Finding 2023-001: Internal Control Over Financial Reporting
Criteria and Condition: Internal controls over financial reporting should be designed and in
place to prevent, detect, and correct material misstatement in the financial statements in a
timely manner. The internal controls were unable to prevent, detect, and correct several material
errors in the preparation of the financial statements as of and for the year ended June 30, 2023,
in a timely manner. This resulted in resulted in numerous significant adjustments related to
assets, liabilities, net assets, revenue, and expenses.
Cause: Existing internal controls over financial reporting require that management perform
meaningful analysis of internal records and general ledger accounts on a regular basis.
Management is not performing a meaningful analysis of internal records and the general ledger,
which results in financial statements that contain a significant number of material errors.
Questioned Costs: None
Recommendations: We recommend that management develop formal policies and procedures
to identify material misstatements, which should include performing meaningful analysis of
internal records and general ledger accounts on a regular basis. This will allow management to
timely identify unusual trends in internal records and general ledger accounts that could be
indicative of errors that cause the Center’s financial statements to be misstated.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve monitoring of the financial reporting process and to ensure meaningful analysis
of financial records is occurring on a regular basis. Management has hired an experienced Chief
Financial Officer for the finance department, has begun identifying areas of improvement within
the finance department, and is in the process of implementing new procedures that will improve
the accuracy and timeliness of financial reporting.
Finding 2023-002: Timely Single Audit Submission
Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit
Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report.
or nine months after the end of the audit period. The Center did not timely complete the Single
Audit and submit to the Federal Audit Clearinghouse within nine months form the end of the
audit period.
Context: Information required to complete the financial statements was not prepared and ready
to audit in a timely manner. This resulted in the financial statements and Single Audit to not be
finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine
months of the end of the audit period.
Effect: The data collection form and reporting package for the Single Audit for the year ended
June 30, 2023 were not submitted within the specified timeframe resulting in award drawdown
restrictions.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the
required reports were being completed and submitted in a timely manner.
Recommendations: We recommend that management improve their reporting processes and
controls to ensure that the Single Audit is completed and submitted to the Federal Audit
Clearinghouse in a timely manner.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve the internal controls over financial reporting and compliance to ensure that
reporting can be completed in an accurate and timely manner. These changes include updates
of internal processes and the hiring of key members of financial management.
Finding 2023-003: Sliding Fee Discounts
Criteria and Condition: Health centers must prepare and apply a sliding fee discount schedule
so that the amounts owed for health center services by eligible patients are adjusted
(discounted) based on the patient’s ability to pay. The adjustments extended to the patients are
based on Federal Poverty Guidelines that take into consideration the annual income earned by
the individuals and families. There were no documents maintained to support the sliding fee
discounts applied to twenty-four patient accounts. As a result, there is no way to verify if the
discount applied was representative of the patients’ poverty levels. Lastly, four patients were
assigned the incorrect poverty level resulting in services not being discounted properly.
Questioned Costs: None
Cause: Existing internal controls over compliance are not effective at ensuring that sliding fee
discount applications for patients are retained on file or ensuring that patient eligibility for sliding
fee discounts are accurately determined.
Effect: Of the forty patients reviewed that had received sliding fee discounts, twenty-four
compliance findings were noted for the year ended June 30, 2023.
Recommendations: We recommend that management implement a checklist to ensure that all
information required to fill out a patient’s sliding fee discount application is obtained, that the
determination of a patient’s eligibility for a sliding fee discount is independently reviewed and
approved by a supervisor, and that a patient’s application is properly retained.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve the internal controls over compliance over the sliding fee discount.
Finding 2023-001: Internal Control Over Financial Reporting
Criteria and Condition: Internal controls over financial reporting should be designed and in
place to prevent, detect, and correct material misstatement in the financial statements in a
timely manner. The internal controls were unable to prevent, detect, and correct several material
errors in the preparation of the financial statements as of and for the year ended June 30, 2023,
in a timely manner. This resulted in resulted in numerous significant adjustments related to
assets, liabilities, net assets, revenue, and expenses.
Cause: Existing internal controls over financial reporting require that management perform
meaningful analysis of internal records and general ledger accounts on a regular basis.
Management is not performing a meaningful analysis of internal records and the general ledger,
which results in financial statements that contain a significant number of material errors.
Questioned Costs: None
Recommendations: We recommend that management develop formal policies and procedures
to identify material misstatements, which should include performing meaningful analysis of
internal records and general ledger accounts on a regular basis. This will allow management to
timely identify unusual trends in internal records and general ledger accounts that could be
indicative of errors that cause the Center’s financial statements to be misstated.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve monitoring of the financial reporting process and to ensure meaningful analysis
of financial records is occurring on a regular basis. Management has hired an experienced Chief
Financial Officer for the finance department, has begun identifying areas of improvement within
the finance department, and is in the process of implementing new procedures that will improve
the accuracy and timeliness of financial reporting.
Finding 2023-002: Timely Single Audit Submission
Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit
Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report.
or nine months after the end of the audit period. The Center did not timely complete the Single
Audit and submit to the Federal Audit Clearinghouse within nine months form the end of the
audit period.
Context: Information required to complete the financial statements was not prepared and ready
to audit in a timely manner. This resulted in the financial statements and Single Audit to not be
finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine
months of the end of the audit period.
Effect: The data collection form and reporting package for the Single Audit for the year ended
June 30, 2023 were not submitted within the specified timeframe resulting in award drawdown
restrictions.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the
required reports were being completed and submitted in a timely manner.
Recommendations: We recommend that management improve their reporting processes and
controls to ensure that the Single Audit is completed and submitted to the Federal Audit
Clearinghouse in a timely manner.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve the internal controls over financial reporting and compliance to ensure that
reporting can be completed in an accurate and timely manner. These changes include updates
of internal processes and the hiring of key members of financial management.
Finding 2023-003: Sliding Fee Discounts
Criteria and Condition: Health centers must prepare and apply a sliding fee discount schedule
so that the amounts owed for health center services by eligible patients are adjusted
(discounted) based on the patient’s ability to pay. The adjustments extended to the patients are
based on Federal Poverty Guidelines that take into consideration the annual income earned by
the individuals and families. There were no documents maintained to support the sliding fee
discounts applied to twenty-four patient accounts. As a result, there is no way to verify if the
discount applied was representative of the patients’ poverty levels. Lastly, four patients were
assigned the incorrect poverty level resulting in services not being discounted properly.
Questioned Costs: None
Cause: Existing internal controls over compliance are not effective at ensuring that sliding fee
discount applications for patients are retained on file or ensuring that patient eligibility for sliding
fee discounts are accurately determined.
Effect: Of the forty patients reviewed that had received sliding fee discounts, twenty-four
compliance findings were noted for the year ended June 30, 2023.
Recommendations: We recommend that management implement a checklist to ensure that all
information required to fill out a patient’s sliding fee discount application is obtained, that the
determination of a patient’s eligibility for a sliding fee discount is independently reviewed and
approved by a supervisor, and that a patient’s application is properly retained.
Views of Responsible Officials and Planned Corrective Actions: Management is taking
steps to improve the internal controls over compliance over the sliding fee discount.