Audit 407018

Allowable Costs and Activities Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Number: 93.224 Federal Award Identification Numbers and Year: 6 H80CS29010; 6 H80CS29011 Award Period: June 1, 2024 – May 31, 2025; June 1, 2025 – May 31, 2026 Criteria or Specific Requirement: 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; reasonably reflect the total activity for which the employee is compensated by the non-federal entity, not exceeding 100% of compensated activities; and support the distribution of the employee's salary or wages among specific activities or cost objectives if the employee works on more than one federal award (2 CFR 200.430(i)(1)). Condition: Payroll costs for employees allocated to the grant at less than 100% were based on budgeted or estimated allocation percentages that varied by period; however, the Organization was unable to provide contemporaneous, after-the-fact documentation to support the actual distribution of effort for payroll transactions selected for testing (other than December 2025). Management maintains a dynamic allocation file that is updated monthly and does not retain historical, point-in-time versions of allocation support, resulting in a lack of auditable documentation to support payroll allocations to the program. Questioned Costs: $49,307 Context: Twenty-two (22) of forty (40) transactions selected for testing, related to payroll costs for employees allocated at less than 100% across multiple grants, based on budgeted percentages. Cause: The Organization has not implemented a formal process to retain contemporaneous time and effort documentation or point-in-time allocation records to support payroll costs charged to federal awards. Instead, management relies on a continuously updated allocation worksheet that is not version-controlled or archived, resulting in the inability to reconstruct actual effort allocations for prior periods. Effect: As a result, payroll costs charged to the grant may not be supported by records that accurately reflect the actual work performed, increasing the risk that allowable costs are misstated and not in compliance with 2 CFR 200.430. Repeat Finding: No Recommendation: Management should implement a formal time and effort reporting process that ensures payroll costs charged to federal awards are supported by contemporaneous documentation of actual work performed, requires retention of historical, point-in-time allocation records for each payroll period (e.g., version-controlled or archived reports), and includes a documented review and approval process that compares allocation percentages to employee attestations or activity reports to validate the reasonableness and accuracy of costs charged to the grant. Views of Responsible Officials: There is no disagreement with this finding.

Special Provisions Federal Agency: U.S. Department of Health and Human Services Federal Program Title: Health Center Program Cluster Assistance Listing Number: 93.224 Federal Award Identification Numbers and Year: 6 H80CS29010; 6 H80CS29011 Award Period: June 1, 2024 – May 31, 2025; June 1, 2025 – May 31, 2026 Criteria or Specific Requirement: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay (42 USC 254(k)(3)(G); 42 CFR sections 51c.303(f), and (g); and 42 CFR sections 56.303(f), and (g)). Condition: The Organization did not maintain documentation to show that patients had been evaluated for eligibility under its sliding fee scale policy and did not apply sliding fee adjustments consistent with the sliding fee scale assigned. Questioned Costs: None. Context: Eleven (11) of seventeen (17) encounters tested could not be verified as having received an appropriate sliding fee discount as their family size and income information was missing or outdated. Cause: This matter seems to be caused by a lack of adherence to policy and procedure by the front desk for obtaining all necessary information to appropriately determine the type of sliding fee discount for which a patient is eligible. Additionally, management is still working to identify the extent to which any of these issues are the result of the electronic medical records system's configuration. Effect: Patients may not be assessed a correct sliding fee discount according to their ability to pay and the Organization's sliding fee scale. Repeat Finding: No Recommendation: Management should provide training and education to front desk staff related to the EMR and the process for collecting and retaining family size and income information in addition to inputting it into the electronic medical records. We also recommend enhancing any current internal audits of patient visits to determine all required patient information and has been obtained and charges are appropriately billed in accordance with the Organization's policies. Views of Responsible Officials: There is no disagreement with this finding.