Audit 414028

Health Center Program Cluster – Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Criteria or specific requirement – Special Tests and Provisions: Sliding Fee Discounts (42 USC 254(k)(3)(g); 42 CFR sections 51c.303(g); and 42 CFR sections 56.303 (f)) Condition – Sliding fee discounts applied to patient charges were inconsistent with the Organization’s sliding fee discount schedule. The Organization’s sliding fee discount policy is not compliant with the Health Center Program requirements for certain dental services, which are within the scope of the Health Center Program. Cause – The Organization did not comply with its sliding fee discount policy. The Organization has expanded dental services provided in recent years and failed to ensure its policy is compliant in its entirety. Effect or potential effect – Patients may receive sliding fee discounts that are inconsistent with the Organization's approved policy and/or applicable Health Center Program requirements. Questioned costs – None Context – A sample of 40 encounters out of 44,317 total encounters was tested. The sampling methodology used is not and is not intended to be statistically valid. Five patients received a sliding fee adjustment that was inconsistent with the approved policy for the proper sliding fee adjustments based on their income documentation. In addition, the Organization's approved sliding fee discount schedule for certain dental services was not fully compliant with Health Center Program requirements for patients at or below 100% of the Federal Poverty Guidelines. Identification as a repeat finding, if applicable – Yes, see finding 2024-002. Recommendation – The Organization should review the sliding fee discount policy and schedules to ensure compliance with the Health Center Program Compliance Manual for all services within the scope of the program. The Organization should also consider simplifying the methodology used to calculate sliding fee discounts and related system processes to promote consistent application of discounts and improve ongoing compliance. The Organization should also continue educating personnel on the sliding fee discount program and consider implementing internal audits of sliding fee discounts to monitor and identify specific areas for further improvements or training.

Health Center Program Cluster – Assistance Listing Numbers 93.224 and 93.527 U.S. Department of Health and Human Services Criteria or specific requirement – Cash Management (45 CFR 75.305) Condition – Grant funds were drawn down in advance of disbursements for eligible expenditures. Cause – On January 27, 2025, the Office of Management and Budget (OMB) ordered a pause to the disbursement of federal grants to take effect the following day. Due to uncertainty around how long the pause would last, management advance drew on the Organization’s federal awards on January 28, 2025. Additionally, the Organization based drawdown requests on general ledger expenditure activity rather than actual cash disbursements. As a result, management did not consistently identify when expenditures included in drawdown requests had not yet been paid. Effect or potential effect – Federal funds were received in advance of the related cash disbursements, resulting in noncompliance with federal cash management requirements. The Organization may earn interest on federal funds held in advance of disbursement. Questioned costs – None Context – Drawdown activity for the Health Center Program awards was analyzed throughout the year. Multiple instances were identified in which cumulative drawdowns exceeded cumulative disbursements, indicating federal funds were received in advance of immediate cash needs. The largest advance draw occurred on January 28, 2025, when management requested a larger than normal drawdown in response to the federal funding pause. Based on the final expenditure population, sufficient allowable expenditures existed by year-end to support funds received; however, drawdowns were not consistently supported by actual cash disbursements at the time funds were requested. Interest earned on advance draw positions did not exceed the federal retention threshold. Identification as a repeat finding, if applicable – Not a repeat finding Recommendation – The Organization should strengthen controls over the drawdown process to ensure federal funds are requested only for immediate cash needs and are supported by actual or immediately anticipated cash disbursements.