2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-102 Lack of Documentation Related to Reporting (prior two years 2022-108 and 2021-104) (initially reported 2018)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation in support of reporting requirements.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. Also, under compliance requirements for reporting 2 CFR 200.328 states that information must be collected with the frequency required by the terms and conditions of the federal award for effective monitoring of the federal awards.
Cause: Supporting records used to populate the Uniform Data System (UDS) report were not retained by the Organization.
Effect: The Organization could submit incorrect information.
Recommendation: Documentation should be prepared, reviewed, and retained to support the reporting. The documentation should clearly document who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Action: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-104 Lack of Controls Related to Filing Reports (initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Reporting
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H8K49674 (2023), C1439909 (2020), H2E50094 (2023), COVID-19 H8L50549 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization did not maintain proper documentation to support the review of the report prior to submission to the grantor, other than the review done by the preparer.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards.
Cause: The Organization did not have a process in place for review of the data being reported on the HRSA website for the funds being expensed under the federal award programs.
Effect: The Organization could submit incorrect information.
Recommendation: The documentation should be kept that clearly documents who prepared the information, who reviewed the information, and that the reviewer considered whether the information was complete and accurate.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The accounting staff was restructured in November 2024 with the addition of a Finance Manager and Senior Accountant to strengthen internal controls and facilitate segregation of duties best practices for day-to-day activities. In addition to review of month-end journal entries, reporting requirements with additional review was also implemented in 2025.
2023-105 Lack of Payroll Review and Approval (Also see financial statement finding 2023-004)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Period of Performance
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: No documentation of employee time approval by supervisors could be provided. The payroll clerk processes the payroll and the finance director approves through the releasing of the payroll. However, there is no formal documentation of the overall review of the payroll process and the supervisors’ approval of time recorded by employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards The requirement is for the Organization to have a process in place to correctly calculate, record, and pay payroll related expenses in accordance with grant and program requirements.
Cause: The Organization does not have an effective process to review, approve, and document the supervisor’s approvals prior to making the payments.
Effect: This situation provides an opportunity for errors and unauthorized transactions to occur and not be detected in a timely manner resulting in payroll expenses to be charged incorrectly to the federal awards.
Recommendation: We recommend that the Organization begin using the approval feature in the Time Clock program to document the supervisor's approval of time for hourly employees. We also recommend that the Organization develop a process that includes and documents the review of payroll by an employee at least one level above the preparer prior to payment.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a new payroll process using the ADP system. Employees are now required to approve their own time within the ADP portal, and this approval is documented. Following this, supervisors review and approve their employees’ time, which is also documented in the portal. Human Resources then prepares the payroll, reviewing all entries and initialing a shared file of payroll items and providing backup for changes. Once HR confirms accuracy, they notify Finance. Finance then reviews the payroll, with the Finance Manger providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within the ADP by employees and supervisors and the shared file drive where HR and Finance initial off on the reviewed payroll items, ensuring a traceable record of the entire payroll approval process.
2023-106 Missing Documentation to Support Payroll Authorizations (Initially reported 2023)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Allowable Activities and Costs
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), H2E45500 (2022), COVID-19 ARP H8F40324 (2021), H2E50094 (2023) and COVID-19 H8G48569 (2022)
Finding Type: Significant Deficiency in Internal Control
Questioned Costs: $0
Condition: The Organization could not provide one salary authorization form for sample selection of 40 employees.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards Under compliance requirements for allowable activities and costs, management should ensure that costs can be supported by underlying accounting documentation.
Cause: Filing errors resulting in staff being unable to provide the requested authorizations.
Effect: The Organization would not be able to provide the related documentation to support allowable activities and costs under the program which could lead to loss in grant funding.
Recommendation: We recommend that the Organization should put in a process to appropriately retain documentation to support allowable activities and costs under applicable grant programs.
Views of Responsible Officials and Planned Corrective Actions: The Organization has implemented a process to ensure that all salary authorizations are properly obtained and stored. When there is any change in an employee's status or salary, an Employee Status Form is completed and signed by the employee, their supervisor, and Human Resources, and when required, by the COO and CEO. Additionally, the salary authorization form is added to a secure shared file drive. The shared file drive includes a section where all salary changes are listed. Both HR and Finance initial off to confirm that each salary change is supported by the proper documentation during the payroll review process.
2023-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (prior two years 2022-101 and 2021-101) (initially reported 2014)
Assistance Listing Number: 93.224 and 93.527
Name of Federal Agency: Department of Health and Human Services, HRSA
Program Title: Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homeless, and Public Housing Primary Care) and Grants for New and Expanded Services Under the Health Center Program
Compliance Requirement: Special Tests and Provisions – Sliding Fee Discounts
Pass-through Entity: N/A
Federal Grant/Contract Number and Grant Year: H8006452 (2022 and 2023), COVID-19 H8G48569 (2023) and COVID-19 ARP H8F40324 (2021)
Finding Type: Material Weakness in Internal Control
Questioned Costs: $0
Condition: The Organization lacks consistently applied processes and procedures related to the application of the sliding fee scale. The Organization also lacks a clear review process related to the sliding fee scale to identify errors quickly to allow for corrections to be made in a timely manner.
- Sliding fee scales were not used for the agreement that the Organization has in place with the local school district in which they provide services to students. The agreement specifically does not allow the Organization to obtain information related to household size and income as needed to appropriately place the family on the sliding fee scale. The agreement also indicates no amounts can be collected from the students, except when that student has insurance which allows the Organization to bill the insurance company for a portion of the fees.
- Sliding fee scales are not used in the disaster recovery bus program that does not charge the patients for services.
- 14 of the sixty encounters sampled where the sliding scale was used had the wrong sliding fee scale applied based on information obtained about the patient’s family size and income. Four of the sixty encounters were for lab services which were not documented on the billing system and therefore the correct amount of the sliding scale fee could not be determined.
Criteria: 2 CFR section 200.303 requires that nonfederal entities receiving federal awards establish and maintain internal control over the federal awards that provides reasonable assurance that the nonfederal entity is managing the federal awards in compliance with federal statutes, regulations, and the terms and conditions of the federal awards. 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 based on the patient's ability to pay (42 U.S.C 254b(k)(3)(G)(i)). The patient's ability to pay is based on the official poverty guidelines, as revised annually by the U.S. Department of Health and Human Services (42 U.S.C 9902(2)).
Cause: Failure to apply the sliding fee correctly, as noted in six of the encounters above, was due to improper staff training or failure to properly monitor the process. Three of the encounters could not be determined for application of the correct sliding fee scale as lab fees were not documented in the billing system. Failure to apply the sliding fee scales due to the requirements of the agreement with the local school district and procedures applied to the disaster recovery bus program do not follow the written procedures of the Organization for use of the sliding fee scale.
Effect: The Organization could be incorrectly billing for services and maintaining customer account balances at incorrect amounts.
Recommendation: Staff should be consistently trained in how patients should complete the intake forms, including the sliding fee scale application, and require patients complete the form appropriately, including refusal to provide information, if applicable. Staff should also be consistently trained in what documentation is considered sufficient to support income identified as well as verify the application is consistent with the documentation and, when needed, clearly document the reasons for inconsistency. Staff should make every effort to obtain documentation of patient income in accordance with internal policies and procedures.
Patients should be billed the usual and customary billing rates for all services until all documentation is received, or policies are adjusted to allow for self-determination by patients in certain situations. A process should be put in place to track patients to attempt further collection of the necessary data that would allow for adjustment of the bill after the fact when necessary. These exceptions should be tracked each month with the monthly review by the regional operations managers. The reviews by the regional operations managers should be documented and retained including the results and corrective action of the follow-up on deficiencies noted.
The Organization should discuss with HRSA what could be done to either adjust policies and procedures used during the school visits to be compliant or obtain a waiver from HRSA to indicate their knowledge and approval of the school visits and disaster bus program visits not being compliant with the application of the sliding fee scale requirements.
Views of Responsible Officials and Planned Corrective Actions: The Organization has hired a new Chief Financial Officer as well as additional supporting staff within the finance department. The Billing and Collections Policy was updated to waive co-pays for students in the School-Based Program. The Billing Department is in the process of auditing and implementing quarterly feedback & training sessions for the Operations Department for training and compliance for the Sliding Fee Discount Program. This process was implemented in 2025.