Allowability of Recovery Act Costs Claimed by Grace Hill Neighborhood Health Centers, Inc., for the Period June 29, 2009, Through June 28, 2011

Costs claimed by Grace Hill Neighborhood Health Centers, Inc. (Grace Hill), under a Capital Improvement Program grant were generally allowable pursuant to applicable Federal regulations and the terms of the grant. The Health Resources and Services Administration (HRSA) awarded this grant to Grace Hill using American Recovery and Reinvestment Act of 2009 funding in support of the Health Center Program. However, Grace Hill's accounting system allowed for a cash advance of $78,000 for costs that were not directly related to the project. Although these costs were later reclassified, the potential existed for Grace Hill to accrue interest on those funds until they were actually used to pay for direct project costs.