Alameda Health System, A public Hospital Authority

Finding Number 2024-002: Timesheet versus Time Study Hours (Significant Deficiency in Internal Control over compliance – Allowable Costs/Cost Principles) FALN Number 93.778; Federal Agency/Pass-through Entity – Program Name Alameda Health Care Services Agency - Medical Assistance Program (Medi-Cal Administrative Activities); Award Number MAA MOU 2023-2024; Award Year 2023-2024 Criteria: 2024 Compliance Supplement and 2 CFR 200.303(a) stated that the non-federal entity must establish and maintain effective internal control over the federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and terms and conditions of the federal award. Condition/Context: As a result of our audit procedures, we noted 1 of 40 timesheets tested in which the hours on the employee’s timesheet did not agree to the hours reported on the time study as the time study was not prepared for an employee. Repeat Finding from Prior Year(s): Yes, Finding Number 2023-002 Cause and Effect: The Health System did not have proper controls in place to ensure hours reported on the timesheet agree to the hours on the time study and that a time study is properly prepared, which could lead to inaccurate hours being reported and disbursed to employees. Questioned Cost: None Recommendation: We recommend management review policies and procedures to ensure the hours reported on the timesheet agree to the hours on the time study, and to ensure a time study is properly prepared and retained. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System finalized the standard work procedures titled, Internal Controls for Proper Verification, which include procedures to ensure reported timesheet hours agree to hours on the time study and costs incurred are appropriately charged based on the contracts’ performance periods. Staff is implementing policy in fiscal year 2025."

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System finalized the standard work procedures titled, Internal Controls for Proper Verification, which include procedures to ensure reported timesheet hours agree to hours on the time study and costs incurred are appropriately charged based on the contracts’ performance periods. Staff is implementing policy in fiscal year 2025.

2023-002

Finding Number 2024-006: Charges Not Specified in Grant Contracts (Significant Deficiency in Internal Control over compliance and Instances of Noncompliance – Allowable Costs/Cost Principles) FALN Number 16.575; Federal Agency/Pass-through Entity – Program Name U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance; Award Number 94-3302014; Award Year 2023-2024 Criteria: 2024 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures, we noted 7 samples totaling $190 non-payroll expenditure for gift card purchases that were not outlined in the grant contract (RC22). Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure expenditures being charged to the program are specifically identified in the grant contract. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure expenditures charged to the program are in accordance with the grant contracts. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that expenditures being charged to the program are specifically identified in the grant contract.

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that expenditures being charged to the program are specifically identified in the grant contract.

Finding Number 2023-002: Timesheet vs. Time Study Hours (Significant Deficiency over Internal Control and Instance of Noncompliance – Allowable Costs/Cost Principles) FALN Number 93.778 Alameda Health Care Services Agency - Medical Assistance Program (Medi-Cal Administrative Activities), Award Number MAA MOU 2022-2023, Award Year 2022-2023 Criteria: 2023 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition/Context: As a result of our audit procedures, we noted 1 of 40 timesheets tested in which the hours on the employee’s timesheet did not agree to the hours reported on the time study. We identified 2.5 hours of steward leave being reported on the timesheet but not the time study. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure hours reported on the timesheet agree to the hours on the time study, which could lead to inaccurate hours being reported and disbursed to employees. Questioned Cost: None Recommendation: We recommend management review policies and procedures to ensure the hours reported on the timesheet agree to the hours on the time study. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

Finding Number 2023-006: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance – Period of Performance; Allowable Costs/Cost Principles) FALN Number 93.959 Block Grants for Prevention and Treatment of Substance Abuse, Award Number 900077, Award Year 2022-2023 Criteria: 2023 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition/Context: As a result of our audit procedures, we noted 2 of 25 timesheets tested in which the costs incurred were charged outside of the program’s performance period. The two timesheets had payroll costs incurred during the pay period of 6/12/2022 – 6/25/2022; however, the contract had a performance period of 7/1/2022 – 6/30/2023. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure only costs incurred in the performance period were charged to the program, which resulted in non-compliance with program requirements. Questioned Cost: None Recommendation: We recommend management review policies and procedures of the program to ensure the costs incurred are appropriately charged based on the contracts’ performance periods. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

Finding Number 2023-007: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance – Period of Performance; Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance, Award Number 94-3302014, Award Year 2022-2023 Criteria: 2023 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of payroll expenditure of $6,561 incurred during the pay period 3/19/2023 – 4/1/2023; however, the payroll costs incurred was charged to the program based on the pay date instead of the pay period incurred. Repeat Finding from Prior Year(s): Yes, Finding Number 2022-003 Cause and Effect: The Health System did not have proper controls in place to ensure only costs incurred in the period of performance were charged to the program, which resulted in costs outside of period of performance being charged to the program. Questioned Cost: None Recommendation: We recommend management review policies and procedures of the program to ensure the costs incurred are appropriately charged based on the contracts’ performance periods. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to ensure that costs incurred are appropriately charged based on the contracts’ performance periods.

2022-003

Finding Number 2023-008: Duplicate Charges (Significant Deficiency over Internal Control and Instances of Noncompliance – Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance, Award Number 94-3302014, Award Year 2022-2023 Criteria: 2023 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of a $2,444 non-payroll expenditure had been duplicated on invoices remitted to the grantor. Repeat Finding from Prior Year(s): Yes, Finding Number 2022-004 Cause and Effect: The Health System did not have proper controls in place to prevent duplicate transactions from being entered into the system and charged to the program, which resulted in duplicate costs being charged to the program. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to prevent duplicate transactions from being charged to the program. Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to prevent duplicate transactions from being charged to the program.

Views of Responsible Officials and Planned Corrective Action: Management agrees with the finding. The Health System will review, modify, and implement policies and procedures over the program to prevent duplicate transactions from being charged to the program.

2022-004

Finding Number 2022-001: Payrate Approval Letters (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program – Allowable costs/Cost Principles) FALN Number 93.498 Provider Relief Fund Criteria: 2022 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures, we noted management did not retain 15 of 20 COVID-related leave approval forms for payroll expenditures tested. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure retention of COVID-related leave forms to support payroll leave expensed, which could lead to unauthorized payroll leave expenses being charged to the program. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure that approval of leave forms are retained to support related expenditures. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that leave approval forms are retained and are prepared and reviewed by separate individuals with evidence of review documented.

Finding 2022-001: Payrate Approval Letters (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program – Allowable costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the Leave Management program to ensure management adheres to the current policies, procedures, and processes for retaining leave approval forms and that the forms are prepared and reviewed by separate individuals with evidence of review documented. Anticipated Completion Date: by March 31, 2024 Responsible Person: Ann Metzger, Vice President Finance

Finding Number 2022-002: Approval of Non-Payroll Expenditures (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program – Allowable costs/Cost Principles) FALN Number 93.498 Provider Relief Fund Criteria: 2022 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures, we noted 16 of 40 samples of nonpayroll expenditures tested that the Health System did not have internal controls in place to ensure expenditures charged to the program have documentation of management’s review/approval. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure all invoices are reviewed and approved by management prior to disbursements, which could lead to noncompliance with program requirements. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure all invoices are reviewed and approved prior to disbursements. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures for non-payroll expenditures to ensure management’s review/approval is documented.

Finding 2022-002: Approval of non-payroll expenditures (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs – Allowable costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures for non-payroll expenditures to ensure management’s review/approval is documented. Anticipated Completion Date: by March 31, 2024 Responsible Person: Ann Metzger, Vice President Finance

Finding Number 2022-003: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance – Period of Performance; Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance Criteria: 2022 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample where $788 of payroll expenditure incurred was charged to the program based on the pay date instead of the pay period incurred. Repeat Finding from Prior Year(s): Yes, Finding Number 2021-001 Cause and Effect: The Health System did not have proper controls in place to ensure only costs incurred in the period of performance were charged to the program, which resulted in costs outside of period of performance being charged to the program. Questioned Cost: None Recommendation: We recommend management review policies and procedures of the program to ensure the costs incurred are appropriately charged based on the contracts’ performance periods. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that the costs incurred are appropriately charged based on the contracts’ performance periods.

Finding 2022-003: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance – Period of Performance; Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that the costs incurred are appropriately charged based on the contracts’ performance periods. Anticipated Completion Date: by March 31, 2024 Responsible Person: Ann Metzger, Vice President Finance

2021-001

Finding Number 2022-004: Duplicate Charges (Significant Deficiency over Internal Control and Instances of Noncompliance – Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance Criteria: 2022 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of a $4,855 non-payroll expenditure had been duplicated on invoices remitted to the grantor. Repeat Finding from Prior Year(s): Yes, Finding Number 2021-002 Cause and Effect: The Health System did not have proper controls in place to prevent duplicate transactions from being entered into the system and charged to the program, which resulted in duplicate costs being charged to the program. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to prevent duplicate transactions from being charged to the program. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to prevent duplicate transactions from being charged to the program.

Finding 2022-004: Duplicate Charges (Significant Deficiency over Internal Control and Instances of Noncompliance – Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to prevent duplicate transactions from being charged to the program. Anticipated Completion Date: by March 31, 2024 Responsible Person: : Ann Metzger, Vice President Finance

2021-002

Finding Number 2022-005: Gift Card Tracking (Significant Deficiency over Internal Control and Instance of Noncompliance – Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance Criteria: 2022 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of a $5,008 gift card purchase with multiple gift cards was not tracked with an inventory system to allow for the expenditure to the grantor to be invoiced after gift cards are distributed. We also noted the Health System did not have policies and procedures related to gift card tracking. Repeat Finding from Prior Year(s): Yes, Finding Number 2021-003 Cause and Effect: The Health System did not have proper controls in place to ensure proper tracking of the gift cards, which could lead to noncompliance with program compliance requirements. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure proper tracking of gift card distributions for victims of crime. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to properly track the distribution of gift cards for victims of crime.

Finding 2022-005: Gift Card Tracking (Significant Deficiency over Internal Control and Instance of Noncompliance – Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to properly track the distribution of gift cards for victims of crime. Anticipated Completion Date: by March 31, 2024 Responsible Person: : Ann Metzger, Vice President Finance

2021-003

Finding Number 2022-006: Charges Not Specified in Grant Contracts (Significant Deficiency over Internal Control and Instances of Noncompliance – Allowable Costs/Cost Principles) FALN Number 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance Criteria: 2022 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of a $4,265 non-payroll expenditure for purchased service that was not outlined in the grant contract. Repeat Finding from Prior Year(s): Yes, Finding Number 2021-004 Cause and Effect: The Health System did not have proper controls in place to ensure expenditures being charged to the program are specifically identified in the grant contract. In addition, the Health System did not have proper controls in place to ensure all invoices are reviewed and approved by management prior to disbursements. The results could lead to noncompliance with compliance requirements of the program. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure expenditures charged to the program are in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implement policies, procedures, and processes to make sure that expenditures are charged to the program in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements.

Finding 2022-006: Charges Not Specified in Grant Contracts (Significant Deficiency over Internal Control and Instances of Noncompliance – Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implement policies, procedures, and processes to make sure that expenditures are charged to the program in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements. Anticipated Completion Date: by March 31, 2024 Responsible Person: : Ann Metzger, Vice President Finance

2021-004

Finding Number 2022-007: Costs Incurred & Paid Prior to Reimbursements (Significant Deficiency over Internal Control and Instance of Noncompliance – Cash Management; Period of Performance) FALN 16.575 U.S. Department of Justice, Office of Victims of Crime – Crime Victim Assistance Criteria: 2022 Compliance Supplement stated that program costs must be paid by non-federal entity funds before submitting a payment request (2 CFR section 200.305(b)(3)) (i.e., the non-federal entity must disburse funds for program purposes before requesting payment from the federal awarding agency or pass-through entity). In addition, a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award’s period of performance. Condition/Context: As a result of our audit procedures to evaluate the summary schedule of prior audit findings, we noted 1 sample of $2,500 nonpayroll expenditures that was submitted for reimbursement prior to the expenditure being incurred. In addition, the cost incurred was outside of the period of performance ended 9/30/2021. Repeat Finding from Prior Year(s): Yes, Finding Number 2021-005 Cause and Effect: The Health System did not have proper controls in place to ensure expenditures are incurred and paid for prior to reimbursements, and that expenditures are incurred within the period of performance of the contract, which resulted in noncompliance with the compliance requirements of the program. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure funds are disbursed for expenditures incurred prior to reimbursement requests, and that expenditures are incurred within the contract’s performance period. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that funds are disbursed for incurred expenditures prior to reimbursement requests.

Finding 2022-007: Costs Incurred & Paid Prior to Reimbursements (Significant Deficiency over Internal Control and Instance of Noncompliance – Cash Management; Period of Performance) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that funds are disbursed for incurred expenditures prior to reimbursement requests. Anticipated Completion Date: by March 31, 2024 Responsible Person: : Ann Metzger, Vice President Finance

2021-005

Finding Number 2021-001: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs ? Period of Performance; Allowable Costs/Cost Principles) Criteria: 2021 Compliance Supplement and 2 CFR 200.403(h) stated that a non-federal entity may charge only allowable costs incurred during the approved budget period of a federal award?s period of performance. Condition/Context: As a result of our audit procedures, we noted 4 of 40 timesheets and 1 of 40 invoices tested in which the costs incurred were charged outside of the program?s performance period. We noted 3 timecard samples from the Rape Crisis Program (RC19 35 1146) had personnel costs that were incurred outside its performance period of 10/1/2019 ? 9/30/2020. We noted 1 timecard sample from the Specialized Emergency Housing Program (KE19 02 1146) had personnel costs that were incurred outside its performance period of 10/1/2019 ? 9/30/2020. We also noted 1 employee expense claim that was incurred in June 2020 but was charged to the Domestic Violence Housing First Program (XD20 03 1146) with a period of performance of 1/1/2021 ? 12/31/2021. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure only costs incurred in the period of availability were charged to the program. Questioned Cost: None. Recommendation: We recommend management review policies and procedures of the program to ensure the costs incurred are appropriately charged based on the contracts? performance periods. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that the costs incurred are appropriately charged based on the contracts? performance periods.

Finding 2021-001: Costs Incurred Outside Period of Performance (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs ? Period of Performance; Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that the costs incurred are appropriately charged based on the contracts? performance periods. Anticipated Completion Date: by June 30, 2023 Responsible Person: NeKeshia Jones, Manager Grants and Special Projects

Finding Number 2021-002: Duplicate Charges (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs ? Allowable costs/Cost Principles) Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition: As a result of our audit procedures, we noted 2 of 40 invoices were duplicates of the original transaction, and they were all charged to the grant. Context: Based on the procedures performed, we identified 2 duplicated invoices totaling $718 each. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to prevent duplicate transactions from being entered into the system and charged to the program. Questioned Cost: None. Recommendation: We recommend management implement policies and procedures to prevent duplicate transactions from being charged to the program. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to prevent duplicate transactions from being charged to the program.

Finding 2021-002: Duplicate Charges (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs ? Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to prevent duplicate transactions from being charged to the program. Anticipated Completion Date: by June 30, 2023 Responsible Person: NeKeshia Jones, Manager Grants and Special Projects

Finding Number 2021-003: Gift Card Tracking (Significant Deficiency over Internal Control and Instance of Noncompliance over Major Federal Program - Allowable costs/Cost Principles) Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition: As a result of our audit procedures, we noted that the Health System did not have internal controls in place over the inventory of gift cards purchased and gift card distributions to the crime victims. Context: Gift cards are identified as allowable costs/activities under the contract entered into with the California Governor?s Office of Emergency Services (CalOES). The gift cards purchased by the Health System are to be distributed to the victims of crime determined eligible to receive the assistance. Based on the procedures performed, we noted that the Health System did not have policies and procedures in place to track the inventory of gift cards purchased and or other pertinent information such as when they were issued and the victims they were issued to. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure proper tracking of the gift cards. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure proper tracking of gift card distributions for victims of crime. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to properly track the distribution of gift cards for victims of crime.

Finding 2021-003: Gift Card Tracking (Significant Deficiency over Internal Control and Instance of Noncompliance over Major Federal Program - Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to properly track the distribution of gift cards for victims of crime. Anticipated Completion Date: by June 30, 2023 Responsible Person: NeKeshia Jones, Manager Grants and Special Projects

Finding Number 2021-004: Charges Not Specified in Grant Contracts (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs - Allowable costs/Cost Principles) Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition: As a result of our audit procedures, we noted 2 of 40 samples of nonpayroll expenditures tested that the Health System did not have internal controls in place to ensure expenditures charged to the program are in accordance with contract entered into with CalOES. Of the 2 samples noted, 1 did not have documentation of management?s review/approval. Context: Prior to the execution of the grant agreement with CalOES, specific types of expenditure are identified by the Health System during the application process which will be reviewed and approved by CalOES. Based on our audit procedures, we noted that gift cards are identified as allowable costs/activities under the contract (KE19 02 1146) entered into with CalOES; however, gift card costs incurred under contract XD20 03 1146 were not specifically identified in the contract. We also noted office decor costs incurred under contract XD20 03 1146 were not specifically identified in the contract. In addition, there was no evidence of management?s review over the office decor invoice. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure expenditures being charged to the program are specifically identified in the grant contract. In addition, the Health System did not have proper controls in place to ensure all invoices are reviewed and approved by management prior to disbursements. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure expenditures charged to the program are in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implement policies, procedures, and processes to make sure that expenditures are charged to the program in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements.

Finding 2021-004: Charges Not Specified in Grant Contracts (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program and Questioned Costs - Allowable Costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implement policies, procedures, and processes to make sure that expenditures are charged to the program in accordance with the grant contracts and that all invoices are reviewed and approved prior to disbursements. Anticipated Completion Date: by June 30, 2023 Responsible Person: NeKeshia Jones, Manager Grants and Special Projects

Finding Number 2021-007: Time Studies vs. Payroll Register (Significant Deficiency over Internal Control and Instances of Noncompliance over Major Federal Program - Allowable costs/Cost Principles) Criteria: 2021 Compliance Supplement and 2 CFR 200.303(a) stated that the non-Federal entity 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. Condition: As a result of our audit procedures, we noted 2 of 40 time-studies tested in which the payroll records did not agree. Context: Based on the procedures performed, we noted that 1 time-study had 12.5 hours of sick leave reported while the corresponding payroll register was showing 8.86 hours. We noted that the other time-study in question had 8 hours of holiday pay while the corresponding payroll register was showing 4 hours of holiday pay. Repeat Finding from Prior Year(s): No Cause and Effect: The Health System did not have proper controls in place to ensure the time-studies and payroll registers are in agreement. Questioned Cost: None Recommendation: We recommend management implement policies and procedures to ensure hours reported on time-studies agree to payroll registers. Views of Responsible Officials and Planned Corrective Action: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that time-studies and payroll registers agree, and prepared and reviewed by separate individuals with evidence of review documented.

Finding 2021-007: Time Studies vs. Payroll Register (Significant Deficiency over Internal Control and Instance of Noncompliance over Major Federal Program ? Allowable costs/Cost Principles) Response and Corrective Action Plan: Management agrees with finding. The Health System will review and modify policies and procedures over the program to ensure management implements policies, procedures, and processes to make sure that time studies and payroll registers agree, and prepared and reviewed by separate individuals with evidence of review documented. Anticipated Completion Date: by June 30, 2023 Responsible Person: Bichtram ?Nicole? Conghuyen, Manager Reimbursement

Finding Number 2019-001: Allowable Costs/Cost Principles (Significant Deficiency over Internal Control over Major Federal Program) Criteria: The California Department of Health Services requires time study forms to be completed in accordance with the CMAA/TCM Implementation Plan (Plan) approved May 3, 2013. California counties and their subrecipients that receive funding for Medi-Cal Administrative Activities and Targeted Case Management Programs are required to have participating employees complete a monthly Work Log Time Survey. Section 7, The Components of a Worker Log Time Survey Document, of the Plan states the following: Participants are required to complete, sign, and date the document on the last working day of the time survey period and give the document to their supervisor. Any deviation to the signature requirement must be accompanied by a documented justification. By signing the completed Worker Log Time Survey documents, the participant is certifying that they have read and understand requirements of the program in which they participate (CMAA and/or TCM), they understand their role in the program in which they participate (CMAA and/or TCM), and that all of the information contained in the Worker Log Time Survey is true, accurate, and correct. Condition: During our audit of allowable costs for the Medi-Cal Administrative Activities Grant (?MAA?), we selected 25 Work Log Time Survey forms for review for the fiscal year 2019 grant period, and noted the following: (1) In 2 of the 25 sampled, we noted that time study hours were less than the time reported in payroll records. It is the Health System?s policy to round up time to the nearest 15-minute increment, however, in these instances the time was rounded down, resulting in 1.25 hours of underreported time. (2) In 3 of the 25 sampled, we noted that time study hours were more than the time reported in payroll records. It is the Health System?s policy to round up time to the nearest 15-minute increment, however, in these instances the time was rounded up, resulting in 23.50 hours of overreported time. (3) The identified errors represent 2% of sampled allowable costs. Extrapolation of sampled errors was estimated at $48,980. Context: We noted employee?s time was under and over-rounded on the time study, which is used to track costs to be billed, as compared to their payroll time card. Cause and Effect: The Health System did not have proper controls in place to review time study forms for accuracy as well as quarterly County invoicing to ensure that the correct employee costs were being billed. Questioned Cost: Extrapolation of sample errors, related to the individual time survey documentation and cost pool documentation, was estimated at $48,980. Views of Responsible Officials and Planned Corrective Action: Management agrees to continue reviewing policies and procedures over the time study process including joint reviews of time study forms with program supervisors. Management will investigate improving the workflow through automation and complete actions by June 30, 2020. Recommendation: We recommend management continue reviewing policies and procedures over the time study forms and the quarterly invoicing to the County, including instituting a policy to have the program supervisor review the time study forms monthly and the County invoices quarterly. Furthermore, we recommend management consider ways to automate the process to improve efficiency and mitigate the risk of inaccurate reporting due to the manual process of data entry to capture necessary information.

Views of Responsible Officials and Planned Corrective Action: Management agrees to continue reviewing policies and procedures over the time study process including joint reviews of time study forms with program supervisors. Management will investigate improving the workflow through automation and complete actions by June 30, 2020.

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