First Nations Community Health Source IncNon-Profit

2024-003 LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE (REPEATED & MODIFIED) Title: All included on the Schedule of Expenditures of Federal Awards Agency: All included on the Schedule of Expenditures of Federal Awards Pass Through: All included on the Schedule of Expenditures of Federal Awards Assistance Listings Number: All included on the Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency, Other Non-compliance Compliance Area: Reporting Federal Award Year: 2024 Questioned Costs: None Condition The Organization did not submit their Single Audit reporting package (financial statements, data collection form, and corrective action plan) within the required time period. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package 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. Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512. Effect Late reporting could cause additional oversight or restriction by certain grantors

2023-005- LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE Federal Agency: All included on the Schedule of Expenditures of Federal Awards Federal Program Title and Assistance Listing Number: All included on the Schedule of Expenditures of Federal Awards Type of Finding: Significant Deficiency, Other Non-compliance Compliance Area: Reporting Questioned Costs: None Condition The Organization did not submit their Single Audit reporting package (financial statements, datacollection form, and corrective action plan) within the required time period. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package 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. Effect Late reporting could cause additional oversight or restriction by grantors. Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did notcomply with the submission requirements of 2 CFR 200.512.

2022-008 LATE FILING OF THE SINGLE AUDIT REPORTING PACKAGE WITH THE FEDERAL AUDIT CLEARINGHOUSE Federal Agency: All included on the Schedule of Expenditures of Federal Awards Federal Program Title & Assistance Listing Number: All included on the Schedule of Expenditures of Federal Awards Award Period: Various Award Periods Type of Finding: Significant Deficiency and Other Non-compliance Compliance Area: Reporting Questioned Costs: None Condition The Organization did not submit their Single Audit reporting package (financial statements, data collection form, and corrective action plan) within the required time period. Criteria 2 CFR 200.512 stipulates the requirement that the Single Audit reporting package 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. Effect Late reporting could cause additional oversight or restriction by certain grantors. Cause Due to turnover, internal controls were not properly designed, executed, and monitored to ensure a timely preparation of reports and records for audit purposes. As a result, management did not comply with the submission requirements of 2 CFR 200.512.

2021-007—Allowable Costs/Cost Principles Federal program information: Funding agency: U.S. Department of Health and Human Services Title: COVID-19 Urban Indian Health Services ALN: 93.193 Award number: 75H70720C00006 Award period: March 27, 2020 – September 30, 2021 Criteria: According to 2 CFR Part 225, to be allowable under federal awards, costs must be adequately documented, be necessary and reasonable for the performance of the federal award and be allocable thereto under the principles in 2 CFR Part 200, Subpart E. According to the grant agreement for this award, this funding is to prevent, prepare for, and respond to COVID- 19, including COVID-19 related public health support, telehealth, other information technology upgrades, and other activities to protect the safety of patients and staff. Additionally, non-Federal entities receiving federal awards should establish and maintain internal control designed to reasonably ensure compliance with Federal laws, regulations and program compliance requirements. Condition: Three of 28 nonpayroll transactions tested were for utility costs, which are not an allowable cost of this federal award. For two additional nonpayroll transactions, we noted that the transactions were not approved by the Program Manager, Grants Manager, CFO, or CEO as required under the Finance policies and procedures. Questioned Costs: Utility expenses totaling $731. Context: Three of 28 nonpayroll disbursements tested represented utility costs, and two of 28 nonpayroll disbursements tested were not approved. Cause: FNCH is not following its approved Finance policies and procedures related to purchasing and accounts payable. Effect: FNCH may not be able to demonstrate that the costs charged to federal programs are allowable. Auditor’s Recommendations: FNCH should implement its approved Finance policies and procedures to ensure that amounts charged to federal programs are allowable and properly approved. Management’s Response: FNCH management agrees with the auditor’s recommendations. The Finance Department faced significant staffing challenges due to the COVID-19 pandemic. These challenges resulted in an 80% staff turnover, including the CFO. Additionally, the pandemic made it difficult for the Finance Department to hire new staff in a timely manner. The COVID- 19 outbreak also impacted attendance, resulting in employees being absent from work for one to two weeks. To address this issue, FNCH will initiate the following corrective actions. The CFO will implement internal measures, including creating a schedule of activities with due dates, progress reports, and staff meetings, to monitor and ensure that the amounts charged to federal programs are allowable and properly approved. Corrective action steps will be identified and implemented as needed. The grant/contract staff will review the grant budgets, including line-item allocations, to determine allowable expenses. The CFO will verify the monthly expenses are allowable and approve the drawdown budgets of the grants accordingly.

2021-008—Reporting Federal program information: Funding agency: U.S. Department of Health and Human Services Title: Urban Indian Health Services; COVID-19 Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 ALN: 93.193; 93.665 Award number: 75H70720C00006; H722IHS0133; H79FG000227; H79FG000667 Award period: Various Criteria: Quarterly Federal Financial Reports (SF-425) are required to be submitted to the granting agency according to the Notice of Awards for these programs. Condition: Three of four quarterly SF-425 reports were submitted past the 30-day deadline after the end of each quarter. Questioned Costs: N/A Context: Three of four quarterly SF-425 reports for the Urban Indian Health Services grant awards and three of four quarterly SF-425 reports for the Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 grant awards. Cause: Program personnel did not review and approve the reports for submission in a timely manner. Effect: FNCH is not in compliance with reporting requirements for these programs. Auditor’s Recommendations: FNCH should develop internal controls to ensure all program reports are properly completed and submitted by the required due dates. Management’s Response: FNCH management agrees with the auditor’s recommendations. The Finance Department faced significant staffing challenges due to the COVID-19 pandemic. These challenges resulted in an 80% staff turnover, including the CFO. Additionally, the pandemic made it difficult for the Finance Department to hire new staff in a timely manner. The COVID- 19 outbreak also impacted attendance, resulting in employees being absent from work for one to two weeks. As a result, the Finance Department could not submit the quarterly SF-425 reports due to the lack of staff. The CFO will implement internal measures, including creating a schedule of activities with due dates, progress reports, and staff meetings, to monitor and ensure the financial close and reporting process has been completed within the required timeframes and are accurate. Corrective action steps will be identified and implemented as needed. The grant/contract staff will maintain a log of when financial and other grant reports are due. The CFO will review the log and track report submissions to ensure timely completion and submission. To ensure timely completion, the staff will initiate activities to complete required reports and financial close at least 60 days before the deadline. The CFO will be responsible for ensuring the reporting deadlines have been met.