Audit 365222

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-102 Absence of Physical Inventory of Property (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Equipment and Real Property Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021) and G2846293 (2022) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not perform a physical inventory of property purchased with federal awards that could be reconciled back to the capital assets records. This is a systemic issue that has been included as a management point in prior years. 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 the compliance requirements for equipment and real property management, nonfederal entities should maintain proper records for equipment and real property and adequately safeguard and maintain equipment and real property that is purchased with federal awards. Cause: The Organization has not implemented an annual physical inventory of property. Effect: The Organization may not be able to adequately track acquisitions and disposals of assets purchased with federal awards. Recommendation: We recommend that the Organization perform an annual inventory of all physical assets purchased with federal awards. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and will implement procedures to ensure a physical inventory of property purchased with federal awards is conducted annually and reconciled to capital asset records. With the recent hiring of a Chief Financial Officer and additional finance staff, the Organization is establishing written procedures that require staff to schedule and perform an annual physical inspection of all federally funded property, compare results to the capital asset ledger, and investigate and resolve any discrepancies. Documentation of the physical inventory and reconciliation will be retained for management review and audit purposes.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.

2024-102 Absence of Physical Inventory of Property (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Equipment and Real Property Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021) and G2846293 (2022) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not perform a physical inventory of property purchased with federal awards that could be reconciled back to the capital assets records. This is a systemic issue that has been included as a management point in prior years. 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 the compliance requirements for equipment and real property management, nonfederal entities should maintain proper records for equipment and real property and adequately safeguard and maintain equipment and real property that is purchased with federal awards. Cause: The Organization has not implemented an annual physical inventory of property. Effect: The Organization may not be able to adequately track acquisitions and disposals of assets purchased with federal awards. Recommendation: We recommend that the Organization perform an annual inventory of all physical assets purchased with federal awards. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and will implement procedures to ensure a physical inventory of property purchased with federal awards is conducted annually and reconciled to capital asset records. With the recent hiring of a Chief Financial Officer and additional finance staff, the Organization is establishing written procedures that require staff to schedule and perform an annual physical inspection of all federally funded property, compare results to the capital asset ledger, and investigate and resolve any discrepancies. Documentation of the physical inventory and reconciliation will be retained for management review and audit purposes.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-101 Lack of Internal Controls over the Application of the Sliding Fee Scale (repeated, prior two years 2023-101 and 2022-101) (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 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), COVID-19 H8L50549 (2023), and COVID-19 H8G48569 (2022). 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. This has been a systemic issue as a repeat finding in the prior years. The sample was not statistically valid. - 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. - Thirteen 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. 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 13 of the encounters above, was due to improper staff training or failure to properly monitor the process. 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.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-102 Absence of Physical Inventory of Property (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Equipment and Real Property Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021) and G2846293 (2022) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not perform a physical inventory of property purchased with federal awards that could be reconciled back to the capital assets records. This is a systemic issue that has been included as a management point in prior years. 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 the compliance requirements for equipment and real property management, nonfederal entities should maintain proper records for equipment and real property and adequately safeguard and maintain equipment and real property that is purchased with federal awards. Cause: The Organization has not implemented an annual physical inventory of property. Effect: The Organization may not be able to adequately track acquisitions and disposals of assets purchased with federal awards. Recommendation: We recommend that the Organization perform an annual inventory of all physical assets purchased with federal awards. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and will implement procedures to ensure a physical inventory of property purchased with federal awards is conducted annually and reconciled to capital asset records. With the recent hiring of a Chief Financial Officer and additional finance staff, the Organization is establishing written procedures that require staff to schedule and perform an annual physical inspection of all federally funded property, compare results to the capital asset ledger, and investigate and resolve any discrepancies. Documentation of the physical inventory and reconciliation will be retained for management review and audit purposes.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.

2024-102 Absence of Physical Inventory of Property (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Equipment and Real Property Management Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021) and G2846293 (2022) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $0 Condition: The Organization did not perform a physical inventory of property purchased with federal awards that could be reconciled back to the capital assets records. This is a systemic issue that has been included as a management point in prior years. 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 the compliance requirements for equipment and real property management, nonfederal entities should maintain proper records for equipment and real property and adequately safeguard and maintain equipment and real property that is purchased with federal awards. Cause: The Organization has not implemented an annual physical inventory of property. Effect: The Organization may not be able to adequately track acquisitions and disposals of assets purchased with federal awards. Recommendation: We recommend that the Organization perform an annual inventory of all physical assets purchased with federal awards. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and will implement procedures to ensure a physical inventory of property purchased with federal awards is conducted annually and reconciled to capital asset records. With the recent hiring of a Chief Financial Officer and additional finance staff, the Organization is establishing written procedures that require staff to schedule and perform an annual physical inspection of all federally funded property, compare results to the capital asset ledger, and investigate and resolve any discrepancies. Documentation of the physical inventory and reconciliation will be retained for management review and audit purposes.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.

2024-104 Lack of Controls Related to Filing Reports (repeated, prior years 2023-104) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Reporting Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), C1650381 (2023), COVID-19 H8L50549 (2023), COVID-19 H8G48569 (2022).GA142923 (2021) G2846293 (2022) and G3949501 (2023) 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. In four of the reports selected for testing under ALN 93.224 and 93.527 two reports did not have documentation of approval by the CEO prior to submission. In three of the reports selected for testing under ALN 93.211 two reports did not have documentation of approval by the CEO prior to submission. This is a systemic issue that has been a finding in the previous year. The sample was not statistically valid. 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: 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.

2024-105 Lack of Payroll Review and Approval (repeated, prior year 2023-105) (initially reported 2023) Assistance Listing Number: 93.224, 93.527 and 93.211 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 and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs, Period of Performance Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) 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. This is a systemic issue and has been a finding in the previous year. 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: In April 2024, the Organization began using a third-party service provider to process payroll resulting in new control processes over the approval of time sheets by supervisors. We recommend that the Organization implement internal control procedures under the new payroll processes to ensure that documentation of supervisor approval of time sheets and subsequent payments is kept on file. 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 Manager providing the final approval within ADP once all items are confirmed. This entire process is fully documented, with approvals recorded within 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.

2024-106 Lack of Time and Effort Documentation Policy (Initially reported 2024) Assistance Listing Number: 93.224, 93.527 and 93.211. 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, and Rural Telemedicine Grants Compliance Requirement: Allowable Activities and Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: H8006452 (2024 and 2023), H2E45500 (2022), H8K49674 (2023), COVID-19 H2E50094 (2023), H8N53812 (2024), H8L50549 (2023), COVID-19 H8G48569 (2022), GA142923 (2021), G2846293(2022) and G3949501 (2023) Finding Type: Material Weakness in Internal Control Questioned Costs: $0 Condition: Time and effort reporting on actual hours spent on individual grant projects used to support the budgeted allocations of employee salary for each grant are not being kept. This is a systemic issue as a procedure for documenting time and effort by employee to justify the allocation of salaries across grants has not been put in place. This is a systematic issue. 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 eCFR 2 CFR 200.430 – Compensation – personal services budget estimates do not qualify as support for charges to federal awards. Cause: The Organization has not put into practice a procedure where records are kept with employee salaries spent by hour on individual grants to substantiate the amount of budgeted FTE used on the reimbursement requests. Effect: Budgeted FTE used for reimbursement requests may be inaccurate resulting in incorrect amounts being requested for reimbursement. Recommendation: The Organization should put in place procedures to accurately document employee hours spent on each of the federal awards to support the budgeted FTE used on the reimbursement requests. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have adopted a formal Time and Effort Reporting Policy. Standardized timesheets will be implemented and staff trained within 60 days, with supervisors reviewing submissions. The Finance Manager will monitor records monthly and conduct quarterly reviews to ensure compliance going forward.

2024-107 Incorrect Costs were Submitted for Reimbursement (Initially reported 2024) Assistance Listing Number: 93.211 Name of Federal Agency: Department of Health and Human Services, HRSA Program Title: Rural Telemedicine Grants Compliance Requirement: Allowable Costs Pass-through Entity: N/A Federal Grant/Contract Number and Grant Year: GA142923 (2021), G2846293 (2022), and GA3949501 (2023) Finding Type: Significant Deficiency in Internal Control Questioned Costs: $68 known and $589 likely Condition: The September 2024 reimbursement request included one instance, out of 37 items tested, where calculations of personnel expenditures allocable to the grant used an inaccurate amount, resulting in an overcharge of personnel expenditures. In calculating the allocable expenditure, wages for the month of August, which had previously been charged to the grant, were used to calculate the amount allocable to the grant for the month of September. Gross wages for August exceeded gross wages for September. Wages for both months were allowable and allocable to the grant. This is not a systemic problem but an isolated occurrence resulting in an immaterial difference in the amount reimbursed and the amount that should have been requested for September 2024 wages paid. The sample was not statistically valid. 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. Per 2 CFR 200.430(g), costs charged to federal awards must be supported by records that- support the distribution of salaries and wages among specific activities, while reflecting the total activity of the employee, not to exceed 100% of compensated activities. Cause: Wages requested for reimbursement in September 2024 reflected the wages paid in August 2024 in error and were not detected during the review process over the reimbursement request. Effect: Personnel costs charged to the award were based on amounts exceeding 100% of the employee’s compensation for one month, resulting in an overcharge to the award. Recommendation: Review of costs allocated and requested for reimbursement should incorporate consideration of the period the costs were incurred. Views of Responsible Officials and Planned Corrective Action: We acknowledge the finding and have strengthened our review process for reimbursement requests to prevent similar errors. Finance staff verify payroll periods against reimbursement periods before submission, and supervisors perform an additional review. This process includes careful cross-checking against the appropriate pay periods. This was an isolated occurrence with immaterial impact, but corrective steps will ensure accuracy in future requests.