Audit 383596

Federal Award Agency: U.S. Department of Health and Human Services Federal Awards: 93.224 / 93.527 – Health Center Program Cluster, 93.566 - Refugee and Entrant Assistance State/Replacement Designee Administered Programs, and 93.526 – Grants for Capital Development in Health Centers Criteria: The auditee must prepare a Schedule of Expenditures of Federal Awards (SEFA) that accurately presents total federal expenditures for each program, including information on pass-through awards and subrecipients. This is required by the Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR Part 200, §200.510(b)). Condition: During the audit of the auditee's SEFA for the year ended December 31, 2022, we noted discrepancies related to incorrect identification of Assistance Listing Numbers for certain grants, as well as difficulty providing initial supporting detail for balances of expenditures for certain Federal programs. Effect: The inaccurate SEFA presented an unreliable representation of the auditee's federal expenditures to external stakeholders, including the federal awarding agency and any pass-through entities. This condition could lead to: • Increased scrutiny from grantors. • Inaccurate information being submitted to the Federal Audit Clearinghouse. • The potential misallocation or mismanagement of federal funds. • An opinion modification on the SEFA from the independent auditor, particularly regarding its presentation in relation to the financial statements. Cause: The auditee lacks sufficient internal controls over the preparation and review of the SEFA. Specifically, there is no established process to reconcile federal expenditures reported on the SEFA to the auditee's underlying accounting records. A formal review process involving an individual independent of the preparation was not conducted to ensure the SEFA was complete and accurate before submission to the auditors. Recommendation: We recommend the auditee implement the following corrective actions: • Establish and document a formal, multi-level review process for the SEFA before it is submitted for audit. • Require that a staff member independent of the SEFA's preparation perform a detailed reconciliation of the SEFA's data to the general ledger and supporting grant documents. • Enhance internal controls to ensure all federal awards are properly identified, logged, and included on the SEFA, including all required details such as the ALN, pass-through entity, and subrecipient information. • Train relevant staff on the requirements for accurate SEFA preparation, including the required notes and the importance of using the correct ALN. Repeat finding?: No Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None

Federal Award Agency: U.S. Department of Health and Human Services Federal Awards: 93.224 / 93.527 – Health Center Program Cluster, 93.566 - Refugee and Entrant Assistance State/Replacement Designee Administered Programs, and 93.526 – Grants for Capital Development in Health Centers Criteria: Under 45 CFR Part 75.512, the Uniform Guidance requires that audited consolidated financial statements and related data collection form are submitted by the earlier of 30 calendar days after receipt of the auditor’s report or nine months after the end of the audit period. Condition: The audit of the Organization for the year ended December 31, 2022, had a submission deadline of September 30, 2023. The Organization did not complete and submit their audit for the year ended December 31, 2022, to the federal clearinghouse until January 2026. Cause: Significant delays stemming from Finding 2022-001 caused the required audit procedures and the ultimate completion date to extend beyond the regulatory deadline. Effect: The late filing could potentially delay the ability of the federal government to monitor the Organization. Context: No monetary value or effect on population as the condition relates to the late filing of the audit report. Repeat finding: No. Recommendation: We recommend that management implement procedures and controls as described in Finding 2022-001 to ensure future audits are completed timely. Views of responsible officials and planned corrective actions: Management agrees with the finding. See corrective action plan. Reportable questioned costs: None

Federal Award Agency: U.S. Department of Health and Human Services Federal awards: 93.224 / 93.527 – Health Center Program Cluster Criteria: Under this selected program, eligible individuals receive a sliding fee discount on amounts owed for health center services based on family size and income levels in comparison to the federal poverty guidelines. The Organization should maintain records providing evidence that the patients included under this program are eligible. Condition: During the compliance testing of 44 sample items, there was two instances where the Organization applied a sliding fee discount to a patient who had not submitted any documents regarding their income level or family size and we could not determine whether the patient should have been included as a sliding fee patient, and one instance where the patient had properly submitted their forms, but the Organization applied the incorrect sliding fee rate. Effect: Currently, there is no known monetary impact, improper expenditure of funds or questioned costs identified. However, if the Organization does not strengthen the internal controls in regard to the eligibility determination process, there is a possible effect on the ability of the Organization to obtain additional funding under this program if ineligible patients are being treated with grant funding. Cause: There is a lack of review in regard to obtaining, retaining and approving documentation that support individual's eligibility for the program. Recommendation: We recommend that the Organization review policies, procedures and practices in place over the controls related to obtaining, retaining and reviewing proof of income support for patients. Repeat Finding: No. Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None

Federal Award Agency: U.S. Department of Health and Human Services Federal awards: 93.224 / 93.527 – Health Center Program Cluster Criteria: Under this selected program, the Organization must conduct all procurement transactions in a manner providing full and open competition in accordance with federal regulations. Condition: During the compliance testing, we identified that the Organization does have an internal procurement policy in accordance with the federal regulations, however, there appears to be a lack of controls around the documentation of following the existing procurement policies in place for all the Organization’s purchases in 2022 with federal funds. Effect: Currently, there is no known monetary impact, improper expenditure of funds or questioned costs identified. However, if the Organization does not strengthen the internal controls in regard to their procurement policy, there is a possible effect on the ability of the Organization to obtain additional funding under this program if they are not following the federal regulations when it comes to procurement policies. Cause: There is a lack of review in regard to obtaining, retaining and approving documentation that support the fact that the Organization is consistently following their internal procurement policies. Recommendation: We recommend that the Organization review policies, procedures and practices in place over the controls related to obtaining, retaining and reviewing proof of price or rate quotations from an adequate number of qualified sources. Repeat Finding: No. Views of responsible officials and planned corrective actions: See attached letter. Reportable questioned costs: None