ESPERANZA HEALTH CENTERS

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Number: H80CS24103-13-00; H80CS24103-14-04 Award Periods: May 1, 2024 – April 30, 2025; May 1, 2025 – April 30, 2026 Criteria: CFR § 200.303 Internal controls states that the non-Federal entity must: (a) 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. Condition: The Organization filed a Standard Form 425 (SF-425) Federal Financial Report which included inaccurate information. Questioned Costs: None. Context: The SF-425 filed was for the project period beginning May 1, 2024 through April 30, 2025 and failed…

Corrective action: Health Center Program – Assistance Listing No. 93.224 & 93.527 Recommendation: CLA recommends that the Organization review its FFR to ensure that the grant drawdowns reconcile to the amount reported as federal share of expenditures and any carryover requests are done promptly. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Moving forward, we will require one person to prepare the FFR and another person to review prior to submission.. Name(s) of the contact person(s) responsible for corrective action: Ryan Gadia, CFO, and Juan Cardenas, Controller Planned completion date for corrective action plan: June 30,…

Procurement Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program & Health Center Infrastructure Support Assistance Listing Number: 93.224/93.527 & 93.526 Federal Award Identification Number: H8GCS47470-01-01 & C8ECS44866-01-00 Award Periods: December 1, 2022 – December 31, 2023; September 15, 2021 – September 14, 2024 Type of Finding: Immaterial noncompliance and significant deficiency in internal control over compliance Criteria: § 200.320 Methods of procurement to be followed: The non-Federal entity must have and use documented procurement procedures, consistent with the standards of this section and § 200.317, 200.318, and 200.319 for any of the approved procurement methods used for the acquisition of property or services required under a Federal award or sub-award. Condition: While the Organization has a procurement policy i…

Corrective action: Actions taken in response to finding: Esperanza will: 1. Sole source justification - Implement a Summary Approval and Signoff Sheet (SASS) for new contracts that documents, among other things, the justification for sole source purchases. 2. Create a pre-approved vendors list to streamline procurement while ensuring compliance. a. Require justification and periodic review for vendor inclusion 3. Review, on an annual basis, nonpersonnel costs charged to federal grants to ensure compliance. Name(s) of the contact person(s) responsible for corrective action: Ryan Gadia Planned completion date for corrective action plan: June 30, 2025

Suspension and Debarment Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Infrastructure Support Assistance Listing Number: 93.526 Federal Award Identification Number: C8ECS44866-01-00 Award Periods: September 15, 2021 – September 14, 2024 Type of Finding: Immaterial noncompliance and significant deficiency in internal control over compliance Criteria: 2 CFR sections 200.212 and 200.318(h); 2 CFR section 180.300; 48 CFR section 52.209-6 outlines that the non-Federal entity must verify that the agency in which it is entering into a contract is not suspended or debarred or otherwise excluded from participating in the transaction. Condition: The Organization did not check to see if a vendor was suspended or debarred prior to entering a contract with the vendor. Questioned Costs: $38,515. Context: The Organization purchased medical eq…

Corrective action: Action taken in response to finding: Esperanza will: 1. For new vendors – review if the vendor is included in the federal list of debarred, suspended, or excluded vendors 2. For existing vendors – review, on an annual basis, if vendors are included in the federal list of debarred, suspended, or excluded vendors Name(s) of the contact person(s) responsible for corrective action: Ryan Gadia Planned completion date for corrective action plan: June 30, 2025

Federal Agency: U.S. Department of Health and Human Services Federal Program Name: Health Center Program Assistance Listing Number: 93.224/93.527 Federal Award Identification Number: H8F40833-01-00; H8024103-11-00 Award Periods: April 1, 2021 – March 31, 2023; May 1, 2022 – April 30, 2023 Type of Finding: Immaterial noncompliance and Significant deficiency in internal control over compliance Criteria: The Consolidated Appropriations Act, 2023, Division H, § 202 indicates "None of the funds appropriated in this title shall be used to pay the salary of an individual, through a grant or other extramural mechanism, at a rate in excess of Executive Level II." If salaries are in excess of the salary cap, the amount of salaries charged to a federal award must be reduced to the Executive Level II amount, with any excess being paid by the non-federal entity with non-federal funds. Condition: The …

Corrective action: Action taken in response to finding: Esperanza reviewed the current year’s HRSA drawdown sheet and updated all personnel salaries. We will also revise the draw down sheet so each person’s current salary is visible each month, and apply conditional formatting to highlight any person making in excess of the salary cap. Name(s) of the contact person(s) responsible for corrective action: Ryan Gadia Planned completion date for corrective action plan: May 31, 2024. If there are any questions regarding this plan, please call Ryan Gadia at (773) 640-5792.