Audit 413645

Criteria – The Uniform Guidance, 2 CFR 200.305, requires non-federal entities to minimize the time elapsing between the transfer of federal funds and their disbursement for allowable program costs. The Organization is also required to maintain effective internal controls and adequate documentation to supporting federal cash drawdowns and demonstrate that amounts requested are consistent with immediate cash requirements for allowable expenditures. Condition and Description – During our testing of federal cash management, we noted that the Organization did not consistently maintain documentation demonstrating that federal drawdowns were based on immediate cash requirements for allowable program expenditures. Specifically, in January 2025, the Organization made two federal drawdowns totaling approximately $2.8 million, representing approximately 48% of the $5.8 million of federal funds drawn during the year, while HRSA-related payroll and direct program expenditures incurred through January 31, 2025, were approximately $125,000. Accordingly, federal funds were drawn materially in advance of the Organization's immediate cash needs. Although cumulative federal drawdowns for the year did not exceed eligible program expenditures, the timing of the January drawdowns was not consistent with federal cash management requirements to minimize the time between the receipt and disbursement of federal funds. Cause/Effect – The Organization did not have sufficiently effective procedures to reconcile federal drawdown requests to current program expenditures and immediate cash requirements before requesting funds. As a result, federal funds were drawn in advance of related expenditures, increasing the risk of noncompliance with federal cash management requirements and potential repayment of interest or other amounts to the federal government.

Criteria – Section 330(k)(3)(G) of the Public Health Service Act and applicable Health Center Program requirements require health centers to maintain a sliding fee discount program under which patient charges are adjusted based on ability to pay. The Health Center Program Compliance Manual, Chapter 9 – Sliding Fee Discount Program, requires the Organization to maintain board-approved policies and an approved sliding fee discount schedule that is applied consistently based on patient income and family size. For patients with annual income at or below 100% of the applicable Federal Poverty Guidelines, the Organization must provide a full discount or, if established by the Organization, charge only a qualifying nominal amount. Patients with income above 100% and at or below 200% of the Federal Poverty Guidelines must receive partial discounts based on gradations in income and the Organization's approved sliding fee discount schedule. Condition and Description – During our testing of the Organization’s Sliding Fee Discount Program, we tested 15 patient encounters and identified two exceptions in which patient charges and related sliding fee adjustments were not applied in accordance with the Organization’s approved sliding fee discount schedule. These exceptions indicate that controls over the consistent application and calculation of sliding fee discounts were not operating effectively during the year. Cause/Effect –. The Organization's procedures were not sufficiently effective to ensure that patient charges and related sliding fee adjustments were consistently calculated and applied in accordance with the approved sliding fee discount schedule. As a result, certain patients were charged amounts that did not conform to the Organization's approved schedule, increasing the risk of noncompliance with Health Center Program requirements and inconsistent application of discounts to eligible patients.