Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6 G28RH46259-02-01, September 1, 2023 – August 31, 2024 Award No. 6 G28RH46259-03-01, September 1, 2024 – August 31, 2025 Award No. 4 HBIRH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Allowable Costs/Cost Principles (45 CFR 75.403) Condition – Certain costs were charged to more than one federal award program in the current period. Cause – Salaries and wages are charged to federal awards through separate manual tracking worksheets for each award. Additionally, although salaries and wages are allocated to grants in the Organization’s accounting system, the allocation only occurs at a summary level, moving all costs from administrative rather than where they were recorded. Effect or potential effect – The Organization charged payroll expenditures to more than one federal award. Questioned costs – $42,988. Questioned costs were determined by identifying all employees who appeared on more than one grant expenditure listing and reviewing the specific payroll periods charged to each award for duplicates. Questioned costs by federal award identification number are: Award No. 6 G28RH46259-02-01 – $7,401 Award No. 6 G28RH46259-03-01 – $12,752 Award No. 4 HBIRH47071-03-02 – $22,835 Context – Salaries and wages for three employees of the Organization were identified as being charged to both Health Center Program Cluster base grant (Award No. 6 H80CS00703- 23-16) and one of the awards identified above. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should consolidate tracking of salaries and wages charged to federal awards into a single listing for each pay period rather than separate worksheets for each award. The Organization should support the distribution of employees’ salaries and wages amongst federal awards to accurately reflect the work performed through the timekeeping system and payroll records. Views of responsible officials and planned corrective actions – Issues identified during the audit were indicative of an overall lack of controls and processes to ensure no double dipping occurs. The new CFO along with the newer members of the Finance Department have developed better controls and processes to ensure grant expenditures, including payroll expenses and allocations, are properly accounted for in the accounting system with adequate backup of grant draw downs. With the implementation of a new payroll system and a new accounting system in 2026, these issues should resolve themselves with oversight provided by the CFO. The Organization’s CEO, a former CFO of the organization, will continue to provide oversight for the Finance Department to ensure controls and processes are implemented.
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6D0RH49283-02-01, August 1, 2024 – July 31, 2025 Award No. 6 G28RH46259-03-01, September 1, 2024 – August 31, 2025 Award No. 4 HBIRH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Cash Management (45 CFR 75.305) Condition – Grant funds were intentionally drawn down in advance of disbursements for eligible expenditures. Cause – On January 27, 2025, the Office of Management and Budget (OMB) ordered a pause to the disbursement of federal grants to take effect the following day. Due to uncertainty around how long the pause would last and the Organization’s anticipated cash flow needs, management advance drew on the Organization’s federal awards on January 28, 2025. Effect or potential effect – The Organization may earn interest on the advance drawdowns. Questioned costs – None. Context – On January 28, 2025, drawdowns were requested based on estimated salaries and wages to be charged to the grants through May 31, 2025. Once the pause ended, the Organization resumed requesting drawdowns for expenses other than salaries and wages, resulting in an extended advance draw position. By May 31, 2025, all funds previously drawn down had been obligated. The January 28, 2025, drawdowns resulted in an advance draw of $282,753. Interest earned on the advance drawdowns was less than $500. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should review its cash management policy to ensure it combines flexibility while requiring compliance. Views of responsible officials and planned corrective actions – This is a once in a lifetime occurrence based on uncertainty and the Organization’s cash position at the time. The Organization has reviewed the cash management policy to ensure it is compliant. Additionally, the Organization has taken steps to improve its cash position and do not view this as an ongoing issue.
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6 UK9RH43497-03-02, September 1, 2023 – August 31, 2024 Award No. 4 UK9RH43497-04-05, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Cash Management (45 CFR 75.305) Condition – Funds available from program income were not disbursed before the Organization requested additional drawdowns. Cause – The Organization was not appropriately with tracking and utilizing program income. Effect or potential effect – The Organization had a balance in deferred grant revenue at May 31, 2025, due to cumulative program income and drawdowns exceeding cumulative expenditures. Questioned costs – $46,093. Questioned costs was determined to be the balance in deferred grant revenue at May 31, 2025, which relates to Award No. 4 UK9RH43497-04-05. Context – The Organization began generating program income with the federal award during 2025. The Organization implemented a process of calculating program income earned consistent with its methodology for valuation of patient service revenue. Due to the complexity of the program income calculation, grant funds were drawn in advance of the completion of the calculation. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should ensure its internal controls over compliance address the disbursement of program income prior to use of grant funds and conduct training of staff involved in drawdowns of federal awards. Views of responsible officials and planned corrective actions – Issues identified during the audit were indicative of an overall lack of controls and processes due to the change in Finance department staff and loss of knowledge. As of August 2025, program income is no longer being generated by the grant. The new CFO and Finance staff have also implemented processes and controls to ensure proper tracking and utilization of program income related to grants. The CEO will provide ongoing oversight to ensure processes and controls are being adhered to by the Finance Department.
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6 UK9RH43497-03-02, September 1, 2023 – August 31, 2024 Award No. 6 UK9RH43497-04-05, September 1, 2024 – August 31, 2025 Award No. 6 HB1RH47071-02-02, September 30, 2023 – August 31, 2024 Award No. 4 HB1RH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Procurement (45 CFR 75.329) Condition – Procurement records were not maintained according to Uniform Guidance. Questioned costs – Unknown Context – A sample of three procurements totaling $365,941 were tested out of a population of 21 procurements. Samples were not, and were not intended to be, statistically valid. For the three vendors tested, the Organization’s procurement records were insufficient in accordance with the requirements of the Organization’s procurement policy and Uniform Guidance. Effect – Purchases of goods or services were made that may not have been obtained in the most effective manner or in compliance with Uniform Guidance requirements. Cause – The Organization did not comply with its procurement policy. Identification as a repeat finding, if applicable – See Finding 2024-005. Recommendation – The Organization should develop a process for maintaining documentation required by its procurement policy. Views of responsible officials and planned corrective actions – Issues identified during the audit were indicative of an overall lack of controls and processes due to the change in Finance Department staff and loss of knowledge. Based on the finding, a review and training for the Organization on procurement has been implemented. Additionally, with the new CFO and Finance staff, additional controls and processes to prevent this from occurring again. The Organization’s CEO, a former CFO of the organization, will continue to provide oversight for the Finance Department to ensure controls and processes are implemented.
Rural Healthcare Services Programs Assistance Listing Number 93.912 U.S. Department of Health and Human Services Award No. 6 HB1RH47071-02-02, September 30, 2023 – August 31, 2024 Award No. 4 HB1RH47071-03-02, September 1, 2024 – August 31, 2026 Criteria or specific requirement – Eligibility Condition – Medication assistance was provided to a patient who was not eligible to receive assistance on the date of service due to active insurance coverage for the prescription. Questioned costs – $2,079. Questioned costs were determined to be the actual amount the Organization paid in medication assistance benefits. Context – A sample of 25 medication assistance benefits totaling $7,622 was tested from a population of 707 instances of medication assistance totaling $344,631 during the fiscal year. Samples were not, and were not intended to be, statistically valid. For one instance of medication assistance in the sample, medication assistance benefits of $2,079 were provided for a patient and prescription who did not meet the eligibility requirements at the time assistance was provided. Effect – Medication assistance benefits was provided for a prescription allowed under the patient’s insurance benefits. Cause – The Organization’s eligibility procedures are not supported by a formal policy or consistently followed as written. Additionally, the Procedure for Medication Financial Assistance provides Community Health Workers and other staff significant discretion in making eligibility determinations. This flexibility and subjective process, while intended to reduce barriers to patients obtaining opioid use disorder treatments, increases the risk for inconsistent and inappropriate eligibility determinations. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – The Organization should implement a formal policy for medication assistance eligibility determinations. The formal policy should clearly identify grant requirements, such as the grant being the payor-of-last-resort, from operational preferences and require a secondary review of all eligibility determinations. Views of responsible officials and planned corrective actions – Issues identified during the audit were indicative of an overall lack of controls and processes by grant directors and Finance Department staff. The Organization has reviewed the processes and has developed a formalized policy for medication assistance eligibility determinations, clearly identifying grant requirements for eligibility. Additionally, the procedure associated with the policy identifies the need for secondary review of eligibility determinations and clear communication to the Finance Department along with adequate record keeping. The Organization’s CEO, a former CFO of the organization, will continue to provide oversight for the Finance Department to ensure controls and processes are implemented.