Audit 415502

Information on the federal program – Assistance Listing Number 93.224/93.527 Health Center Program Cluster from the U.S. Department of Health and Human Services, for the project period February 1, 2025 through January 31, 2026. Criteria or specific requirement – Special Tests and Provisions – 42 CFR, Part 56.303(e), (f), and (g). Health Centers receiving funds under the Health Center Program Cluster are required to prepare a schedule of fees or payments for the provision of its services designed to cover its reasonable costs of operation and a corresponding schedule of discounts adjusted on the basis of the patient’s ability to pay, to make every reasonable effort, including the establishment of systems for eligibility determination, billing and collection, and to secure from patient payments for services in accordance with the schedule of fees and discounts. Condition – We noted during our testing of compliance with federal awards that the Center did not properly apply the sliding fee discounts approved by the board of directors for 6 out of a sample of 25 patients for the year ended January 31, 2026. Cause – Errors occurred when analyzing patient accounts. Effect or Potential Effect – Discounts were not properly applied to patient accounts based on the policy. Questioned Costs – Not applicable. Context – From a total of 12,525 sliding fee discounts for the period, 25 discounts were applied for testing. This sample was not, and was not intended to be, a statistically valid sample. The Center’s management did prepare a schedule of discounts adjusted on the basis of the patient’s ability to pay; such schedule was periodically updated and approved by the Center’s board of directors. However, there were errors when comparing the approved schedule to certain actual adjustments to patient accounts during the year ended January 31, 2026. For 5 of the 25 accounts selected for testing, the account had an incorrect discount applied and 1 patient did not have supporting documentation to support the sliding application. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend management work to provide additional training to the staff responsible for completing sliding fee applications and those responsible for applying the sliding fee discount to patient accounts. We also recommend management conduct additional internal reviews to verify the patients’ accounts have been adjusted properly and appropriate supporting documentation is maintained in the patient’s file. Views of responsible officials and planned corrective actions – The Center will perform additional education to its employees to ensure proper documentation is retained and sliding fee discount applied.

Information on the federal program – Assistance Listing Number 93.224/93.527 Health Center Program Cluster from the U.S. Department of Health and Human Services, for the project period February 1, 2025 through January 31, 2026. Criteria – Cash Management – 2 CFR 200.305(b)(12). If interest in excess of $500 per year was earned on federal cash draws, determine if it was remitted annually to the Department of Health and Human Services, Payment Management System. Condition – We noted during our testing of compliance with federal awards that the Health Center earned approximately $27,000 in interest income due to not following the Center’s cash management policy and making advance draws for the year ended January 31, 2026. The interest income earned was not remitted to the Department of Health and Human Services, Payment Management System. Cause – Excess interest earned was due to the Center not following its cash management policy and making advance draws occurring in January and February 2025 which then entered the Health Center’s interest earning sweep account. During the period of February to August 2025 approximately $27,000 of interest was earned. The interest earned on the advance draws was not remitted to the Department of Health and Human Services. Effect or Potential Effect – Interest earned not remitted to the Department of Health and Human Services. Questioned Costs – Not applicable. Context – Due to uncertainty related to the federal government spending cuts and the pause on the disbursements of federal grants and loans in January and February 2025, the Health Center did an advance drawdown of approximately $3,243,000. The advance drawn funds, once received, entered the Health Center’s interest earning sweep account. The Center earned interest on advance drawn amounts until the amount had been exhausted and resumed the performing draw downs based on reimbursement method. During this period approximately $27,000 of interest was earned but the amount in excess of $500 was not remitted to the Department of Health and Human Services. Identification as a repeat finding, if applicable – Not a repeat finding. Recommendation – We recommend the Health Center track interest earned on any advance drawn grant funds and remit annually back to the Department of Health and Human Services, Payment Management System any interest earned in excess of $500 on advance draws. We also recommend management review the grant drawdown policies and consider including language to allow for more flexibility in times of uncertainty for advance drawdowns. Views of responsible officials and planned corrective actions – The Center corrected the advance draw by expending the draws during the year ended January 31, 2026 and did not complete an advance draw again in 2026. The Center will remit the excess interest earned to the Department of Health and Human Services.