MARY'S CENTER FOR MATERNAL AND CHILD CARE INC.Non-Profit

Information on the federal program – Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services Criteria or specific requirement – Per 2 CFR §200.305, non-federal entities must minimize the time between the transfer of federal funds from the U.S. Treasury and the disbursement of those funds for program purposes. Advance payments must be limited to the minimum amounts needed and timed to be in accordance with the entity’s actual, immediate cash requirements. Condition – During our testing of cash management, we were unable to obtain supporting documentation for one of the draws selected for testing to verify that the time between the transfer and disbursement of funds was minimized. Further, we noted the Organization does not have a formal policy for federal cash drawdowns. Cause – The Organization did not have a formal policy or sufficient internal controls in place surrounding cash management and the draw process. Effect or potential effect – Drawing funds in advance of immediate cash needs could result in noncompliance with federal requirements. Questioned costs – None Context – Out of a population of 11 draws, a sample of 2 draws were selected for testing, and 1 draw was not supportable by underlying documentation. The sample was not statistically valid. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend the Organization implement formal policies and procedures to ensure that federal funds are drawn only to meet immediate cash needs (generally within a few days of disbursement). Views of responsible officials and planned corrective actions – Management has implemented enhanced cash management and grant monitoring procedures, including strengthened review of draw requests, improved documentation requirements, and closer reconciliation of grant expenditures to amounts drawn. In addition, the Organization is undertaking process improvements to streamline grant accounting and reporting activities, improve the timeliness of expense recognition, and enhance overall oversight of federal awards. Management expects these actions will strengthen compliance with federal cash management requirements and reduce the risk of future occurrences.

Information on the federal program _ Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services Criteria or specific requirement – Health centers must comply with federal reporting requirements. Condition – The Organization did not have data to support certain line items reported on the Uniform Data System (UDS) report filed. Within Table 5 of the UDS report, the amounts reported within line 8 column B, line 8, column B2, line 10A, column B, and line 10A, column B2, were not supportable by underlying data. Within Table 8A of the UDS report, the amounts reported within line 17 column C, line 1, column C, and line 3, column C, were not supportable by underlying data. Within Table 9E of the UDS report, the amounts reported within line 1G column A, and line 1Q, column A, were not supportable by underlying data. Cause – Internal controls were not in place to ensure proper supporting documentation was retained along with the submitted Uniform Data System report. Effect or potential effect – Inaccurate filing of reports may result in the federal program not being properly monitored, thus resulting in potential noncompliance with program requirements. Questioned costs – None Context –Only 1 special report was required to be submitted during the year under audit (UDS). Identification as a repeat finding, if applicable – Is a repeat finding (2023-005). Recommendation – We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Views of responsible officials and planned corrective actions – Management acknowledged several amendments were made to the UDS tables that support the calculation that was filed. A lack of document retention resulted in the final amended calculation not being saved in a central, shared site that would support the amount filed. In future periods, management will have processes and procedures in place to require reconciliation and tie-out of supporting documentation to final filings which will alleviate this finding.

Information on the federal program – Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services Criteria or specific requirement – Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. Condition – During our review of the Organization’s sliding fee calculations, we noted 3 patient accounts with incorrectly calculated sliding fee adjustments. Cause – The Organization did not have internal controls in place to ensure that the correct sliding fee adjustment was applied to patient accounts. Effect or potential effect – Patients received incorrect sliding fee adjustments resulting in an incorrect patient responsibility. Questioned costs – None Context – Out of a population of 43,633 patient accounts receiving sliding fee adjustments, a sample of 25 patient accounts were selected for testing, and 3 accounts had an incorrect sliding fee adjustment calculation. The sample was not statistically valid. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend the Organization establish an internal control procedure to ensure that sliding fee adjustments are correctly calculated and reviewed. Views of responsible officials and planned corrective actions – Management acknowledged the sliding fee adjustment errors resulted from manual adjustments made within the electronic health record system. Management will add an additional layer of review over manual adjustments. Further, the Organization will implement a process to periodically review sliding fee adjustments throughout the year for accuracy.

Information on the federal program _ Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services; Federal Award No. H8FCS41441 for project period April 1, 2021 through December 31, 2023. Criteria or specific requirement – Activities Allowed/Unallowed and Cost Principles; As stated in 2 CFR §200.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – The Organization was unable to provide supporting documentation (i.e., invoices, contracts, etc.) for 4 expenditures charged to the federal program. Cause – The Organization did not consistently follow the internal control policies and procedures that it has in place to ensure each expenditure is supported with corroborating documentation. Effect or potential effect – There is a risk of misappropriation or charging unallowable expenditures to the program, resulting in actual and/or potential questioned costs. Questioned costs – $25,326 Context – Out of a population of 483 direct costs, a sample of 25 expenditures were selected for testing, and 4 did not have supporting documentation. The sample was not statistically valid. Identification as a repeat finding, if applicable – Is a repeat finding (2022-006) Recommendation – we recommend an individual with knowledge of the federal program review expenditures charged to the federal program and ensure all transactions are supported by documentation evidencing the nature and business purpose of each expenditure. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Information on the federal program _ Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services Criteria or specific requirement – Health centers must comply with federal reporting requirements. Condition – The Organization did not accurately complete its Federal Financial Report, and the Organization did not have data to support certain line items reported on the Uniform Data System (UDS) report filed. The Federal Financial Report was submitted with incorrect data for lines 10j and 10n. Within Table 8A of the UDS report, the amounts reported within line 17 column C, line 1, column C, and line 3, column C, were not supportable by underlying data. Cause – There was a lack of detailed review of the Federal Financial Report by someone with knowledge of the reporting requirements, and internal controls were not in place to ensure proper supporting documentation was retained along with the submitted Uniform Data System report. Effect or potential effect – Inaccurate filing of reports may result in the federal program not being properly monitored, thus resulting in potential noncompliance with program requirements. Questioned costs – None Context – Out of a total of 2 financial reports required to be submitted during the year under audit, 1 financial report was tested. Only 1 special report was required to be submitted during the year under audit (UDS). Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend management implement an additional level of review by someone with knowledge of the reporting requirements. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Information on the federal program _ Assistance Listing Number 10.557, Special Supplemental Nutrition Program for Women, Infants, and Children, Department of Agriculture; Assistance Listing Number 93.676, Unaccompanied Alien Children Program, Department of Health and Human Services; Assistance Listing Number 93.870, Maternal, Infant and Early Childhood Home Visiting Grant Program, Department of Health and Human Services Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.414 Subpart F, Appendix IV, Section C.2.f, the provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the organization's fiscal year. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved. Condition – During our review of the Organization’s indirect cost rate calculation, we were unable to be provided with a true-up of actual indirect costs based on the final rates versus the provisional rates used by the Organization. Cause – The Organization did not have internal controls in place to ensure that the provisional rate utilized was in line with actual allowable costs incurred for the period involved. Effect or potential effect – Total indirect costs charged by the Organization may not be in line with the final rates determined by the oversight agency. Questioned costs – None Context – 3 out of 4 major programs tested did not have calculated indirect cost rates that agreed with their respective agreements. Identification as a repeat finding, if applicable – Is a repeat finding (2022-008) Recommendation – We recommend the Organization establish an internal control procedure to ensure that indirect costs charged to the federal program using the provisional rate are appropriately adjusted, if necessary, based on actual costs incurred. We recommend that on an annual basis, the Organization obtain an updated Nonprofit Rate Agreement from the federal government that shows final approved rates based on actual costs. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Information on the federal program _ Assistance Listing Number 93.224/93.527; Health Center Program Cluster; Department of Health and Human Services Criteria or specific requirement – Activities Allowed/Unallowed and Cost Principles; As stated in 2 CFR §200.303, the non-federal entity (i.e., the Organization) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition – The Organization was unable to provide evidence of approval for 8 expenditures charged to the federal program. Cause – The Organization did not consistently follow the internal control policies and procedures that it has in place to ensure each expenditure was properly approved. Effect or potential effect – There is a risk of misappropriation or charging unallowable expenditures to the program, resulting in actual and/or potential questioned costs. Questioned costs – None Context – Out of a population of 483 direct costs, a sample of 25 expenditures were selected for testing, and 8 did not have evidence of approval. The sample was not statistically valid. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – We recommend an individual with knowledge of the federal program review expenditures charged to the federal program and ensure all transactions are supported by documentation evidencing the nature and business purpose of each expenditure. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Information on the federal program – All federal programs Criteria or specific requirement – As stated in 2 CFR §200.303, the non-federal entity (i.e., the Center) must establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations and terms and conditions of the federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs or activities. Condition – During the 2022 audit, the predecessor auditor noted several cases in which the Organization did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/consultants. Effect or potential effect – The Organization is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Questioned costs – None Context – The Organization failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a repeat finding, if applicable – Is a repeat finding (2022-010) Recommendation – We recommend the Organization implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Information on the federal program – All federal programs Criteria or specific requirement – According to 2 CFR §200.303, the non-federal entity must: (a) Establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required 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. The non-federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition – During the 2022 audit, the predecessor auditor determined that the Organization did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. The matter has not been resolved in 2023. Cause – Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or potential effect – Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Organization's internal procurement policy. Questioned costs – None Context – The predecessor auditor noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, the predecessor auditor noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a repeat finding, if applicable – Is a repeat finding (2022-007) Recommendation – We recommend the Organization retain sufficient procurement documentation to meet the requirements noted in the Criteria section above. Views of responsible officials and planned corrective actions – See separate auditee document for planned corrective action.

Criteria: The Organizations are required under 2 CFR §200.302 to be able to have “identification, in its accounts, of all Federal awards received and expended and the Federal programs under which they were received”. It is also required to maintain “effective control over, and accountability for, all funds, property, and other assets”. These requirements are imperative to ensure that all Federal programs are properly reported on the Organizations’ Schedule of Expenditures of Federal Awards (SEFA). Condition: During our audit, we noted a few Federal programs that had expired in prior years were inadvertently included in the SEFA by error due to failure of reallocating expenditures to the proper Federal programs. Additionally, the Vaccines for Children program and a portion of the required Period 4 Provider Relief Fund receipts was not included in the original SEFA prepared by the Center. Cause: Due to significant turnover in the finance department and lack of accountability and monitoring of Federal funds, the Center did not properly report the Federal expenditures in the SEFA. This situation is due primarily to the fact that there is not a designated individual responsible and accountable for ensuring that all Federal sources of funds are properly identified and monitored in accordance with the laws and regulations, contracts, and grant agreements. Effect or Potential Effect: Without sufficient internal controls surrounding the preparation of the SEFA and an understanding of all programs that are Federally funded, the SEFA could be inaccurately reported. Questioned Costs: None. Context: The Center failed to properly track and allocate Federal expenditures in fiscal year 2022, which resulted in the SEFA not being properly prepared. Additionally, the Center did not have a person with the appropriate knowledge of the Vaccines for Children program or SEFA receipt reporting requirements of the Provider Relief Fund programs. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center develop standard operating procedures (SOPs) to document the current processes, procedures, and contingency plans to improve daily operations, efficiency, productivity, compliance, and risk management. Additionally, we recommend that the Center implement policies and procedures to ensure that expenses are allocated to the appropriate Federal grant award/program so the SEFA can be prepared to accurately reflect expenses incurred. We also recommend that the Center identify and monitor all Federal source of funds (including Federally sourced donated vaccines) and ensure they have oversight/monitoring and are being properly reported.

Federal Programs: 93.110 Criteria: Grantor requires that the Center submit programmatic reports in accordance with the schedules indicated in its grant agreements. Internal controls should provide for these reports to report the measurement of the recipient's performance to show achievement of program goals and objectives, share lessons learned, improve program outcomes, and foster adoption of promising practices (2 CFR §200.301(a)). Condition: During our audit, we were notified by management that certain programmatic reports were not submitted within the deadlines outlined in the grant agreements. We also noted the Center did not have evidence that certain programmatic reports were submitted in accordance with specific grant terms. Cause: The Center did not have the proper internal controls in place to ensure proper management of the Federal award(s) in compliance with the terms and conditions of the Federal award(s). Effect or Potential Effect: The performance progress according to the Federal award(s) may not be monitored, thus having potential unallowable costs or unallowable activities. Questioned Costs: None. Context: Several programmatic reports tested were not submitted on a timely basis. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center develop proper internal controls to ensure appropriate tracking of reporting deadlines for all Federal awards to ensure the preparation and timely submission of all reports required under its Federal awards' terms and conditions.

Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted one instance where a cash disbursement was not supported with corroborating documentation (i.e. invoices, valuation documentation, contracts, etc.). While we understand that this was a year of higher than normal volume of transactions for the Center, we also recognize the importance of management’s attention to maintaining support, policies and processes during the life cycle of an organization. Absent such documentation the Center expose themselves to a risk of misappropriation, misclassification and questioned costs by funders. Cause: The Center did not consistently follow the internal control policies and procedures that they have in place to ensure each expenditure is supported with corroborating documentation. Effect or Potential Effect: Failure to maintain proper documentation for cash disbursements, there is a risk of misappropriation, misclassification and questioned costs by funders. Questioned Costs: None. Context: 1 cash disbursement tested did not have proper supporting documentation. Identification as a Repeat Finding: 2021-003 Recommendation: In order to strengthen transparency with respect to all financial transactions, we recommend the Center strive to ensure transactions are appropriately supported with contemporaneous documentation justifying the nature and business purpose of each expenditure. We also recommend the Center develop a plan to establish a system that allows for documents to be accessed with ease, and be organized in such a manner that it allows for seamless retrieval of documentation by those responsible for maintaining those records.

Criteria: According to 2 CFR §200.303, the non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non- Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in Standards for Internal Control in the Federal Government issued by the Comptroller General of the United States or the internal Control Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Additionally, according to 2 CFR §200.318 Procurement standards, 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. Title 2, Subtitle A Chapter II Part 200 Subpart D 200.319 Procurement Standards. All procurement transactions for the acquisition of property or services required 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. The non-Federal entity must have written procedures for procurement transactions. These procedures must ensure that all solicitations: (1) Incorporate a clear and accurate description of the technical requirements for the material, product, or service to be procured. Such description must not, in competitive procurements, contain features which unduly restrict competition. The description may include a statement of the qualitative nature of the material, product or service to be procured and, when necessary, must set forth those minimum essential characteristics and standards to which it must conform if it is to satisfy its intended use. Noncompetitive procurements can only be awarded in accordance with §200.320(c). According to 2 CFR §200.320 Procurement Standards, there are specific circumstances in which noncompetitive procurement can be used. Noncompetitive procurement can only be awarded if one or more of the following circumstances apply: 1. The acquisition of property or services, the aggregate dollar amount of which does not exceed the micro-purchase threshold (see paragraph (a)(1) of this section); 2. The item is available only from a single source; 3. The public exigency or emergency for the requirement will not permit a delay resulting from publicizing a competitive solicitation; 4. The Federal awarding agency or pass-through entity expressly authorizes a noncompetitive procurement in response to a written request from the non-Federal entity; or 5. After solicitation of a number of sources, competition is determined inadequate. Condition: During our testing over procurement, we determined that the Center did not clearly document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, for noncompetitive procurements, there was no documentation to support which of the five criteria was met to allow for the noncompetitive procurement. Cause: Management did not have effective internal controls in place to ensure that procurement requirements were adequately documented and retained. Effect or Potential Effect: Procurement records were insufficient to meet the requirements noted in the Criteria section above, as well as the Center's internal procurement policy. Questioned Costs: None. Context: We noted that several items selected for testing did not document the rationale for the method of procurement, selection of contract type, contractor selection or rejection, and the basis for the contract price. In addition, we noted that several items selected for testing for noncompetitive procurements did not maintain documentation of which of the five criteria were met to allow for the noncompetitive procurement. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center retain sufficient procurement documentation to meet the requirements noted in the Criteria section above.

Federal Programs: 93.224, 93.870 Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.414 Subpart F, Appendix IV, Section C.2.f, the provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the organization's fiscal year. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved. Condition: During our review of the Center's indirect cost rate calculation, we were unable to be provided with a true-of actual indirect costs based on the final rates versus the provisional rate used by the Center. Cause: The Center did not have adequate controls in place to ensure that final rates provided were used to determine if any upward or downward adjustments were necessary. Effect or Potential Effect: Total indirect costs charged by the Center were not in line with the final rates as determined by the oversight agency. Questioned Costs: None. Context: 2 of 3 major programs tested did not have calculated indirect cost rates that agreed with their respective agreements. Identification as a Repeat Finding: 2021-004 Recommendation: We recommend the Center establish an internal control procedure to ensure that once a final rate has been determined, that procedures are applied to true-up the costs for the prior charges on grants and any upward or downward adjustments are properly recorded, reported, and applied to future reimbursement requests.

Federal Programs: All Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.512(a)(1) the audit must be completed and the data collection form described in paragraph (b) of this section and reporting package described in paragraph (c) of this section must be submitted within the earlier of 30 calendar days after receipt of the auditor's report(s), or nine months after the end of the audit period. If the due date falls on a Saturday, Sunday, or Federal holiday, the reporting package is due the next business day. Condition: The Data Collection Form for audits for each of the years ended December 31, 2021 and December 31, 2022 were not filed timely in accordance with the requirements under Uniform Guidance. Cause: The Center did not have adequate controls in place to provide for a timely audit process and allow the Data Collection Form to be filed timely. Effect or Potential Effect: Delinquent data collection forms may result in action by funders such as 1) draw-down restrictions, 2) reimbursable draw-down restrictions, 3) withholding a percentage of Federal funds, 4) suspending Federal funds, or 5) termination of the award. Questioned Costs: None. Context: The past two years of Data Collection Forms have not been filed timely. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center establish an internal control procedure to ensure that audits are completely more timely in the future, and within the timeframe as outlined by Uniform Guidance, to ensure the required data collection form, along with the reporting package is filed timely.

Criteria: As stated in 2 CFR §200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or in the “Internal Control Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). According to 2 CFR §200.214, the non-Federal entity is subject to the non-procurement debarment and suspension regulations implementing Executive Orders 12549 and 12689, 2 CFR part 180. The regulations in 2 CFR part 180 restrict awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: During our audit, we noted several cases in which the Center did not perform, or did not maintain proper support to demonstrate that it performed checks via SAM.gov to ensure that potential vendors, contractors, or consultants are suspended or debarred. The failure to screen such parties increases the possibility that U.S. Government funds may inadvertently be provided to individuals or organizations deemed to be excluded by the U.S. Government. Cause: Management did not have effective internal controls in place to ensure that suspension and debarment was being performed prior to entering into contracts with vendors or contractors/ consultants. Effect or Potential Effect: The Center is exposed to an increased risk that future noncompliance could occur by entering into transactions with vendors, contractors, or consultants that are suspended and debarred. Effect or Potential Effect (continued): If a non-Federal entity knowingly does business with an excluded person, the agency responsible for the Center's funding may disallow costs, annul or terminate the transaction, issue a stop work order, debar or suspend the non-Federal entity, or take other remedies as appropriate. Questioned Costs: None. Context: The Center failed to perform and/or properly document its due diligence with respect to these requirements. The issue is considered systemic in nature. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center implement internal controls to ensure that all vendors, contractors, and consultants are screened for suspension and debarment prior to entering into any executed contract. We further recommend that a policy be formalized and implemented that requires an annual screening of any current vendors, contractors, or consultants as well.

Finding 2021-003: Supporting Documentation Criteria: As stated in 2 CFR 200.303, the non-Federal entity (i.e. the Center) must establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations and terms and conditions of the Federal award. These internal controls should be in compliance with guidance in ?Standards for Internal Control in the Federal Government? issued by the Comptroller General of the United States or in the ?Internal Control Integrated Framework? issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Condition: During our audit, we noted several instances where cash disbursements were not supported with corroborating documentation (i.e. invoices, valuation documentation, contracts, etc.). While we understand that this was a year of higher than normal volume of transactions for the Center, we also recognize the importance of management?s attention to maintaining support, policies and processes during the life cycle of an organization. Absent such documentation the Center expose themselves to a risk of misappropriation, misclassification and questioned costs by funders. Cause: The Center did not consistently follow the internal control policies and procedures that they have in place to ensure each expenditure is supported with corroborating documentation. Effect or Potential Effect: Failure to maintain proper documentation for cash disbursements, there is a risk of misappropriation, misclassification and questioned costs by funders. Questioned Costs: Not determinable. Context: 2 of 40 cash disbursements tested did not proper supporting documentation. Identification as a Repeat Finding: Not applicable. Recommendation: In order to strengthen transparency with respect to all financial transactions, we recommend the Center strive to ensure transactions are appropriately supported with contemporaneous documentation justifying the nature and business purpose of each expenditure. We also recommend the Center develop a plan to establish a system that allows for documents to be accessed with ease, and be organized in such a manner that it allows for seamless retrieval of documentation by those responsible for maintaining those records.

Finding 2021-004: Indirect Cost Rate Calculation Federal Programs: 93.224, 93.926, 10.557 Criteria: According to 2 CFR 200.414 Subpart F, Appendix IV, Section C.2.f, the provisional and final rates must be negotiated where neither predetermined nor fixed rates are appropriate. Predetermined or fixed rates may replace provisional rates at any time prior to the close of the organization's fiscal year. If that event does not occur, a final rate will be established and upward or downward adjustments will be made based on the actual allowable costs incurred for the period involved. Condition: During our review of the Center's indirect cost rate calculation, we noted the indirect costs were not properly calculated and reconciled with the program income statements according to each grants' approved indirect cost rate. Cause: The Center did not perform a true-up of indirect rate costs based on the provisional rates approved by its oversight agency. Effect or Potential Effect: The Center did not bill the correct indirect costs to the Federal Government, thereby potentially overcharging the Federal Government, or undercharging based on the agreements. Questioned Costs: Not determinable. Context: 3 of 4 major programs tested did not have calculated indirect cost rates that agreed with their respective agreements. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend that going forward the Center calculate its indirect costs based on either the approved or provisional rates for the year under audit. While the auditor understands the provisional rate for the year ended December 31, 2021 was not obtained by the Center until December 21, true-ups for the indirect rates should still be performed for audit purpose and to ensure reimbursement by the Federal Government is appropriate for each respective grant. The Center should pay special attention to all terms and conditions within its current and any future agreements to ensure that indirect costs are calculated appropriately. Additionally, in the next fiscal year, the Center should adjust its procedures to account for the actual indirect costs and true up each grant.

Finding 2021-005: Reporting Federal Programs: 93.224 and 93.926 Criteria: Grantor requires that the Center submit a quarterly Federal Financial Report (FFR), SF- 425, in accordance with the quarterly schedule indicated in its grant agreement, within 30 days following the end of each calendar quarter. Condition: During our audit, we noted two (2) instances where a Federal financial report was not submitted within the deadlines outlined in the grant agreement. Cause: The Center did not have the proper internal controls in place around its grants management to ensure timely filing of its Federal financial reports as part of compliance with the Federal regulations. Effect or Potential Effect: Without proper management of the Center's Federal financial reporting requirements, the Center risks missing filing reports in their entirety, thus risking its Federal funding. Questioned Costs: None noted Context: 2 of 9 required reports (population includes both financial and program reports) tested were not submitted on a timely basis. Identification as a Repeat Finding: Not applicable. Recommendation: We recommend the Center look at the use of a tool to ensure appropriate tracking of the preparation and submission of all reporting requirements based on each Grant agreement.

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