Audit 295322

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-004 The schedule of expenditures of federal awards FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Material noncompliance, material weakness in internal control over compliance CRITERIA The schedule of expenditures of federal awards is supplemental information to the financial statements and is required by the Uniform Guidance. Management is responsible for maintaining and completing of the schedule of expenditures of federal awards. CONDITION AND CONTEXT The schedule of expenditures of federal awards was not completed within a reasonable time period after the year end, nor did it contain all federal awards expended by the Organization. CAUSE QCHC's management does not have a formal close process and material weaknesses exist in the financial reporting and closing cycle which causes delays in reconciling the general ledger to the subsidiary ledgers. As a result, information required to complete the schedule of expenditures of federal awards is not available on a timely basis. EFFECT OR POTENTIAL EFFECT The Organization is not in compliance with federal requirements regarding the preparation of the schedule of expenditures of federal awards. RECOMMENDATION The schedule of expenditures of federal awards should be maintained and completed by management as part of their monthly close process. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-005 Late Submission of Reporting Package and Data Collection Form FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance; material weakness in internal controls over compliance. CRITERIA The Uniform Guidance requires the reporting package and data collection form to be submitted to the Federal Audit Clearinghouse the earlier of 30 days after the reports are received from auditors or nine months after the end of the audit period, unless longer period of time was agreed to in advance by the cognizant or oversight agency for audit. The Federal Audit Clearinghouse considers the submission requirement complete when it has received the electronic submission of both the data collection form and the reporting package. CONDITION AND CONTEXT The Federal reporting deadline for the Single Audit Reporting Package was October 31, 2021; however, QCHC did not issue its Single Audit Reporting Package on time. CAUSE QCHC experienced issues with its accounting software and turnover within its accounting leadership, which had a direct impact on the financial reporting process which precipitated delinquency in commencing and completing the fiscal year 2020 audit. EFFECT OR POTENTIAL EFFECT The late submission of the reporting package affects all Federal programs administered by QCHC. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend that QCHC improve its financial reporting processes so that the Single Audit Reporting Package can be submitted to the Federal Audit Clearinghouse no later than the earlier of 30 days after the reports are received from auditors or nine months after yearend. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-006 Lack of Adequate Documentation to Support that Services Provided to Patients were an Allowable Activity FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE: 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to maintain adequate patient service and billings records to document patients are receiving services that are allowable under grant guidelines. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the nature of services provided to patients. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining patient records and charges documentation, patients may have received services that are unallowed or may have not been charged the proper amount for the services received. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to services provided to individuals. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.

FINDING 2020-007 Lack of Adequate Documentation for Application of Sliding Fee Discounts to Patient Charges with Sliding Fee Discount Schedule FEDERAL PROGRAM Health Centers Program (Health Centers Cluster) CFDA NUMBER AND TITLE 93.224 - Consolidated Health Centers (community health centers, migrant health centers, health care for the homeless, and public housing primary care centers) 93.527 - Affordable Care Act (ACA) grants for new and expanded services under the health center program. FINDING TYPE Noncompliance, material weakness in internal control over compliance. Criteria QCHC is required to prepare a sliding fee discount schedule and apply the appropriate calculated discount so that the amounts owed for health services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. CONDITION AND CONTEXT During the audit of the financial statements for the fiscal year ended July 31, 2020, QCHC was unable to provide adequate documentation to support the applied sliding fee discounts to patient charges in accordance with the sliding fee discount schedule. CAUSE In February 2020, the Organization was victim of a database breach which corrupted the Organization’s servers and resulted in the loss of general ledger and patient service data dating through February 2020. QCHC was unable to recover adequate documentation to support patient services. EFFECT OR POTENTIAL EFFECT By not retaining the correct sliding fee discounts to patients charges documentation, patients may not have been charged the proper amount for their services. This finding is a material weakness in internal control over compliance and noncompliance with the Uniform Guidance. RECOMMENDATION We recommend management improve their documentation retention processes to support to support individuals who receive the sliding fee discount. Views of Responsible Officials and Planned Corrective Action See the attached response and corrective action plan.