Henry J. Austin Health Center, Inc., a Health Resources and Services Administration Grantee, Did Not Comply With Federal Grant Requirements

The Health Resources and Services Administration (HRSA) awarded Henry J. Austin Health Center, Inc. (HJAHC), a not-for-profit organization, $8.3 million in grant funds through several Community Health Center Program grants to provide comprehensive primary care services in the Trenton, New Jersey, area. Of this amount, $281,000 was to support certain activities (i.e., one-time equipment purchases).

HJAHC did not comply with Federal requirements related to its Community Health Center Program grants. Specifically, HJAHC did not track and account for grant expenditures separately from other Federal and non-Federal operating expenses, did not reconcile actual grant expenditures to its approved budgeted amounts used to draw down Federal funds, and did not maintain documentation that supported grant expenditures for certain activities. As a result, we could not determine whether $8 million in costs claimed by HJAHC for certain Community Health Center Program grants were allowable. In addition, HJAHC claimed costs totaling $243,000 for certain activities that were unallowable.

We recommended that HRSA (1) require HJAHC to refund $8 million to the Federal Government or work with HJAHC to determine what portion of these costs claimed to the Community Health Center Program grants were allowable and (2) require HJAHC to refund $243,000 to the Federal Government for unallowable costs. We also made procedural recommendations.

HJAHC disagreed with our findings related to its tracking and accounting for grant funds and claiming of personnel costs. HRSA concurred with our recommendations. Specifically, HRSA agreed to work with HJAHC to determine what portion of the $8.2 million claimed to the Community Health Center Program grants were allowable and if necessary, require a refund. In addition, HRSA stated that it has been working with HJAHC to improve its financial management system and practices.