the grant agreement. However, the FFR was submitted February 28, 2023. Cause ? WWH did not sufficiently track reporting deadlines or maintain sufficient internal controls over reporting during turnover of key grant personnel. Effect ? An FFR submitted to the granting agency was 30 days late. Questioned costs ? none Context ? Key grant personnel departed WWH during 2022 and 2023 which caused for tracking of grant reporting deadlines to be insufficiently monitored for a period of time. One FFR was selected for testing, and it was concluded it was not submitted within the reporting requirement. Repeat finding ? No Recommendation ? We recommend WWH implement compensating policies and procedures over internal controls of reporting required by the granting agencies on when there is turnover in key personnel. View of Responsible Officials - Management agrees with the financial statement finding identified in the audit and that the finding was a result of turnover of key grant personnel.

2021-002 ? Activities Allowed or Unallowed - Review and Approval of Timecards Information on Federal Programs ? U.S. Department of Health and Human Services Health Assistance Listing 93.011 - National Organizations of State and Local Officials Criteria ? The Code of Federal Regulations Sections 200.430 states that charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must: (i) be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated; (ii) be incorporated into the official records of the non-Federal entity. Condition ? During our testing of payroll disbursements, we noted the following exception: ? For one of the eighteen expenditures sampled, a timecard was not approved by a supervisor to support time charged by an employee to the program. Cause ? Policies did not operate as designed to approve timecards in situations when an assigned reviewer is out-of-office. Timecards should be approved after the salary cost is incurred and prior to charging the costs to a federal program. Effect - Charges and wages incurred may not have been properly reviewed and approved to ensure the time charged is accurate and based on actual work performed. Questioned Costs ? None Context ? We tested a sample of eighteen items and found one exception as noted in the condition. This is a condition identified per review of WWH?s compliance with specified requirements using a statistically valid sample. We were able to obtain documentation evidencing that the employee existed, was paid, and coded their hours to the major program, but we could not validate the accuracy and approval of the hours charged to the major program through WWH?s designed system of internal controls. Recommendation - We recommend policies and procedures to be designed and implemented to obtain approval of timecards by a supervisor, or assigned substitute reviewer, prior to charging salary costs to federal awards. Views of Responsible Officials ? Management concurs with the recommendation of the audit firm.

Section III Federal Award Findings and Questioned Costs 2020-001 - Activities Allowed or Unallowed; Allowable Costs/Cost Principles Information on Federal Programs ? U.S. Department of Health and Human Services Health Health Center Program Cluster CFDA 93.224 FAIN: H80CS26632 and H80CS26633 Criteria ? The Code of Federal Regulations Sections 200.334 and 200.403(g) state that for costs to be allowable under Federal awards, they must be adequately documented and retained. Condition ? During our testing of payroll disbursements, we noted the following exceptions: ? For one of the 40 expenditures sampled, a timecard could not be provided to support the time charged by an employee to the major program. Cause ? Policies did not operate as designed to retain supporting documentation of prior payroll service providers for the first pay period of the year under audit to evidence that costs were accurate and that an appropriate level of review and approval was completed prior to charging costs to a federal program. Effect or Potential Effect - We were unable to confirm the accuracy and approval of payroll expenses from the first pay period (January 1, 2020 to January 15, 2020) claimed as federal expenditures. Questioned Costs ? N/A Context ? We tested a sample of 40 items and found one exception as noted in the condition. This is a condition identified per review of Whitman-Walker Health?s compliance with specified requirements using a statistically valid sample. We were able to obtain documentation evidencing that the employee existed and was paid, but we could not validate the accuracy and approval of the hours charged to the major program. Documentation was not available to validate the accuracy and approval of the hours charged to the major program for any payroll expenses during the first pay period of the year under audit due to a change in payroll service providers. Due to the transition from the previous payroll service provider, timecards were unable to be retained. From summarizing all payroll expenses in the first pay period in the year under audit and related fringe and indirect costs calculated from the cost pool, we determined that we could not verify the accuracy of $44,423 costs charged to the major program. Repeat Finding - This is a new finding. Recommendation - We recommend the policies developed are enforced to ensure WWH maintains access to all necessary documentation to support costs claimed as federal expenditures throughout the entire audit period, including those from systems that are no longer in use. Views of Responsible Officials ? Management concurs with the recommendation of the audit firm. The existing document retention policy will be enhanced to provide procedures relating to vendor/software transition and related access to documentation held in proprietary systems with third parties.

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