Finding Type: Internal Control Over Compliance – Other Information on the Federal Programs: Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.224 and 93.527 Federal Program Name: Health Center Program Federal Award Periods: May 1, 2023 – April 30, 2024 May 1, 2024 – April 30, 2025 Federal Awards: 22H80CS08230, 23H8LCS51011C6, 23H8GCS48313 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.526 Federal Program Name: Grants for Capital Development in Health Center Federal Award Periods: September 15, 2021 – September 14, 2024 Federal Awards: C8ECS43699 Criteria: General journal entries are part of Northeast Washington County Community Health, Inc.’s financial reporting system and are prepared to allocate costs, including payroll and related costs, to record grant billings and receivables, and to reconcile accounts as needed. Condition Found and Context: When performing testing related to general journal entries, there were six entries that were related to the recognition of third-party revenues (including pharmacy, dental and medical) that did not have documented review and approval. While the entries appear allowable and reasonable, there is no formal approval process for the journal entries posted. Cause and Effect: The lack of a formal approval process could lead to errors in financial reporting and revenue recognition. Recommendation: Management should create a formal policy that incorporates a journal entry review and documentation of that review.
Finding Type: Internal Control Over Compliance – Other Information on the Federal Programs: Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.224 and 93.527 Federal Program Name: Health Center Program Federal Award Periods: May 1, 2023 – April 30, 2024 May 1, 2024 – April 30, 2025 Federal Awards: 22H80CS08230, 23H8LCS51011C6, 23H8GCS48313 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.526 Federal Program Name: Grants for Capital Development in Health Center Federal Award Periods: September 15, 2021 – September 14, 2024 Federal Awards: C8ECS43699 Criteria: Under Federal regulations, non-Federal entities must maintain financial management systems and internal control processes that provide accurate, current, and complete disclosure of the financial results of federally funded activities. Condition: Northeast Washington County Community Health, Inc. implemented a new patient billing system during fiscal year 2024. Following implementation, management experienced significant difficulties reconciling patient accounts receivable, third-party payer revenues, contractual adjustments, and cash collections. As a result, Northeast Washington County Community Health, Inc. was unable to produce complete and auditable accounting records and financial statements until approximately two years after fiscal end. Cause and Effect: Northeast Washington County Community Health, Inc. had significant turnover in several key positions during the system conversion which led to capacity restraints that did not allow for adequate and timely testing, monitoring, or validating of the financial reporting impacts of the billing system conversion. The result of these delays led to the following: - Financial information was not available on a timely basis for management oversight. - The risk of material misstatement due to error or fraud increased. - Significant effort was required to reconstruct accounting records. - Financial reporting related to Federal awards may not have been complete, accurate, or timely. - Audit completion was substantially delayed. Recommendation: Management should create formal cross training opportunities that allow for continuous and accurate financial management processes in the event of turnover and capacity restraints.
Finding Type: Internal Control Over Compliance – Reporting Information on the Federal Programs: Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.224 and 93.527 Federal Program Name: Health Center Program Federal Award Periods: May 1, 2023 – April 30, 2024 May 1, 2024 – April 30, 2025 Federal Awards: 22H80CS08230, 23H8LCS51011C6, 23H8GCS48313 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.526 Federal Program Name: Grants for Capital Development in Health Center Federal Award Periods: September 15, 2021 – September 14, 2024 Federal Awards: C8ECS43699 Criteria: Northeast Washington County Community Health, Inc. has the responsibility to submit financial reports accurately and by established deadlines specified in the award terms and conditions by Federal agencies at certain times throughout the grant award period. Semiannual reports are due 30 days after period end and annual reports are due 90 days after period end. Annual audits are due nine months after fiscal year end. Condition Found and Context: Northeast Washington County Community Health, Inc. submitted one Federal Financial Report (SF- 425) after the required submission deadline. The report was submitted approximately a month and a half late. The Single Audit report is approximately 18 months late. Cause and Effect: Northeast Washington County Community Health, Inc. experienced significant staffing challenges during the time that they were managing the patient billing conversion and managing these awards, which has created a significant backlog in work to be completed. This led to delayed financial reporting for 2024 as well as submissions for subsequent years. Questioned Costs: None Repeat Finding: No Recommendation: Management should formalize a procedure and internal tracking document that allows for the tracking and monitoring of grant reporting to ensure completion. This report should be monitored by the staff responsible for the reporting and by management. This procedure should include the process of completing reports, the report due dates and protocol for any follow-up needed on submitted reports.