Assistance Listing, Federal Agency, and Program Name - 93.224, U.S. Department of Health and Human Services, Health Center Program, COVID-19 Health Center Program; 93.527, U.S. Department of Health and Human Services, COVID-19 Grants to New and Expanded Services Under the Health Center Program Federal Award Identification Number and Year - H80CS24134, 2020; H8FCS40356, 2021; H8GCS48255, 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-004 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In accordance with 42 CFR Section 51c 303(f), 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. Condition - The Organization lacked sufficient internal controls to ensure sliding fee discount applications were on file and included all of the necessary information regarding family size and income to support discount determinations made. Further, controls were not sufficient to ensure the correct sliding fee discount was applied. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During testing of 60 patients for compliance with special tests and provisions for sliding fee discounts, we noted 14 instances where the patient was undercharged for dental services, resulting in the program being overcharged. In addition, we noted 4 instances where patients were provided a sliding fee discount without an application on file or with key information for determining the discount, such as family size or income, missing from the application. Finally, we noted 4 patients who were overcharged for medical services provided based on family size and family income compared to the SFDS. Cause and Effect - An appropriate review of sliding fee applications and adjustments was not completed to ensure valid applications were maintained and the correct adjustment was applied. As a result, not all patients received the correct adjustment, and thus, the Organization did not comply with the related compliance requirement. Recommendation - We recommend the Organization implement controls, including levels of review, to ensure sliding fee applications are maintained and sliding fee adjustments are accurate based on correct family income and size. Views of Responsible Officials and Planned Corrective Actions - The Organization will implement controls to ensure sliding fee applications are maintained and sliding fee adjustments are based on correct family income and size.
Assistance Listing, Federal Agency, and Program Name - 93.224, U.S. Department of Health and Human Services, Health Center Program, COVID-19 Health Center Program; 93.527, U.S. Department of Health and Human Services, COVID-19 Grants to New and Expanded Services Under the Health Center Program Federal Award Identification Number and Year - H80CS24134, 2020; H8FCS40356, 2021; H8GCS48255, 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-005 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In accordance with the declaration and certification made to the U.S. Department of Health and Human Services at the time of drawdown and the Organization's internal policy, the Organization must either: a) (reimbursement method) ensure the request is accurate and complete, all obligations, expenditures, and cash receipts are supported by the requisite accounting records, and all costs included in the requisition are reasonable, allowable, and allocable to the award, or b) (advance method) disburse funds for costs that are reasonable, allowable, and allocable to the award within three business days or immediately return the funds. Condition - The Organization maintains and tracks Federal expenditures incurred for the year in totality; however, it does not maintain adequate records to track the costs applied to each individual drawdown made throughout the year. Without this linkage, the timeliness between drawdown and either when the expenditures for goods or services were incurred or when the disbursement occurred in relation to the drawdown cannot be validated. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - During cash management testing, supporting documentation to identify the costs applied to each drawdown was not maintained for 4 samples tested. During allowability testing, none of the payroll costs for 9 individuals charged to the grant nor the 10 nonpayroll transactions tested could be traced to a specific drawdown to validate that the cost was incurred prior to the date of reimbursement or paid within 3 days of advanced funding. However, in total for the year, the Organization was able to support the draws received with a detailed listing of Federal expenditures as reported on the SEFA. Cause and Effect - Insufficient controls are in place over cash management. As a result, cash drawdowns were made throughout the year with no linkage to specific Federal expenditures, and thus, the Organization cannot demonstrate compliance with Federal payment requirements, as certified to the funding agency. Recommendation - We recommend the Organization implement a set of internal controls over cash management, including layers of review, to ensure supporting documentation can be linked to Federal expenditures. Views of Responsible Officials and Planned Corrective Actions - The Organization will implement controls, including layers of review, to ensure supporting documentation to link Federal expenditures to each drawdown is maintained and the timely disbursement of funds received.
Assistance Listing, Federal Agency, and Program Name - 93.224, U.S. Department of Health and Human Services, Health Center Program, COVID-19 Health Center Program; 93.527, U.S. Department of Health and Human Services, COVID-19 Grants to New and Expanded Services Under the Health Center Program Federal Award Identification Number and Year - H80CS24134, 2020; H8FCS40356, 2021; H8GCS48255, 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - Yes 2022-008 Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In accordance with notice of awards and the Uniform Data System Health Center Data Reporting Requirements, the health center is required to submit an annual performance report that includes data that reflects all activities in the HRSA health center project. The Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services requires the grantee to submit Federal financial reports with a complete and accurate reporting of cash received, disbursed, total funds authorized, the Federal share expended, and program income earned under the program for period reported. Condition - A lack of effectively designed and implemented internal controls over the accounting records resulted in material entries identified and recorded during the 2023 financial statement audit of the Organization. Additionally, as the result of a lack of effectively designed and implemented controls over financial and performance reporting for the Health Center Program cluster grants, inaccurate performance data and Federal share of expenditures were submitted to HRSA. Questioned Costs - None If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - N/A Context - In gaining an understanding of management's processes and controls over financial and performance reporting, there was no evidence of a review to ensure required financial reports were prepared in accordance with the applicable accounting basis and supported by underlying records. In addition, there was no evidence of a review to ensure performance data was accumulated and summarized in accordance with the required methodology and agreed to underlying records. Cause and Effect - The Organization did not have controls in place to ensure that the preparation of account reconciliation occurred appropriately in a timely manner (see Finding 2023-001 for entries identified). In addition, subsequent to starting our audit procedures, the Organization provided us with a significant amount of adjusting journal entries. The entries provided by the Organization subsequent to the commencement of the audit impacted several balance sheet accounts impact to decrease the change in net assets without donor restrictions as summarized in finding 2023-001. As a result, the reports filed with HRSA were materially incorrect, and therefore the Organization did not comply with performance reporting requirements. Additionally, within the two Federal Financial Reports (FFRs) tested, we noted that the Federal share of expenditures reflected Federal cash reimbursement received rather than expenditures incurred during the period under audit. As a result one financial report was understated by approximately $3,070,000 and the other financial report was overstated by approximately $50,000. Recommendation - We recommend that controls be put in place to prepare and review accurate reconciliation with supporting information over all accounting cycles in a timely fashion. Views of Responsible Officials and Planned Corrective Actions - Management agrees with the finding and is evaluating options to implement a timely reconciliation process.
Assistance Listing, Federal Agency, and Program Name - 93.224, U.S. Department of Health and Human Services, Health Center Program, COVID-19 Health Center Program; 93.527, U.S. Department of Health and Human Services, COVID-19 Grants to New and Expanded Services Under the Health Center Program Federal Award Identification Number and Year - H80CS24134, 2020; H8FCS40356, 2021; H8GCS48255, 2022 Pass through Entity - N/A Finding Type - Material weakness and material noncompliance with laws and regulations Repeat Finding - No Criteria - Per 2 CFR 200.303(a), nonfederal entities must establish and maintain effective internal controls over the Federal award that provides reasonable assurance that the nonfederal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. These internal controls should be in compliance with the guidance in Standards for Internal Control in the Federal Government, issued by the Comptroller General of the United States, or the Internal Control Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Per 2 CFR 200.430(i), charges to Federal awards for salaries and wages must be based on records that accurately reflect the work performed, where those records reasonably reflect the total activity for which the employee is compensated by the non Federal entity, not exceeding 100% of compensated activities. Condition - Due to a lack of effectively designed and implemented controls to ensure compliance with allowable cost principles, management requested reimbursement based upon employment contract agreements rather than actual payroll costs incurred for the individuals working under the grant. Questioned Costs - $192,677 If questioned costs are not determinable, description of why known questioned costs were undetermined or otherwise could not be reported - N/A Identification of How Questioned Costs Were Computed - Questioned costs represent payroll costs reimbursed by HRSA which were not supported by payroll records reflecting costs incurred during the period under audit. Context - During our understanding of management’s processes and controls over grant related expenditures, we noted the absence of formal, documented review procedures to ensure costs charged to the grant were allowable and in compliance with applicable cost principles. Additionally, in reviewing the linkage between cash drawdowns and underlying federal expenditures (as noted in 2023 005), we determined that reimbursement requests for grant H80CS24134 were based on employment agreements for 10 of 14 individuals, rather than actual payroll costs supported by payroll records for expenses incurred during the grant period. Cause and Effect - Inadequately designed and implemented internal controls over payroll transactions resulted in material noncompliance with applicable cost principles. As a result, payroll related drawdowns for the referenced grant exceeded actual payroll costs incurred by approximately $193,000. The SEFA has since been adjusted to reflect allowable payroll and non payroll federal expenditures incurred during the fiscal period. Recommendation - We recommend the Organization implement controls, including levels of review, to ensure all costs conform with cost principles under 2 CFR 200, Subpart E. Views of Responsible Officials and Planned Corrective Actions - The Organization will implement controls, including levels of review, to ensure compliance with allowable cost principles.