Material Weakness Finding: 2025-005 Reporting Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Nurse Education, Practice Quality and Retention Grants Assistance Listing No. - 93.359 Criteria: Uniform Guidance, Reporting – Federal Financial Report Condition: For 3 grants, the Federal Financial Reports (FFR) submitted to the Department of Health and Human Services (DHHS) during the fiscal year ended December 31, 2025 contained incorrect amounts for the federal share of expenditures. Cause: The Organization did not submit accurate FFR filings for 3 grants. Effect: The federal share of expenditures were not correctly reported in 3 FFR filings. Questioned Costs: None reported Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: Yes Recommendation: It is recommended that the FFR filings be reviewed by a person other than the preparer of the report prior to submission to ensure accurate reporting. Views of Responsible Officials: Management concurs. Procedures will be established to ensure that FFR filings are reviewed in order to ensure that they are accurately filed. Contact Person: Ernest J. Stan Wardlaw, CEO Anticipated Date of Completion: September 30, 2026
Material Weakness Finding: 2025-006 Cash Management – Federal Grants Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Nurse Education, Practice Quality and Retention Grants Assistance Listing No. - 93.359 Criteria: Cash Management, 45 CFR 75.305 Condition: The Organization made advance draws of federal funds during the year ended December 31, 2025. Cause: The Organization failed to reconcile expenditures prior to drawing federal grant funds. Effect: During the year ended December 31, 2025, 7 advance draws totaling $4,903,985 were made in the U.S. Department of Health and Human Services’ Payment Management System. Portions of these funds were not expended prior to December 31, 2025, resulting in federal cash on hand totaling $924,748 at December 31, 2025. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: Yes Recommendation: It is recommended that, before the Organization makes a draw of federal funds, a report of year-to-date program expenditures paid as well as year-to-date funds drawn be reviewed to ensure that no unauthorized federal funds are drawn down in excess of expenditures. Views of Responsible Officials: Management concurs. Management will reconcile all expenditures prior to making the federal grant draws to ensure that advance draws of federal funds do not occur. Contact Person: Ernest J. Stan Wardlaw, CEO Anticipated Date of Completion: September 30, 2026
Material Weakness Finding: 2025-007 Procurement, Suspension and Debarment Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Procurement 45 CFR 75.329 and 45 CFR 75.213 Condition: The Organization did not verify that employees and certain vendors were not suspended, debarred, or otherwise excluded from participating in federal programs before entering into transactions with them. Cause: The Organization did not have proper procedures in place to ensure debarment searches were obtained as required. Effect: The Organization did not verify that four vendors and five employees were not suspended, debarred, or otherwise excluded from participating in federal programs before entering into transactions with them. Questioned Costs: None reported. Context/Sampling: The finding appears to be a systemic issue. Repeat Finding from Prior Year: No Recommendation: It is recommended that the Organization establish policies and procedures to ensure that the procurement policy is followed and that debarment searches are performed and documented as required. Views of Responsible Officials: Management concurs. Procedures will be updated, and employees will be trained to ensure compliance with the procurement requirements. Contact Person: Ernest J. Stan Wardlaw, CEO Anticipated Date of Completion: September 30, 2026
Material Weakness Finding: 2025-008 Sliding Fee Discounts Federal Programs: Department of Health and Human Services Health Center Program Cluster Assistance Listing No. - 93.224 and 93.527 Criteria: Uniform Guidance, Special Tests & Provisions, Sliding Fee Discounts, 42 CFR, 56.303 Condition: Health centers that receive funding under the Health Center Program Cluster must prepare and apply a sliding fee discount so that the amounts owed for health center services by eligible patients are discounted based on the patient’s ability to pay. During compliance testing, it was determined that the Organization did not obtain and properly document all necessary elements required by the Organization’s policy and that incorrect sliding fee discounts were applied to certain patient accounts. Cause: There were deficiencies in internal controls over the Organization’s sliding fee program. Effect: Proper documentation was unavailable to substantiate that discounts were properly applied to patient accounts, and incorrect discounts were applied to certain patient accounts. Questioned Costs: None Context/Sampling: For 8 of 48 patients selected for testing, incorrect discounts were provided. Three patients received an incorrect discount, three patients who qualified for discounts didn’t receive a discount, and two patients received a discount who did not qualify for a discount. This sample was not, and was not intended to be, a statistically valid sample. The finding appears to be a systemic issue. Repeat Finding from Prior Year: Yes Recommendation: It is recommended that employees are properly trained to document and apply the sliding fee discounts in accordance with the Organization’s sliding fee policy. It is also recommended that sliding fee discounts are reviewed by a supervisor on a periodic basis to ensure compliance with the sliding fee scale. Views of Responsible Officials: Management concurs. Efforts will be made to implement corrective actions as recommended above. Contact Person: Ernest J. Stan Wardlaw, CEO Anticipated Date of Completion: September 30, 2026