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Audit (A-02-11-02011)

Consejo de Salud de Puerto Rico, Inc., Did Not Always Claim Recovery Act Costs in Accordance With Federal Requirements

Executive Summary

Consejo de Salud de Puerto Rico, Inc. (Consejo), a nonprofit community health center, received $4.2 million in grants from the Health Resources and Services Administration (HRSA) under the American Recovery and Reinvestment Act of 2009.

Of the $2.5 million in costs that we reviewed that were claimed during the period July 22, 2009, through August 4, 2011, Consejo claimed $957,000 in costs that were allowable under the terms of the grant and applicable Federal requirements. We were unable to determine if the remaining $1.6 million in salary and fringe benefit costs were allowable because Consejo did not prepare personnel activity reports for employees whose time was charged to the grant. Moreover, Consejo did not have written procedures for determining the allowability of expenditures in accordance with applicable Federal requirements.

We recommended that HRSA (1) either require Consejo to refund $1.6 million to the Federal Government or work with Consejo to determine whether any of the costs that it claimed against these grants were allowable, (2) educate Consejo officials on Federal requirements for supporting salaries and wages, and (3) ensure that Consejo develops written procedures for determining the allowability of expenditures and maintains personnel activity reports for each employee who works on Federal awards. Consejo disagreed with our first recommendation and generally agreed with our remaining recommendations. HRSA concurred with our recommendations.

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