Sneak Preview: HRSA To Evaluate Health Center Program Spending
(The following was excerpted from an article in Thompson’s Grants Compliance Expert.) Although the Department of Health and Human Services (HHS) Health Resources and Services Administration (HRSA) was skeptical about how the HHS Office of Inspector General (OIG) determined its findings in a recent audit, the agency agreed to assess numerous health centers’ use of COVID-19 supplemental grant funding to determine if any improperly spent funds or undocumented costs need to be returned to the federal government.
Congress provided about $2 billion to HRSA under the Health Center Program in response to the COVID-19 pandemic to help vulnerable populations and underserved communities detect, prevent, diagnose and treat COVID-19. HRSA, in turn, made these funds immediately available to health centers, proving guidance on allowable uses of the funds and requiring health centers to submit quarterly progress reports on the status of activities supported with these dollars. OIG audited 30 selected health centers nationwide that received a total of about $70 million under this program to assess whether they spent funds in accordance with federal grant requirements and grant terms and conditions.
OIG found that 10 of the health centers charged unallowable costs totaling some $787,152 to the program, while 13 health centers may not have properly allocated salary and fringe benefit costs totaling just over $15 million. “These deficiencies occurred because health centers did not always follow HRSA’s guidance for financial management systems and internal controls to ensure that only allowable, allocable and documented costs were charged to their COVID-19 supplemental grant funding,” according to the audit.
Among the unallowable costs included those for testing services paid by HRSA’s COVID-19 Uninsured Program; costs not related to the grants or adequately supported (45 C.F.R. §75.403(a)); costs not consistent with the purpose of the grant (45 C.F.R. §75.405(a)); duplicate salaries charged to multiple funding sources; and salaries that exceeded the federal government’s executive level II salary limit (45 C.F.R. §75.403(b)).
For example, three sampled health centers charged salaries and other costs totaling $319,300 to their COVID-19 grants for expanding capacity for COVID-19 testing, which was not related to the COVID-19 testing activities under the program and therefore not consistent with grant terms and conditions. One health center in particular charged all of its salary and fringe benefits costs to its COVID-19 grant for an OB/GYN physician that did not work directly with COVID-19 testing. Another health center used its grant funds to purchase a mobile unit to increase its dental services capacity and provide services to patients in rural areas with limited access to care, which was not covered as an allowable cost under the grant.
(The full version of this story has now been made available to all for a limited time here.)
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