Regional Center for Border Health, Inc.

Criteria: RCBH must follow the period of performance requirements contained in 2 CFR 200.309 which require non-federal entities to charge to federal awards only allowable costs incurred during the period of performance. Proper controls should be in place to ensure expenditures are allowable and reported in the appropriate accounting and grant period. Condition: Rental expenditures of $114,000 were originally charged to the grant for a 6 month period proceeding the start of the grant's period of performance, Subsequent to the audit, RCBH reclassified those expenditures and a deferred revenue was recorded for the $114,000 instead. Cause: The expenditure was for an allowable cost, however, it was incurred prior to the grant's period of performance. It appears RCBH does have proper controls in place to help ensure expenditures are allowable and reported in the appropriate accounting and grant period. This one instance, however, appears to be due to a misunderstanding of the new federal award program and its start date. Effect: RCBH was not in compliance with the grant's period of performance which could result in the loss of federal funds. Recommendation: RCBH should continue to evaluate and implement procedures and controls to ensure that only allowable costs incurred during the period of performance are charged to the federal award.