Corporación Salud Asegurada por Nuestra Organización Solidaria, Inc., a Health Resources and Services Administration Grantee, Generally Complied With Federal Grant Requirements

Corporación Salud Asegurada por Nuestra Organización Solidaria, Inc. (SANOS), a Health Resources and Services Administration (HRSA) grantee located in Caguas, Puerto Rico, generally complied with applicable Federal requirements and grant terms related to its Community Health Center Program grants. Specifically, SANOS had adequate financial management controls over supplemental grant funds and followed Federal procurement standards. However, we determined that SANOS claimed $4,000 in unallowable advertising costs.

SANOS claimed these unallowable advertising costs because it believed the costs were allowable and related to the Community Health Center Program.

We recommended that HRSA require SANOS to refund $4,000 to the Federal Government.

In its comments on our draft report, SANOS disagreed with our finding and maintained that the $4,000 in advertising costs was incurred in accordance with Federal guidance and its budget approved by HRSA. After reviewing SANOS's comments, we maintain that our finding is valid. The cost was not specifically incurred for program outreach and was not necessary to meet the requirements of the award. Therefore, it is unallowable.

In its comments on our draft report, HRSA agreed that advertising costs are not allowable "solely to promote the non-federal entity" and stated that it will work with SANOS to determine the allowability of the advertising costs.