A state audit report released last week found that during 2003 the Spokane Regional Health District overcharged federal grants by $54,204.
The majority was used to buy audiovisual equipment that wasn’t used significantly by the federal program charged for the equipment. The money, which was less than 1 percent of the federal grant money spent by the agency that year, will be returned.
This is the second year in a row that auditors found the agency overcharging federal grants.
But the agency is correcting the problems, said Jennifer Fields, assistant audit manager for the Washington state Auditor’s Office in Spokane.
The health agency received the first negative finding in August 2003, when it was halfway into the calendar year evaluated in the recent audit report.
“As soon as we learned of the issues the audit was raising, we took steps to ensure it wouldn’t happen again,” said David Faire, health district finance director.
The program that made the overcharges helped chemically dependent adults get into treatment. Clients were helped to get medical, mental health, education, employment, housing and other services. The program was a three-year grant from the U.S. Center for Substance Abuse Treatment. It ended in June.
The overcharges to the federal grant included:
• $7,896 in salary and benefits for time an employee was working for other programs.
• $2,622 for remodeling the second floor of the agency’s headquarters. The federal program occupied only part of the space.
• $956 for a “personal safety and training” class taken by an employee who did not work in the program.
• $420 for an employee to attend a grant-writing conference.
• $42,310 for audiovisual equipment. “We were not able to identify any significant use of the equipment for program activities,” the report states.
In addition, the agency could not document that it had followed acceptable criteria to select vendors awarded contracts paid with federal money.
Many of the problems were caused by lack of proper documentation, Faire said.
For example, the health district had a verbal agreement with the grant program to buy the audiovisual equipment, but that agreement was never documented. Also, the program did use the equipment at least four times a year, but that was never documented.
“We understand and are aware of the deficiencies we had in our procedures regarding documentation,” Faire said. “We’ve been conducting additional training for supervisors and program managers.”
The state conducts audits on behalf of the federal government when a local agency receives a significant amount in federal grants. In 2003, the health district received 30 federal grants and spent $9 million in federal money.