Audit 386275

Finding Number 2024-004 – Inaccurate Schedule of Expenditures of Federal Awards Criteria Entities that receive federal grants or programs are required to know the source of all grants and awards as the requirements of the U.S. Office of Management and Budget’s (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Rule (Uniform Guidance). Entities must be able to document the key components of the schedule of expenditures of federal awards. Condition The schedule of expenditures of federal awards provided by management was incomplete. It did not include all federal grants expended during the fiscal year.Context Management has all the information to complete the schedule of expenditures of federal awards in compliance with the Uniform Guidance but had inaccuracies discovered during audit procedures. Federal expenditures of $97,080 were excluded from the schedule but were determined to have been reported as spent during the fiscal year. An additional $51,388 was incorrectly reported as federal expenditures that was for state funding. There were also $1,072,724 in federal expenditures reported under an incorrect CFDA number within the Health Center Cluster. Cause In most cases, the grants were properly recorded in the financial statements but the portion that was federal was not clearly identified on the schedule of expenditures of federal awards. Effect The audit firm assisted with compiling all the necessary information to ensure the schedule of expenditures of federal awards was complete and accurate. In addition, if the error in federal awards had not been discovered, the result could have been inaccurate reporting of federal expenditures. Recommendation We recommend management review all grant agreements and correspondence from grantors to ensure the proper CFDA number and amount considered federal is included on the schedule of expenditures of federal awards. Management’s Response Management will prepare the schedule of expenditures of federal awards as part of the year end closing process each year to determine their audit requirements under the Uniform Guidance and provide the schedule and all backup used to prepare it to the audit firm during the financial audit process.

Finding Number 2024-005 – Ineffective Internal Controls over Sliding Fee Revenues Federal Program Name Health Center Program Project NO. H80CS00680-21-00, H80CS00680-22-00 CFDA # 93.224/93.527 Federal Agency Department of Health and Human Services Criteria The Corporation is responsible for establishing and maintaining an internal control system over sliding fee and clinic service eligibility requirements. Specifically, 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 as follows: • Sliding fee discounts are applied to fees for health center services provided to all individuals and families with annual incomes at or below 200 percent of the Federal Poverty Guidelines (FPG); • A full discount is applied to fees for health center services provided to individuals and families with annual incomes at or below 100 percent of the FPG, or the health center applies only a nominal charge; • Fees for health center services are discounted based on graduations in family size and income for individuals and families with incomes above 100 and at or below 200 percent of the FPG; and • No sliding fee discount is applied to fees for health center services provided to individuals and families within 200 percent or more of the FPG. Condition During the compliance testing of the Uniform Guidance “Special Tests and Provisions – Sliding Fee Applications” requirements, we noted the following exception: • One (1) out of thirteen (13) sampled had an expired application but the system continued to apply the slide fee discount. Questioned Costs: Not applicable. Context The population of patients receiving slide adjustments is approximately 75 patients, 130 encounters and gross charges of approximately $17,000. The sample size represented 13 encounters $2,455 in charges of which 1 encounter ($102 in charges) was found to have compliance issues noted above. Cause The billing system continues to apply the discount until manually changed. The staff missed removing the discount when a new application was not provided by the patient. Effect Lack of effective internal control procedures could result in unintentional or intentional errors that may not be detected in a timely manner by employees in the normal course of performing their assigned duties. Recommendation Management should take steps to ensure procedures over sliding fee applications are properly designed and operating effectively. Management’s Response Management agrees with the finding. The charge in the system outlined above had not yet been paid so management removed the slide discount to show full charges due by the patient.