Audit 411956

Finding 2025-001, Significant Deficiency, Special Tests and Provisions Identification of federal program: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 93.224 Health Center Program Cluster Criteria: 45 CFR § 75.303 requires non-federal entities to establish and maintain effective internal controls that provide reasonable assurance that federal awards are managed in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Health Center Program requirements further require health centers to maintain and consistently implement written policies and procedures governing the administration of the Sliding Fee Discount Program. Federally Qualified Health Centers are required to maintain and implement a Sliding Fee Discount Program (SFDP) that includes policies and procedures for assessing patient eligibility, determining family size and income, and applying discounts in accordance with the approved SFDP methodology. Condition: The Organization maintained an approved sliding fee discount schedule and consistently applied the established fee schedule based on the family-size determination recorded by staff. However, Organization employees approving sliding fee discounts for patients did not follow the Organization’s prescribed policy as it relates to the determination of family size. Certain patients who applied for discounted services were assigned the improper sliding fee discount level, based on the Organization’s established sliding fee discount scale. Context: Exceptions were identified in 3 of 40 applications tested. Cause: Formal policy documents, as well as the publicly distributed 2025 sliding fee schedule for the Organization, stated that the definition of family for the purpose of family size determination is a group of two or more persons related by birth, marriage, or adoption who live together. However, the actual definition of family used by Organization staff when processing sliding fee discount applications was based on legal marital status and number of dependents under the Internal Revenue Code. Additionally, the Organization has a formal policy for how it will calculate annual income for sliding fee discount applicants. Out of the forty applicants that were tested, three had an incorrect sliding fee discount assigned to them. Potential effect: Certain applicants may have received higher sliding fee discounts than they should have, based on Organization policy. Conversely, other applicants may have qualified for a higher discount level than what was allotted to them. Questioned costs: None. Recommendation: We recommend that the Organization annually communicate the sliding scale and family definitions to staff processing sliding fee discounts. Additionally, we recommend that a second individual review the sliding fee discount level assigned to applicants, including reviewing income calculations and family size determinations, to ensure that levels assigned are aligned to information provided by the applicant. Views of responsible officials and planned corrective actions: See attached management response to finding and corrective action plan.