Mental Health Center of Boulder County dba Mental Health Partners

Federal Agency: Department of the Treasury Federal Program Name: Coronavirus State and Local Fiscal Recovery Funds 21.027 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services Behavioral Health Administration Pass-Through Number(s): 24 IBEH 186887 Award Period: 7/1/2023 – 12/30/2024 Type of Finding: Significant Deficiency in Internal Control over Compliance and Other Matters

Criteria or Specific Requirement: 2 CFR Part 200 Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Award requires compliance with the provisions of procurement and suspension and debarment. The Center should have internal controls designed to ensure compliance with these provisions.

Condition: During our testing over suspension and debarment, we noted one instance in which the Organization did not perform the suspension and debarment check prior to entering into a transaction with a vendor.

Questioned Costs: None

Context: During our testing over suspension and debarment, we noted one instance in which the Center did not perform the suspension and debarment check prior to entering into a transaction with a vendor.

Cause: The purchase was made outside of the normal accounts payable process which resulted in the vendor not being recorded in the vendor listing in NetSuite which is run through the debarment check system.

Effect: Noncompliance with federal regulations.

Repeat Finding: No

Recommendation: We recommend the Center implement a process to ensure suspension and debarment checks are performed and documentation to show that the checks are occurring prior to entering into transactions with vendors.

Views of responsible officials: The vendor in question was reviewed and vetted by USI, our insurance broker, before being recommended to the Center. The Center began using them as a vendor after USI’s recommendation and they were set up to be paid via an ACH debit so the vendor was not included in our existing accounts payable vendor debarment check. The Center has updated the debarment verification policy to include all payment types to all vendors. Additionally, a debarment check has now been performed on this vendor and they are not debarred and are eligible to receive federal funds.

Federal Agency: Department of the Treasury and Department of Health and Human Services Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds and Block Grants for Prevention and Treatment of Substance Abuse Assistance Listing Number: • 21.027 and 93.959 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding:

• Significant Deficiency in Internal Control over Compliance and Other Matters

Criteria or specific requirement: According to § 2 CFR 200.303, Internal Controls, 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 the terms and conditions of the Federal award. According to 2 CFR 200.1, Period of Performance is defined as the total estimated time interval between the start of an initial Federal award and the planned end date, which may include one or more funded portions, or budget periods.

Condition:

93.959: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $23,543.

21.027: The Organization began allocating direct salaries, fringe and indirect expenditures prior to the awards period of performance. The Organization allocated expenditures based on the paid date, rather than the incurred period. Total direct salaries and fringe expenditures allocated to the grant prior to the period of performance was $1,699. Questioned costs: $25,242.

Context: We noted the Organization is not in compliance with requirements related to the period of performance. Cause: The Organization allocated expenditures based on the paid date, rather than the incurred period.

Effect: Noncompliance with federal regulations.

Repeat Finding: Yes: 2022-002

Recommendation: We recommend the Organization update their method of allocating expenditures to federal awards based on the incurred date, rather than paid date.

Views of responsible officials: Management concurs with the audit finding. The previous process for grant salary, fringe, and indirect billings was based on salary paid date and therefore on a cash basis rather than accrual. The policy and process were immediately updated when the issue was identified during the fiscal year 2022 audit to bill based on period incurred rather than paid date, but the issue was identified after the invoices in question were sent. Revised invoices were not sent as total costs incurred during the period of the award, excluding the amounts noted in the finding, were still well over and above the award amount. All questioned costs were allowable but were outside the grant period and there are other eligible expenses during the period of performance which could have been billed to fully draw down on the award.

Federal Agency: U.S. Department of the Treasury Federal Program Name: • Coronavirus State and Local Fiscal Recovery Funds Assistance Listing Number: • 21.027 Federal Award Identification Number: SLFRP0126 Pass-Through Agency: State of Colorado Department of Human Services (CDHS), Signal Behavioral Health Network, and City and Country of Broomfield Department of Health and Human Services Pass-Through Number(s): N/A Award Period: 7/1/2022 – 6/30/2023 Type of Finding:

• Significant Deficiency in Internal Control over Compliance and Other Matters

Criteria or specific requirement: According to § 2 CFR 200.332 Requirements for Pass-through Entities, all pass-through entities must evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. In addition, the pass-through entity must monitor the activities of the subrecipient as necessary to ensure that the subaward is used for authorized purposes, in compliance with Federal statutes, regulations, and the terms and conditions of the subaward; and that subaward performance goals are achieved.

Condition: The Organization lacked a process to complete a risk assessment that would allow the Organization to evaluate each subrecipient's risk of noncompliance with Federal statutes, regulations, and the terms and conditions of the subaward for purposes of determining the appropriate subrecipient monitoring. Questioned costs: None.

Context: We noted the Organization is not in compliance with requirements defined within 2 CFR §200.332(b).

Cause: The Organization lacks established internal controls and procedures that ensure a complete risk assessment is performed on all Subrecipients.

Effect: The lack of internal controls over this compliance requirement provides an opportunity for noncompliance. Repeat Finding: Yes - Modified: 2022-004

Recommendation: The Organization created a Subrecipient Monitoring Policy in fiscal year 2023 to include performing subrecipient risk assessments on all subrecipient relationships entered into by the Organization. As part of the Organization’s subrecipient monitoring process it received an incomplete audit report from a subrecipient and as a result the Organization was not aware of the audit findings the subrecipient had received. We recommend the Organization utilize the federal audit clearinghouse to verify the audit reports the subrecipients are providing.

Views of responsible officials: Management concurs with the audit finding. Subrecipient monitoring was performed per the existing policy but the subrecipient provided inaccurate information on the monitoring questionnaire and incomplete audit information. The information provided by the subrecipient was not verified against the Federal Audit Clearinghouse. The risk assessment policy will be updated to ensure that information provided by subrecipients is verified against the Federal Audit Clearinghouse to ensure a complete risk assessment is performed.