Audit 371776

Assistance Living Number 93.224 Community Health Centers Grant Award Number H80CS00112 US Department of Health and Human Services Finding 2024-003 Compliance Requirement: Allowable Cost/Cost Principles Type of Finding: Material Weakness Criteria: Uniform Guidance Allowable Costs/Cost Principles addresses activities related to payroll and personnel which should be supported by a system of internal control that provides reasonable assurance that the charges are accurate, allowable, and properly allocated and are incorporated into the official records of the recipient organization. Condition: A walkthrough of fourteen individuals was performed to review personnel files and payroll related to salary for the Organization. Of the fourteen files reviewed, eight had no approved current pay rate documented, one was paid at a rate different from current rate in the file, two files did not contain an I-9 Form, and one was missing Form W-4. Also, there was no time sheet provided to support the time charged to the federal grant for three of the fourteen individuals tested. Cause: Management of the Organization’s human resources and payroll departments experienced substantial turnover during the year, and personnel files were not prioritized to keep them in good order. Payroll documentation was not maintained properly. Also, new administrators were unaware that salaried employees who are paid with federal funds must maintain documentation to support time allocated. Effect or Potential Effect: Without proper documentation, it is not possible to support the appropriate wage rate being paid to an individual. Also, it is not possible to prove an accurate allocation of time charged to a federal grant without time sheets, in accordance with the system that was in use. Questioned Costs: $330,330 Repeat Finding: The finding is a repeat finding (see prior year finding number 2023-002). Recommendation: We recommend that administrators become familiar with time and effort reporting requirements. Consider the use of a checklist within each personnel file as an additional procedure to ensure that each file contains all necessary documents and that the file has been updated for current rates of pay. Views of Responsible Officials: Management agrees with the recommendation and will implement the use of a checklist to improve compliance.

Assistance Listing Numbers 93.224 Community Health Centers Grant Number H80CS00112 US Department of Health and Human Services Finding 2024-004 Compliance Requirement: Reporting Type of Finding: Material Weakness Criteria: Per CFR Subpart F, the audit, data collection form, and the reporting package must be submitted within 30 calendar days after receipt of report, or nine months after the end of the audit period. Condition: The report for the year ended December 31, 2024, was not filed within the required report submission period. Cause: This condition can be attributed to the extensive turnover in the Clinic’s administrative positions which included the Senior Accountant. Financial statements did not receive sufficient attention to be completed and submitted to the independent auditor in time to meet the reporting deadline. Effect or Potential Effect: Tardiness in financial reporting prevents management from identifying and addressing errors and issues in a timely manner. Late submission of reports to the Clearinghouse prevents the organization from maintaining compliance with OMB guidelines. Questioned Costs: None Repeat Finding: The finding is a repeat finding (see prior year finding number 2023-004). Recommendation: The Organization must give higher priority to its financial reporting cycle to avoid obvious challenges. Views of Responsible Officials: Management agrees with the finding.

Assistance Listing Numbers 93.224 Community Health Centers Grant Number H80CS00112 US Department of Health and Human Services Finding 2024-005 Compliance Requirement: Auditee Responsibility Type of Finding: Material Weakness Criteria: The Uniform Guidance requires that auditees must identify in its accounts all federal awards received and expended, as well as the federal programs under which they were received and the period under which they were expended. Condition: The Schedule of Federal Awards (SEFA) prepared for the audit did not include pass through funds received from the State of Minnesota. Also, The SEFA for the current year contains expenditures of the prior period (COVID-19) which should have been included on the prior year SEFA. Cause: The Organization’s staff does not have adequate training on single audit guidelines and federal grant management. The Grants Manager was unaware of the need to report federal funding received from pass through sources. Effect or Potential Effect: Noncompliance with grant requirements may occur if funds have not been accurately identified and reported within their period of expenditure. Questioned Costs: None Repeat Finding: No Recommendation: The Organization’s staff should obtain additional training on single audit guidelines and federal grant management. Views of Responsible Officials: Management agrees with the finding and recommendation and will commit to providing additional training opportunities to those responsible for the management of federal funding.

Assistance Listing Numbers 93.224 Community Health Centers Grant Number H80CS00112 US Department of Health and Human Services Finding 2024-006 Compliance Requirement: Special Tests and Provisions-Sliding Fee Discounts Type of Finding: Significant Deficiency Criteria: Health centers are required to adjust the amounts owed for health center services based of the patient’s ability to pay and their eligibility. A patient’s eligibility to pay is determined on the basis of the official poverty guidelines. Condition: Of the twenty-five patients selected for testing the Federal Poverty Guideline (FPG) was inaccurately applied for two patients. Cause: The condition can be attributed to turnover in patient management personnel which resulted in the use of an outdated Sliding Fee Table. Effect or Potential Effect: Two patients received discounts greater than the amount they were eligible to receive. Questioned Costs: None Repeat Finding: The is not a repeat finding. Recommendation: The Organization should be implementing and monitoring procedures to ensure that information used to determine sliding fee is based on guidelines that are current. Views of Responsible Officials: Management agrees with the finding.