City of Chicago's Efforts to Account for and Monitor Sub-Recipients' Use of Bioterrorism Hospital Preparedness Program Funds - Department of Public Health

EXECUTIVE SUMMARY:

The objectives of this review were to determine whether the Chicago Department of Public Health (Department): (i) properly recorded, summarized and reported bioterrorism preparedness transactions in accordance with the terms and conditions of the cooperative agreements and (ii) had controls and procedures to monitor sub-recipient expenditures of HRSA funds.  We determined that the Department generally accounted for program funds in accordance with the terms and conditions of the cooperative agreement.  However, the Department did not segregate expenditures by phase, within phase, or by priority area.  Under new guidelines effective August 31, 2003, grantees will be required to maintain a financial accounting system capable of tracking expenditures by priority area, critical benchmark, and by funds allocated to hospitals and other health care entities.  We also found that the Department included indirect costs of $62,360, or approximately 14 percent of the total costs expended.  HRSA guidance restricts grantees to indirect costs of 10 percent.  We recommended the Department: (i) implement procedures to comply with the new requirements, and (ii) monitor indirect costs to ensure that it does not exceed the 10 percent restriction imposed by HRSA.  Department officials generally concurred with our findings and recommendations.