Criteria and Condition: Internal controls over financial reporting should be designed and in place to prevent, detect, and correct material misstatement in the financial statements in a timely manner. The internal controls were unable to prevent, detect, and correct several material errors in the preparation of the financial statements as of and for the year ended June 30, 2022, in a timely manner. This resulted in resulted in numerous significant adjustments related to assets, liabilities, net assets, revenue, and expenditures.
Cause: Existing internal controls over financial reporting require that management perform meaningful analysis of internal records and general ledger accounts on a regular basis. Management is not performing a meaningful analysis of internal records and the general ledger, which results in financial statements that contain a significant number of material errors.
Questioned Costs: None
Effect: A significant number of material audit adjustments were required to correct the financial statements as of and for the year ended June 30, 2022.
Recommendations: We recommend that management develop formal policies and procedures to identify material misstatements, which should include performing meaningful analysis of internal records and general ledger accounts on a regular basis. This will allow management to timely identify unusual trends in internal records and general ledger accounts that could be indicative of errors that cause the Center’s financial statements to be misstated.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve monitoring of the financial reporting process and to ensure meaningful analysis of financial records is occurring on a regular basis. Management has hired an experienced Chief Financial Officer for the finance department, has begun identifying areas of improvement within the finance department, and is in the process of implementing new procedures that will improve the accuracy and timeliness of financial reporting.
Criteria and Condition: Awardees must submit a quarterly Federal Financial Report Cash Transaction Report (“SF-425”) via the Payment Management System (“PMS”) within 30 days of the end of each calendar quarter. There is not sufficient evidence to verify that quarterly SF-425 reports were filed within 30 days of the end of each calendar quarter for the year ended June 30, 2022.
Context: The Center was not able to provide copies of a timely filed quarterly SF-425 for any quarter for the year ended June 30, 2022.
Effect: It appears that there were no quarterly SF-425 forms reporting cash draws and expenditures completed and submitted to PMS in a timely manner.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being accurately completed in a timely manner.
Recommendations: We recommend that management improve their reporting processes and controls to ensure all SF-425 reports are submitted timely and accurately to PMS.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over the completion and submission of SF-425 reports to ensure that reporting can be completed in an accurate and timely manner. These changes include updates to internal processes and the hiring of key members of financial management.
Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report. or nine months after the end of the audit period. The Center did not timely complete the Single Audit and submit to the Federal Audit Clearinghouse within nine months form the end of the audit period.
Context: Information required to complete the financial statements was not prepared and ready to audit in a timely manner. This resulted in the financial statements and Single Audit to not be finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine months of the end of the audit period.
Effect: The data collection form and reporting package for the Single Audit for the year ended June 30, 2022 were not submitted within the specified timeframe resulting in award drawdown restrictions.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being completed and submitted in a timely manner.
Recommendations: We recommend that management improve their reporting processes and controls to ensure that the Single Audit is completed and submitted to the Federal Audit Clearinghouse in a timely manner.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over financial reporting and compliance to ensure that reporting can be completed in an accurate and timely manner. These changes include updates of internal processes and the hiring of key members of financial management.
Criteria and Condition: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. The adjustments extended to the patients are based on Federal Poverty Guidelines that take into consideration the annual income earned by the individuals and families. There were no documents maintained to support the sliding fee discounts applied to four patient accounts. As a result, there is no way to verify if the discount applied was representative of the patients’ poverty levels. Lastly, four patients were assigned the incorrect poverty level resulting in services not being discounted properly.
Questioned Costs: None Cause: Existing internal controls over compliance are not effective at ensuring that sliding fee discount applications for patients are retained on file or ensuring that patient eligibility for sliding fee discounts are accurately determined.
Effect: Of the forty patients reviewed that had received sliding fee discounts, eight compliance findings were noted for the year ended June 30, 2022.
Recommendations: We recommend that management implement a checklist to ensure that all information required to fill out a patient’s sliding fee discount application is obtained, that the determination of a patient’s eligibility for a sliding fee discount is independently reviewed and approved by a supervisor, and that a patient’s application is properly retained.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over compliance over the sliding fee discount.
Criteria and Condition: Internal controls over financial reporting should be designed and in place to prevent, detect, and correct material misstatement in the financial statements in a timely manner. The internal controls were unable to prevent, detect, and correct several material errors in the preparation of the financial statements as of and for the year ended June 30, 2022, in a timely manner. This resulted in resulted in numerous significant adjustments related to assets, liabilities, net assets, revenue, and expenditures.
Cause: Existing internal controls over financial reporting require that management perform meaningful analysis of internal records and general ledger accounts on a regular basis. Management is not performing a meaningful analysis of internal records and the general ledger, which results in financial statements that contain a significant number of material errors.
Questioned Costs: None
Effect: A significant number of material audit adjustments were required to correct the financial statements as of and for the year ended June 30, 2022.
Recommendations: We recommend that management develop formal policies and procedures to identify material misstatements, which should include performing meaningful analysis of internal records and general ledger accounts on a regular basis. This will allow management to timely identify unusual trends in internal records and general ledger accounts that could be indicative of errors that cause the Center’s financial statements to be misstated.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve monitoring of the financial reporting process and to ensure meaningful analysis of financial records is occurring on a regular basis. Management has hired an experienced Chief Financial Officer for the finance department, has begun identifying areas of improvement within the finance department, and is in the process of implementing new procedures that will improve the accuracy and timeliness of financial reporting.
Criteria and Condition: Awardees must submit a quarterly Federal Financial Report Cash Transaction Report (“SF-425”) via the Payment Management System (“PMS”) within 30 days of the end of each calendar quarter. There is not sufficient evidence to verify that quarterly SF-425 reports were filed within 30 days of the end of each calendar quarter for the year ended June 30, 2022.
Context: The Center was not able to provide copies of a timely filed quarterly SF-425 for any quarter for the year ended June 30, 2022.
Effect: It appears that there were no quarterly SF-425 forms reporting cash draws and expenditures completed and submitted to PMS in a timely manner.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being accurately completed in a timely manner.
Recommendations: We recommend that management improve their reporting processes and controls to ensure all SF-425 reports are submitted timely and accurately to PMS.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over the completion and submission of SF-425 reports to ensure that reporting can be completed in an accurate and timely manner. These changes include updates to internal processes and the hiring of key members of financial management.
Criteria and Condition: Single Audits must be completed and submitted to the Federal Audit Clearinghouse within the earlier of 30 calendar days after receipt of the issued auditors’ report. or nine months after the end of the audit period. The Center did not timely complete the Single Audit and submit to the Federal Audit Clearinghouse within nine months form the end of the audit period.
Context: Information required to complete the financial statements was not prepared and ready to audit in a timely manner. This resulted in the financial statements and Single Audit to not be finalized and issued in order to be submitted to the Federal Audit Clearinghouse within nine months of the end of the audit period.
Effect: The data collection form and reporting package for the Single Audit for the year ended June 30, 2022 were not submitted within the specified timeframe resulting in award drawdown restrictions.
Questioned Costs: None
Cause: Internal controls over reporting and compliance were not effective at ensuring that the required reports were being completed and submitted in a timely manner.
Recommendations: We recommend that management improve their reporting processes and controls to ensure that the Single Audit is completed and submitted to the Federal Audit Clearinghouse in a timely manner.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over financial reporting and compliance to ensure that reporting can be completed in an accurate and timely manner. These changes include updates of internal processes and the hiring of key members of financial management.
Criteria and Condition: Health centers must prepare and apply a sliding fee discount schedule so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay. The adjustments extended to the patients are based on Federal Poverty Guidelines that take into consideration the annual income earned by the individuals and families. There were no documents maintained to support the sliding fee discounts applied to four patient accounts. As a result, there is no way to verify if the discount applied was representative of the patients’ poverty levels. Lastly, four patients were assigned the incorrect poverty level resulting in services not being discounted properly.
Questioned Costs: None Cause: Existing internal controls over compliance are not effective at ensuring that sliding fee discount applications for patients are retained on file or ensuring that patient eligibility for sliding fee discounts are accurately determined.
Effect: Of the forty patients reviewed that had received sliding fee discounts, eight compliance findings were noted for the year ended June 30, 2022.
Recommendations: We recommend that management implement a checklist to ensure that all information required to fill out a patient’s sliding fee discount application is obtained, that the determination of a patient’s eligibility for a sliding fee discount is independently reviewed and approved by a supervisor, and that a patient’s application is properly retained.
Views of Responsible Officials and Planned Corrective Actions: Management is taking steps to improve the internal controls over compliance over the sliding fee discount.