Audit 414400

2024-002 Federal Clearinghouse Late Filing ALN: 93.224 Program: Health Center Program Cluster Agency: US Department of Health and Human Services Compliance Requirement: L Reporting Criteria: Recipients of federal funds at the major program level are required to submit audited consolidated financial statements to the federal clearinghouse either nine months after year end or thirty days after the audit report is accepted by those charged with governance. Finding/ Condition: The Organization failed to comply with the time requirement for federal clearinghouse submissions. Questioned Cost: None. Effect: The Organization is in violation of Federal Clearinghouse regulations. Cause: Personnel availability delayed the completion of the audit. Repeat Finding: Yes Recommendation: We recommend that the Organization begin the audit process earlier in the year to allow for unforeseen delays. Views of Responsible Officials and Corrective Action Plan: The Organization agrees with the finding and will implement additional controls to ensure that this does not recur. Please refer to the corrective action plan on page 33.

2024-003 Sliding Fee Discount Determination ALN: 93.224 Program: Health Center Program Cluster Agency: US Department of Health and Human Services Compliance Requirement: N Special Tests and Provisions Criteria: Federal grant compliance provisions require that the Organization correctly identify a patient's ability to pay and that the rates for services be adjusted accordingly based on the sliding fee schedule. The Organization is required to follow its sliding fee policy when providing discounts to eligible patients. Finding/ Condition: In our sample of 10 tested items, two samples were not adjusted according to the sliding fee policy. Questioned Cost: None. Effect: Lack of strict enforcement of the policy of sliding fee eligibility determination and compliance may have resulted in the Organization providing discounted services greater to or less than the appropriate amounts to beneficiaries. Cause: Inadequate understanding of the sliding fee program requirements and Organization policies by employees involved in sliding fee determination and billing. Repeat Finding: No Recommendation: Front office and billing staff should be trained to be able to meet the sliding fee program requirements. Views of Responsible Officials and Corrective Action Plan: The Organization agrees with the finding and will implement additional controls to ensure that this does not recur. Please refer to the corrective action plan on page 33.

2024-004 Noncompliance Related to Conflict-of-Interest Policies ALN: 10.766 Program: Emergency Rural Health Care Grant Agency: US Department of Agriculture Compliance Requirement: I Procurement Suspension & Debarment Criteria: Per the entity’s conflict-of-interest policy and Uniform Guidance, officers and key employees must disclose any actual or apparent conflicts of interest, including related party transactions. Such transactions should be reviewed and approved by those charged with governance. Finding/ Condition: During our audit, we identified transactions between the Organization and a vendor owned or controlled by officers and family members of officers of the Organization. These transactions were not appropriately disclosed to the Board of Directors and were not subject to documented review or approval in accordance with the Organization’s conflict-of-interest policy. Questioned Cost: $476,957 Effect: Failure to disclosure conflicts of interest increases the risk of improper use of federal funds. This lack of transparency and oversight by management can set an inappropriate tone for the organization. This also increases the risk of noncompliance with federal requirements. Cause: Management did not adhere to established conflict-of-interest policies and procedures. Additionally, internal controls were not designed or operating effectively to identify and monitor related party transactions. Repeat Finding: Yes. Recommendation: We recommend that management: • Strengthen controls over identifying and disclosing related party transactions. • Require annual conflict-of-interest disclosures from all key personnel. • Ensure all related party transactions are fully disclosed, reviewed for reasonableness and approved by the Board or an independent committee. • Provide training on compliance with federal requirements. Views of Responsible Officials and Corrective Action Plan: Please see page 34 for the views of responsible officials and corrective action plan.