Audit 369914

2024-001 – Significant Deficiency in Internal Control and Noncompliance with Special Tests and Provisions in Application of Organization's Sliding Fee Discounts Policy Identification of federal program: 93.224 and 93.527 – Health Center Program Cluster Criteria: Health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. Condition: The Clinic has approved a SFDS policy that is consistent with requirements based on federal poverty guidelines and which requires eligible patients to pay a nominal fee as outlined in a Sliding Fee Co-Payment schedule. During the year the control that was designed failed to ensure the proper application of slide adjustments to patient accounts, which resulted in some patients paying amounts that were not in accordance with the SFDS. Cause: There was turnover during and in the months following the fiscal year end. Additionally, there was a change in the scope of work performed by the contract accountant. Effect or potential effect: The Clinic was not in compliance with special tests and provisions during the year. Misapplication of the policy could result in eligible patients being charged in excess of what is permitted by the SFDS, and conversely, excess discounts of patient balances over the adopted policy could result in financial losses to the Clinic. Questioned Costs: N/A Context: During review of the SFDS and the eligibility application utilized by the Clinic as a part of their process of determining and documenting the discounts applicable, the auditor reviewed the application completed for 25 patient accounts, in which it was noted: • Seven instances where an approved eligibility application was not filed and retained but the discount was still applied. Management identified this issue and adjusted the patient accounts accordingly. However, this adjustment did not get posted to the accounting records and therefore was not reflected in the population sampled. • Three of ten samples tested for supporting evidence that the discount had been properly applied failed. Identification of Repeat Finding: This is not a repeat finding. Recommendation: We recommend the Clinic improve internal understanding of procedures by ensuring each individual is aware of their role in the process and there is a clear separation from an operating and an accounting perspective. Additionally, we recommend the Clinic perform procedures over the population by selecting a number of SFDS adjustments and reviewing the appropriate supporting documentation periodically throughout the year to ensure the SFDS adjustments are all correct and appropriately supported. Views of Responsible Officials: See Corrective Action Plan.