Audit 411822

Section III - Federal Award Findings and Questioned Costs Finding 2025-001: Reporting - Significant Deficiency Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the Homless, and Public Housing Care) Grants for New and Expanded Services under the Health Center Program Federal Assistance Listing Numbers: 93.224 and 93.527 Federal Award Identification Number and Year: H80CS00053-2023 and 2024 Criteria In accordance with grant requirements, annual Federal Financial Reports ("FFR") must be submitted no later than indicated in the notice of grant award. Condition The Center submitted the annual FFR late for the budget period ended January 31, 2026. Cause Due to the turnover in the financial leadership, the report was not submitted on time. Effect or Potential Effect The Center did not comply with the appropriate rules and regulations as per the Uniform Guidance and with DHHS grant requirements. Questioned Costs None Context The annual FFR for the budget period ended January 31, 2026 was due May 1, 2026. The CFO authorized and submitted the FFR on May 22, 2026. Identification of Repeat Finding Not a repeat finding. Recommendation The Center should establish controls to ensure all accounting records are analyzed and proper support is available in order to ensure that the FFRs are submitted on a timely basis. The Center should also ensure that all reporting requirements are monitored and met on a timely basis. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.

Finding 2025.002: Special Tests and Provisions - Material Weakness Name of Federal Agency: U.S. Department of Health and Human Services Federal Program Names: Health Center Program Cluster Health Center Program (Community Health Centers, Migrant Health Centers, Health Care for the HOmeless, and Public Housing Primary Care) Grants for New and Expanded Services under the Health Center Program Criteria Health centers are required to have a corresponding schedule of discounts applied and adjusted on the basis of patients' ability to pay and their eligibility. A patient's eligibility to pay is determined on the basis of the official poverty guideline, as revised by DHHS (42 CFR Sections 51c, 107(b)(5), 56.108(b)(5) and 56.303(f)). The Center should be implementing and monitoring procedures to properly determine, calculate and review sliding fee discounts issued to patients in accordance with the Center's sliding fee scale. Condition The Center did not always have the proper slide fee documentation readily available to ensure the proper slide fee discount was applied based on approved policies or the discount was calculated incorrectly. Cause The Center did not have adequate internal controls in place to effectively ensure that all sliding fee discounts were properly calculated based on approved documentation. Effect or Potential Effect The Center did not comply with the appropriate rules and regulations as per the Uniform Guidance. Questioned Costs None Context A test of 40 sliding fee discount transactions was performed and resulted in 20 instances where the Center was unable to provide approved documentation which lead to the sliding fee discount being calculated incorrectly. Our sample was a statistically valid sample. Identification of Repeat Finding This finding is a repeat finding (see prior year finding number: 2024.003) Recommendation The Center should establish a system of internal controls to ensure that all sliding fee discounts are properly calculated and supported based on family size and income. Views of Responsible Officials and Planned Corrective Actions Management agrees with the audit finding and will strengthen internal controls and accountability to correct the deficiency. Management has prepared a Corrective Action Plan that outlines the additional controls implemented.