Recovery Act Costs Claimed by SouthEast Lancaster Health Services, Inc., Were Generally Allowable

The Health Resources and Services Administration awarded three grants to SouthEast Lancaster Health Services, Inc. (SouthEast) using Recovery Act funding. Of the $4.2 million that SouthEast claimed, $3.97 million was allowable under the terms of the grants and applicable Federal regulations. We could not determine the allowability of $238,000 for salaries and fringe benefits. However, SouthEast claimed unallowable costs of $5,000 related to the purchase of equipment. In addition, SouthEast did not always make timely payments to vendors, and it reported some drawdowns and disbursements incorrectly.