Baltimore, MD - The Baltimore City Health Department (BCHD) is not effectively monitoring its grant subrecipients and cannot confirm whether grant funds are being used in accordance with federal and state regulations, according to a new Biennial Performance Audit by the Department of Audits (DOA).

DOA presented the performance review to the Board of Estimates at its January 18, 2023 meeting. The review covers fiscal years 2021 and 2020. The audit examined whether BCHD had effectively monitored subrecipients’ use of grant funds to confirm compliance with federal and state regulations.

According to the audit, BCHD’s internal control systems are not structured to provide effective monitoring of grant subrecipients. Not complying with grant requirements jeopardizes future funding for BCHD’s programs. If unresolved, federal or state government could withhold funds, disallow some spending, or terminate awards. This could hinder the City’s programs that support vulnerable populations.

“These federal and State dollars are a crucial lifeline for many of our City’s frontline health initiatives. The Mayor and the City administration must ensure that the Health Department can provide the necessary grant oversight," said Comptroller Bill Henry. "Literally, lives are at stake, we can’t lose sight of that."

Findings

Between FY2021 and 2020, BCHD received approximately $224 million in federal and state funding. Of that, approximately $74 million was awarded to subrecipients.

In that same period, BCHD only monitored one source of federal funding: the Ryan White program. The City did not monitor subrecipients of any other federal or state grants in that time. 

The Ryan White program helps low-income residents living with HIV. Ryan White programs received 38 percent of all subrecipient funding in FY2021 and 59 percent in FY2020.

BCHD monitored approximately 50 percent of Ryan White subrecipients through FY2021-2020, though Health Resources and Services Administration (HRSA) requires BCHD monitor 100 percent of subrecipients. With state grant subrecipients, BCHD again monitored just those receiving Ryan White grant funds. In FY2021, one out of 23 Ryan White subrecipients were monitored, while in FY2020 two of 23 recipients were monitored by BCHD.

Single Audits and Desk Reviews

Among Ryan White subrecipients, DOA noted:

• BCHD stated some subrecipients who used more than $750,000 in federal awards were a year or more behind in obtaining a Single Audit.
• BCHD does not follow up with subrecipients to address any findings noted in subrecipients’ Single Audit reports.
• When doing a desk audit, BCHD does not consistently review time and effort reports for payroll charges.
• The fiscal monitoring checklist does not address period of performance. However, according to BCHD, they have a practice of examining whether expenditures were spent in an allowable time frame when BCHD reviews expenditures.
• BCHD does not test or verify program income.
• BCHD did not have procedures to guide staff to follow up with subrecipients who do not provide documentation for desk audit process.
• Although BCHD performs desk reviews, they do not include all grant requirements in their review process.

Response

BCHD agreed with DOA’s findings and has presented action items to address monitoring grant awards. Among its changes, BCHD will update policies to include specific requirements for subrecipient monitoring by June 30, 2023.

The agency recently selected a Grants Compliance & Oversight Manager and a Grants Compliance & Oversight Analyst whose efforts will be geared toward the federal Uniform Guidance. The employees are scheduled to begin this month. BCHD also plans to hire a Director of Audits & Compliance by March 2023.

The full audit report can be found at the Comptroller’s website.

Background

The DOA is the City's independent auditor, providing various audits, attestation engagements, and assurance services with the overall goal of improving government accountability. DOA is part of the Office of the Comptroller.