Audit 349971

Finding 2024-001: 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, 2024, 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 been 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 2024-002: 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. For thirty-nine sliding fee discount applicants tested the Center could not provide full documentation required for the applications. For another nine sliding fee discount applicants tested the Center improperly applied the program for an immaterial difference. 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 sixty patients reviewed that had received sliding fee discounts, thirty-nine did not have the proper documentation maintained and were written off from sliding fee adjustments and another nine had compliance findings for improper application of the Organization’s sliding fee program noted for the year ended June 30, 2024. 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 and redesigned the program effective January 1, 2025.

Finding 2024-001: 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, 2024, 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 been 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 2024-002: 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. For thirty-nine sliding fee discount applicants tested the Center could not provide full documentation required for the applications. For another nine sliding fee discount applicants tested the Center improperly applied the program for an immaterial difference. 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 sixty patients reviewed that had received sliding fee discounts, thirty-nine did not have the proper documentation maintained and were written off from sliding fee adjustments and another nine had compliance findings for improper application of the Organization’s sliding fee program noted for the year ended June 30, 2024. 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 and redesigned the program effective January 1, 2025.