Item 2025-001 - Procurement, Suspension and Debarment - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Recipients and subrecipients are subject to the procurement, suspension and debarment regulations implementing Executive Orders 12549 and 12689, as well as 2 CFR part 180. The regulations in 2 CFR part 180 restrict making Federal awards, subawards, and contracts with certain parties that are debarred, suspended, or otherwise excluded from receiving or participating in Federal awards. The U.S. Department of Health and Human Services (HHS) Grants Policy Statement indicates that charges made to HHS grants for the salary of individuals who have been debarred, suspended or declared ineligible or who have been voluntarily excluded from covered transactions are unallowable. Statement of Condition: During our audit, we noted that there is no evidence that any exclusion search was conducted in 2025 for all sample employees tested. Cause: LBUCC did not have a policy in place to perform exclusion searches for employees whose salaries are being charged to HHS grants. Effect: Failure in conducting exclusion searches raises the risk that salaries of employees who are suspended or debarred may be charged to federally-funded programs. Questioned Costs: None Context: Although LBUCC did not conduct exclusion searches in 2025, none of the sixty samples tested were found to be suspended or debarred. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC develop and implement a formal exclusion search policy for employees whose salaries are charged to HHS grants to ensure compliance with federal and state regulations. The policy should include documentation procedures and procedures for investigating and resolving any exceptions found during the search. Management Response: Management agrees with the finding and will develop and implement a screening policy to mitigate the risk of charging the salaries of excluded individuals to HHS grants.
Item 2025-002 - Special Tests and Provisions - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: US Code Title 42, The Public Health and Welfare Act, Section 254b requires health centers to prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted or discounted based on the patient's ability to pay. LBUCC’s policy requires that sliding fee discount be modified on an annual basis based on the federal poverty level after the board's approval. Statement of Condition: During our audit, we noted that LBUCC did not properly determine the sliding fee discount provided to certain eligible patients based on information provided during the patient registration process. Additionally, we could not ascertain if the sliding fee discount provided to certain eligible patients were correct as LBUCC did not maintain documentation of the proof of income of those eligible patients. Cause: Lack of proper documentation of eligibility requirements and lack of review process for the determination of sliding fee discount for eligible patients. Effect: Failure to properly apply the sliding fee discount resulted in certain patients being charged incorrect amounts. Questioned Costs: None Context: Out of sixty samples tested, one sample’s family income was incorrectly encoded to the system which resulted in the patient being improperly slid and nine patients had no proof of income on file. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC conduct training of all of its personnel who are involved in determining and applying the sliding fee scale of patients. We also recommend LBUCC to maintain complete and auditable documentation supporting each patient’s eligibility for sliding fee discount. Management Response: Management agrees with the finding and will implement these measures to ensure equitable access to care, maintain compliance with federal program standards and support accurate reporting and reimbursement
Item 2025-003 - Period of Performance - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Per the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200), specifically §200.77 and §200.309, costs must be incurred during the period of performance stated in the federal award. The HRSA Notice of Award for Section 330 grants also explicitly defines the budget period and restricts reimbursement to allowable costs incurred within the said timeframe. Statement of Condition: During our audit, we noted that LBUCC drew down $190,688 of federal grant funds under the Section 330 program for the budget period beginning June 1, 2024 to reimburse salary expenses incurred in May 2024. Cause: LBUCC did not have adequate controls in place to ensure that expenses reimbursed under the Section 330 grant aligned with the grant’s defined period of performance, which resulted in salary costs incurred prior to the start of the budget period to be improperly included in the drawdown request. Effect: Failure to draw funds for eligible expenses incurred within the period of performance expose LBUCC to potential repayment obligations or restrictions on future grant funding. Questioned Costs: None. Although LBUCC drew down $190,688 of salaries incurred in May 2024 from the budget period that began on June 1, 2024, LBUCC still had more than $190,688 worth of salaries of employees who worked on the Health Center Program Cluster but have not been charged to the Health Center Program Cluster. Since LBUCC is able to replace the May 2024 salaries with salaries that were incurred within the program period we do not deem that there is any questioned cost in relation to this finding. Context: There are 67 employees whose salaries were incurred in May 2024 and charged to the budget period that began June 1, 2024. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement procedures to ensure that all drawdowns are supported by expenses incurred strictly within the grant’s approved period of performance and train staff on grant compliance requirements. Management Response: Management agrees with the finding and will implement these measures to strengthen their grant management practices and to prevent future noncompliance.
Item 2025-004 - Reporting - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Significant Deficiency) Criteria: In accordance with 2 CFR § 200.327 and the terms and conditions of the federal award, LBUCC is required to submit accurate and timely Federal Financial Reports (SF-425) that reflect cumulative expenditures, unobligated balances, and program income. These reports must align with the underlying accounting records and be supported by documentation evidencing management's review and approval prior to submission. Statement of Condition: LBUCC did not maintain documentation evidencing management's review of the Federal Financial Report (SF-425) prior to submission. Although the reports were submitted timely, there were no indication of formal review procedures to validate the accuracy, completeness, or consistency of reported financial data with the accounting records. Cause: Lack of policies and procedures in relation to the review of the Federal Financial Report by a knowledgeable individual who is not the preparer thereof. Effect: In the absence of documented review, there is an increased risk of inaccurate financial reporting, which could lead to misstated expenditures and noncompliance with federal reporting requirements. Questioned Costs: None Context: All four annual Federal Financial Report (SF-425) tested had no evidence of review prior to submission. However, there was adequate support for the reports and the reports agreed to the underlying records. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC establish and implement a formal review process over the Federal Financial Report (SF-425); we also recommend that evidence of the review be documented and approval be kept on file. Management Response: Management agrees with the finding and will be implementing formal review procedures including documented evidence of review and approval prior to submission.
Item 2025-005 - Activities Allowed and Unallowed Costs - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Material Weakness) Criteria: Per 2 CFR §200.430(i) - Standards for Documentation of Personnel Expenses, charges to federal awards for salaries and wages must be based on records that accurately reflect the work performed. These records must be supported by a system of internal control which provides reasonable assurance that the charges are accurate, allowable, and properly allocated, reflect actual time worked on specific federal programs and be incorporated into the official records of the non-federal entity. Statement of Condition: During our audit, we noted that LBUCC charged salaries to the Section 330 grant based on pre-determined allocations or budget rather than actual hours worked. LBUCC utilized timesheets that reflect the allocations as its time and effort documentation. Cause: LBUCC has not implemented a time and effort reporting system that captures actual hours worked on federal programs. Effect: Failure to maintain and monitor time and effort based on actual hours worked may lead to disallowed costs. Questioned Costs: None. Although salaries charged were based on allocations or budget, we determined that only one employee was charged to two grant-funded programs during one pay period. All other employees’ salaries were charged to one grant-funded program for each pay period during the year. For the employee whose salary was charged to more than one grant-funded program, we verified that the total of the employee’s salaries charged to each grant-funded program did not exceed 100% of her total salaries for the pay period. Context: LBUCC’s management meets monthly to discuss if the budgeted or allocated salaries per program for the month was reflective of actual hours worked. During this discussion, management ascertains if there is a need to adjust the budgeted or allocated salaries. However, this discussion and the approval of the final budget or salaries is not documented. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement a time and effort reporting system that tracks actual hours worked on each program or grant. We recommend that they require supervisors to review and approve the actual time spent on grant activities and that such review and approval be documented. Management Response: Management agrees with the finding and will implement these steps to ensure compliance with the federal cost principles, strengthen internal controls, and reduce the risk of questioned costs.
Item 2025-006 - Special Tests and Provisions - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Significant Deficiency) Criteria: Per 2 CFR §200.303(d), non-Federal entities must take prompt action when instances of noncompliance are identified, including those found in audits and monitoring reviews. Entities are also required to establish and maintain effective internal control over federal awards, including monitoring and corrective action systems. Statement of Condition: During our audit, we noted that LBUCC conducted quarterly internal audit reviews of fifty (50) samples self-pay patients to review for sliding fee discount determination. However, we noted that the findings or exceptions identified in the quarterly internal audit review remained uncorrected. Cause: LBUCC did not have a formal tracking and follow-up procedure to ensure that internal audit findings are remediated in a timely and effective manner. Effect: Lack of procedures to track and follow up the remediation of detected errors increases the risk that errors may persist and may lead to noncompliance and/or financial reporting errors. Questioned Costs: None Context: LBUCC’s Operating Data Analyst haphazardly selects 50 samples from the sliding fee visits each quarter, inspects the supporting documentations and reviews the annual income calculation and sliding fee determination. The Operating Data Analyst noted 16 and 25 exceptions during the 3rd and 4th quarter internal reviews and none of these exceptions were communicated to the respective department and therefore all exceptions remained uncorrected. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC establish a process for communicating, investigating and correcting all internal audit findings or exceptions on a timely manner. Additionally, we recommend that management identify the potential cause of such findings or exceptions and that necessary corrective actions be taken to address such cause. For example, LBUCC may conduct periodic training of all employees involved in the patient intake and screening process. Management Response: Management agrees with the finding and will implement these steps to strengthen our internal controls particularly the monitoring component as this is essential for sustaining compliance
Item 2025-007 - Cash Management - U.S. Department of Health and Human Services, Health Center Program Cluster (Assistance Listing Number 93.224/93.527) Notice of Award Number 6 H80CS00505-23-04, 6 H2ECS45602-02-04, 1 H8LCS50772-01-00 and 6 H8HCS46163-03-01 - (Significant Deficiency) Criteria: Non-federal entities other than states are required to have internal controls in place to ensure compliance with the requirements of cash management that are contained in 2 CFR sections 200.302(b)(6) and 200,305, 31 CFR Part 205, 48 CFR sections 52.216-7(b) and 52.232-12. Statement of Condition: During our audit, we noted that there is no evidence of review and approval of drawdowns from the Health Center Program Cluster and the supporting records. Cause: LBUCC does not have a policy in place requiring the review and approval of drawdowns from the Health Center Program Cluster to be documented. Effect: Failure to document review and approval of drawdowns may result in unauthorized or incorrect drawdowns from the Health Center Program Cluster. Questioned Costs: None. Context: Although there is no evidence of review and approval of the drawdowns, the amounts of all 8 sample drawdowns tested agreed to the underlying records and supporting documents. Identification as a Repeat Finding: This is not a repeat finding. Recommendation: We recommend that LBUCC implement a policy that requires all drawdowns and supporting documents to be reviewed and that such review and approval be documented. Management Response: Management agrees with the finding and will implement these steps to ensure compliance with the federal cost principles, strengthen internal controls, and reduce the risk of questioned costs.