Criteria: 2 CFR §200.327 and §200.328 requires recipients of federal awards to submit accurate and timely financial reports as required by the terms and conditions of the award. The Federal Financial Report (FFR) must be submitted by the due date specified in the grant agreement and must reflect accurate financial data. Condition and Context: During our audit of the Community Health Centers Cluster, we noted the entity failed to submit the required FFRs by the established deadlines for two annual reports. Additionally, two submitted reports contained inaccuracies, including expenditures that did not agree to amounts reported on the 2024 Schedule of Expenditures of Federal Awards and/or underlying supporting financial records. In one instance the report was filed 107 days late. In the second instance the report was filed 33 days late. Since this is a repeat finding, this is considered to not be an isolated instance and appears to be more indicative of a systemic problem. Effect: Failure to submit timely and accurate financial reports may result in noncompliance with federal regulations, potential withholding of future funding, and increased risk of questioned costs or audit findings. Cause: The delays and inaccuracies were attributed to inadequate internal controls over the financial reporting process, including lack of review procedures and insufficient training of staff responsible for preparing the reports. Recommendation: We recommend the entity strengthen its internal controls over the financial reporting process by implementing formal review procedures, providing staff training on federal reporting requirements, and establishing a calendar system to ensure timely submissions.
Criteria: This award requires that health centers provide sliding fee discounts for services provided based on the patient’s ability to pay, in accordance with the Center’s sliding fee policy. The patient’s ability to pay is based on the type of services provided, patient’s annual income, and household size, in accordance with the Center’s sliding fee policy. Condition and Context: During our audit of a sample of 40 patients who received sliding fee adjustments, we noted the following: • For 4 of 40 patients tested, the fee charged for the service(s) provided did not agree to the fee schedule. It is further noted that this would not have had any bearing on the correct slide being charged. However, charging an incorrect fee could lead to an incorrect amount being written off as a sliding fee adjustment. • For 1 of 40 patients tested, documentation noted that the patient originally self-declared no income but then was seen for multiple visits thereafter with no income verification. Ultimately no slide was applied and the entire balance was written off. Per the Center’s policy, a patient may only self-declare income once. Future visits should have required income verification to determine the proper discount to apply. • For 1 of 40 patients tested, the income support provided supports a higher annual income than what was calculated on the application. As a result, the patient should not have qualified for a sliding fee discount based on the behavioral health sliding fee scale. While the correct sliding fee discount was charged based on the annual income as noted on the application, the error in annual income calculation did not support the patient being eligible for any sliding fee discount. Effect: While there are no material questioned costs associated with these findings, the effect of the breakdown in internal controls over the sliding fee application process allows for potential noncompliance related to the use of federal funds. Cause: The cause of these findings was due to insufficient review and oversight of the sliding fee application process. Recommendation: We recommend the entity strengthen its internal controls over the sliding fee application and administration process, to include further training of individuals with responsibility for approving sliding fee applications, and enhanced oversight by an independent person to ensure the correct fees are charged for services provided, and the income verification supports the correct sliding fee discount based on the sliding fee scales in effect at time of service. We further recommend enhancements to internal controls to ensure that patients who self-declare no income are providing income verification at subsequent visits.
Criteria: In accordance with 2 CFR §180 and §200.214, non-federal entities are prohibited from entering into covered transactions with parties that are suspended, debarred, or otherwise excluded from participation in federal programs. Entities must verify that contractors and subcontractors are not excluded by checking the System for Award Management (SAM.gov) prior to awarding contracts funded by federal awards. Condition and Context: During our audit of procurement activities under the Health Center Infrastructure Support federal award, we identified multiple instances where the entity failed to verify the suspension and debarment status of vendors prior to awarding contracts exceeding the $25,000 threshold. Documentation of verification through SAM.gov or equivalent methods was not available for these transactions. Subsequent review of SAM.gov indicated no instances of suspended or debarred vendors being used on the project funded with federal awards. Effect: Failure to verify vendor eligibility increases the risk of awarding federal funds to ineligible parties, which may result in questioned costs, reputational harm, and potential disallowance of expenditures by the federal awarding agency. Cause: While the Center’s formal policies dictate that procedures will be followed to ensure the above criteria are met, staff responsible for procurement were unaware of the verification requirement or did not consistently apply it. Recommendation: We recommend the entity ensure that staff involved with procuring contracts using federal awards are aware of the federal requirement, including the already-established policies that the Center has regarding such requirements. Staff involved in procurement should receive training on federal suspension and debarment requirements to ensure consistent compliance.