Corrective Action Plans

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FINDING 2025-005 Name of Responsible Individual: Chad Wick, Director of Financial Aid Corrective Action: We have implemented a new Quality Assurance Measure for Auditing all students with a C-Flag. The process begins with the FA advisor team. They are responsible for ensuring all documents have been...
FINDING 2025-005 Name of Responsible Individual: Chad Wick, Director of Financial Aid Corrective Action: We have implemented a new Quality Assurance Measure for Auditing all students with a C-Flag. The process begins with the FA advisor team. They are responsible for ensuring all documents have been received and all steps have been completed to clear the C-Flag. In Colleague the advisor will then mark the file is ready for audit. Chad Wick, Director, Financial aid or Brandon Rhone, Systems Administrator, will review all documents and steps needed to clear C-Flag and then update the communication code to audited and make any adjustments if needed to the FAFSA. Anticipated Completion Date: Already completed
FINDING 2025-004 Name of Responsible Individual: Chad Wick, Director of Financial Aid, and Brandon Rhone, Systems Administrator Corrective Action: We will implement a second check process after R2T4 has been calculated to ensure the correct dates are being used. Chad Wick, Director, Financial Aid wi...
FINDING 2025-004 Name of Responsible Individual: Chad Wick, Director of Financial Aid, and Brandon Rhone, Systems Administrator Corrective Action: We will implement a second check process after R2T4 has been calculated to ensure the correct dates are being used. Chad Wick, Director, Financial Aid will conduct the initial calculating of R2T4 on a weekly basis. Brandon Rhone, Systems Administrator, will review all calculations prior to processing them in Colleague. Anticipated Completion Date: March 31, 2026
FINDING 2025-003 Name of Responsible Individual: Brandon Rhone, Systems Administrator Corrective Action: We implemented a process which assigns communications management codes based on transmittal activity of each federal direct loan. On the same day a loan is disbursed, our system applies the appro...
FINDING 2025-003 Name of Responsible Individual: Brandon Rhone, Systems Administrator Corrective Action: We implemented a process which assigns communications management codes based on transmittal activity of each federal direct loan. On the same day a loan is disbursed, our system applies the appropriate code to the student record. These codes are then automatically selected for the correct loan disbursement notification to be sent either to the student or parent based on the federal loan type. Anticipated Completion Date: Already completed
FINDING 2025-002 Name of Responsible Individual: Chad Wick, Director of Financial Aid Corrective Action: We have implemented a new Quality Assurance Measure for Auditing all students selected for verification. The process begins with the FA advisor team. They are responsible for ensuring all documen...
FINDING 2025-002 Name of Responsible Individual: Chad Wick, Director of Financial Aid Corrective Action: We have implemented a new Quality Assurance Measure for Auditing all students selected for verification. The process begins with the FA advisor team. They are responsible for ensuring all documents have been received and verification has been completed. In Colleague the advisor will then mark the file is ready for audit. Chad Wick, Director, Financial aid or Brandon Rhone, Systems Administrator, will review all documents and verification steps and then update the verification status to verified and the communication code to audited. Anticipated Completion Date: Already completed
FINDING 2025-001 Name of Responsible Individual: Mary Beth Schiller-Schwenke, Chief Financial Officer and Controller Corrective Action: The Federal Pell Grant Program instances resulted from reversals of student awards. The Business Office routinely monitors the general ledger for award transactions...
FINDING 2025-001 Name of Responsible Individual: Mary Beth Schiller-Schwenke, Chief Financial Officer and Controller Corrective Action: The Federal Pell Grant Program instances resulted from reversals of student awards. The Business Office routinely monitors the general ledger for award transactions, however, reversals of student aid awarded late in the academic term can be missed. The Financial Aid Office will be responsible for notifying the Business Office when they initiate award reversals that necessitate a refund. The Business Office has updated procedures so that the related general ledger accounts are reviewed no less than once per week for the full year. In addition to ongoing monitoring of the related general ledger accounts, the Business Office will also create automated reporting to notify staff of the pending account balances. Anticipated Completion Date: April 30, 2026
Injury Prevention and Control Research and State and Community Based Programs– Assistance Listing No. 93.136 Community Programs to Improve Minority Health Grant– Assistance Listing No. 93.137 Ending the HIV Epidemic in the U.S. – Ryan White HIV/AIDS Program Parts A and B Assistance Listing No. 93.68...
Injury Prevention and Control Research and State and Community Based Programs– Assistance Listing No. 93.136 Community Programs to Improve Minority Health Grant– Assistance Listing No. 93.137 Ending the HIV Epidemic in the U.S. – Ryan White HIV/AIDS Program Parts A and B Assistance Listing No. 93.686 Recommendation: We recommend that management implement formal policies and procedures to ensure FFATA reporting requirements are identified, tracked, and reported timely for all applicable subawards. This should include documented review procedures and monitoring controls to ensure FFATA reports are submitted accurately and within required deadlines. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: BPHC will update our FFATA Reporting Standard Operating Procedures (SOP) to include tighter controls that ensure that FFATA reporting requirements are more clearly identified, tracked and reported timely for all applicable subawards. The updated SOP will document the revised procedures and require a biweekly or monthly sign off from the Director of the Post-Award Grant Accounting to ensure that our FFATA reporting is accurate and on time going forward. Name(s) of the contact person(s) responsible for corrective action: Jose A. Hernandez and Steve Simmons Planned completion date for corrective action plan: Prior to June 30, 2026
Name: T.P. White Complex, Inc., d/b/a Traskwood Complex, Inc. Contact: Patricia Walker, Chief Financial Officer Contact Phone Number: 501-982-0528 Audit Period Ending: June 30, 2025 Anticipated Completion Date: May 31, 2026 Finding 2025-001: Upon renewal of its Project Rental Assistance Contract (PR...
Name: T.P. White Complex, Inc., d/b/a Traskwood Complex, Inc. Contact: Patricia Walker, Chief Financial Officer Contact Phone Number: 501-982-0528 Audit Period Ending: June 30, 2025 Anticipated Completion Date: May 31, 2026 Finding 2025-001: Upon renewal of its Project Rental Assistance Contract (PRAC) on November 30, 2024, the Project did not remit residual receipts in excess of $250 per unit to HUD as required by HUD guidance. Management’s Response and Planned Corrective Actions: Subsequent to year end, management engaged in discussions with HUD and intends to identify eligible Project needs and submit a HUD 9250 request to use the excess residual receipts in accordance with HUD Handbook 4350.1, Chapter 25, Section 25 9. Approval of such a request is at HUD’s discretion.
Name: Mulberry Place, Inc. Contact: Patricia Walker, Chief Financial Officer Contact Phone Number: 501-982-0528 Audit Period Ending: June 30, 2025 Anticipated Completion Date: May 31, 2026 Finding 2025-001: Upon renewal of its Project Rental Assistance Contract (PRAC) on July 31, 2024, the Project d...
Name: Mulberry Place, Inc. Contact: Patricia Walker, Chief Financial Officer Contact Phone Number: 501-982-0528 Audit Period Ending: June 30, 2025 Anticipated Completion Date: May 31, 2026 Finding 2025-001: Upon renewal of its Project Rental Assistance Contract (PRAC) on July 31, 2024, the Project did not remit residual receipts in excess of $250 per unit to HUD as required by HUD guidance. Management’s Response and Planned Corrective Actions: Subsequent to year end, management engaged in discussions with HUD and intends to identify eligible Project needs and submit a HUD 9250 request to use the excess residual receipts in accordance with HUD Handbook 4350.1, Chapter 25, Section 25 9. Approval of such a request is at HUD’s discretion.
2025-009 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Explanation ...
2025-009 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University design controls to ensure an adequate review process is in place to ensure compliance with reporting requirements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University reviewed its awarding and reconciliation processes following the identified discrepancy between COD and the institutional ledger, which resulted from packaging based on an earlier ISIR transaction without confirming the most recent ISIR data. To address this, the University has partnered with FA Solutions and implemented enhanced controls within Regent, including system checks to flag updated ISIR information and require confirmation of the most current transaction prior to packaging.Additionally, reconciliations and related reporting provided by FA Solutions will be reviewed for accuracy and completeness. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 3/31/2026
2025-008 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University should implement formal review procedures to document that the Cash Management reconciliation and drawdown reviews are bei...
2025-008 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University should implement formal review procedures to document that the Cash Management reconciliation and drawdown reviews are being performed to correct errors in a timely manner and to minimize the likelihood of errors going undetected. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University performs cash management reconciliation and drawdown reviews; however, formal documentation of these reviews has not been consistently maintained. To address this, the University is implementing formal review procedures that include documented evidence of reconciliation and drawdown review activities. As part of this process, reconciliations and drawdowns prepared by FA Solutions will be reviewed by the Financial Aid Office for accuracy and completeness prior to submission and reporting. These procedures will be formalized within a standardized SOP, which will outline review timelines, responsibilities, and required documentation to ensure errors are identified and resolved in a timely manner and to reduce the risk of discrepancies going undetected. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 4/30/2026
2025-007 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University design controls to ensure an adequate review process is in place to ensure compliance over stale checks that need to be returne...
2025-007 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University design controls to ensure an adequate review process is in place to ensure compliance over stale checks that need to be returned to the Department of Education after 240 days. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University is implementing enhanced controls to ensure compliance with stale-dated Title IV credit balance checks. This includes establishing a monthly review process in coordination with Accounts Payable, Accounts Receivable, and the Financial Aid Office to identify any outstanding checks approaching or exceeding the 240-day threshold. As part of this process, a tracking mechanism will be maintained to monitor the status and issuance dates of all Title IV credit balance checks. The University will make reasonable efforts to contact students and reissue checks, as appropriate, to ensure funds are received. Any checks that remain uncashed and meet the stale-dated threshold will be voided and returned to the U.S. Department of Education in accordance with federal requirements. These procedures will be formalized within a standardized SOP to ensure consistent and timely compliance moving forward. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid, Accounts Receivable Clerk, and Accounts Payable Clerk Planned completion date for corrective action plan: 4/30/2026
2025-006 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review its current procedures for awarding Title IV funds and implement any changes necessary to ensure federal funds are award...
2025-006 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review its current procedures for awarding Title IV funds and implement any changes necessary to ensure federal funds are awarded and disbursed in accordance with federal regulations. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University has conducted a review of its procedures for awarding Title IV funds, with particular attention to the awarding of Summer Pell. Through this review, we identified that Summer Pell was not awarded to eligible students during the applicable period, due in part to a misunderstanding of awarding requirements during a transition in third-party processing support. Urshan has since partnered with FA Solutions to strengthen oversight and ensure alignment with federal awarding requirements. Updated procedures have been implemented to ensure all eligible students are properly evaluated for Title IV aid, including Summer Pell, across all applicable terms. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 8/31/2026
2025-005 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University review the GLBA requirements and ensure their WISP includes all required elements. Explanation of disagreement with audit ...
2025-005 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University review the GLBA requirements and ensure their WISP includes all required elements. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: The University has completed a comprehensive review and revision of its Written Information Security Program (WISP) to ensure alignment with all applicable requirements under the Gramm-Leach-Bliley Act (GLBA). While these updates were finalized after the end of FY25, the revised WISP now includes all required elements. The University has also received confirmation from the U.S. Department of Education’s Cybersecurity Compliance team that the updated program meets minimum GLBA compliance requirements. Moving forward, the University will maintain and periodically review its WISP to ensure ongoing compliance with federal standards. Name(s) of the contact person(s) responsible for corrective action: Dewayne Presson & Keith Braswell | Urshan IT Department Planned completion date for corrective action plan: 3/31/2026
2025-004 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed accurately. Explanation o...
2025-004 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend that the University review policies and procedures related to R2T4 calculations to ensure calculations are performed accurately. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Urshan has partnered with FA Solutions, an experienced third-party processor. Through this partnership, we have strengthened our processes and implemented additional checks and balances to ensure that R2T4 determinations are identified, calculated, and processed in a timely and compliant manner. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 3/31/2026
U.S. Department of Education 2025-003 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are...
U.S. Department of Education 2025-003 Federal Direct Student Loans – Assistance Listing No. 84.268 Federal Pell Grant Program – Assistance Listing No. 84.063 Recommendation: We recommend the University review current processes for reporting to NSLDS and implement procedures to ensure submissions are reported timely and accurately. Explanation of disagreement with audit finding: There is no disagreement with the audit finding. Action taken in response to finding: Urshan is currently in the onboarding process to partner with the National Student Clearinghouse, which will improve the timeliness and accuracy of our enrollment reporting to NSLDS. In addition, we are developing and implementing a standardized SOP that establishes defined reporting schedules (at least every 60 days), clearly outlines roles and responsibilities, and includes reconciliation procedures to ensure data accuracy. Name(s) of the contact person(s) responsible for corrective action: Levi Powell, Director of Financial Aid Planned completion date for corrective action plan: 7/31/2026
Federal Program Title: R&D Cluster and Congressional Directives Assistance Listing Number: R&D and 93.493 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that UEC establish and implement equipment management procedures to ens...
Federal Program Title: R&D Cluster and Congressional Directives Assistance Listing Number: R&D and 93.493 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that UEC establish and implement equipment management procedures to ensure property records are complete, physical inventories are performed at least biennially, and adequate safeguards are maintained for all equipment acquired with Federal funds. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: University Enterprises Corporation (UEC) has implemented and is continuing to strengthen internal controls over equipment and real property management to ensure compliance with federal requirements. Corrective actions include implementing standardized equipment management procedures to ensure complete and accurate property records, establishing inventory protocols to support equipment acquired with federal funds. These efforts are being carried out in coordination with CSUSB Procurement and Property Management to ensure alignment in asset tracking, inventory practices, and documentation. UEC is the title holder of all equipment and property. Upon the conclusion of a grant, the equipment will be transferred to CSUSB, and annual oversight requirements will be enhanced in collaboration with CSUSB Property Management to ensure consistent monitoring and compliance. Contact(s) Responsible for Corrective Action: UEC Executive Director, and CSUSB Property Management Planned Completion Date for Corrective Action: June 30, 2026
Federal Program Title: R&D Cluster, Child Care Access Means Parents in School, and TRIO Cluster Assistance Listing Number: R&D, 84.335, and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that the UEC strengthen its c...
Federal Program Title: R&D Cluster, Child Care Access Means Parents in School, and TRIO Cluster Assistance Listing Number: R&D, 84.335, and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that the UEC strengthen its cash management and financial reporting procedures to ensure reimbursement requests include only costs incurred in the appropriate fiscal period, are supported by adequate documentation, and are submitted in a timely manner. The UEC should also enhance review controls to verify proper period recognition of costs before submitting reimbursement requests. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: University Enterprises Corporation (UEC) has implemented and is continuing to strengthen internal controls over cash management, reimbursement timing, and supporting documentation. Corrective actions include the implementation of a revised subaward management process to improve documentation, period alignment, and pre-submission review, strengthening controls to ensure reimbursement requests include only costs incurred within the appropriate fiscal period, reinforcing documentation and validation requirements prior to submission, establishing clearer expectations and monitoring for timely reimbursement processing, and clarifying roles and responsibilities to support consistent compliance. Contact(s) Responsible for Corrective Action: Director of Sponsored Programs Administration Planned Completion Date for Corrective Action: June 30, 2026.
Federal Program Title: R&D Cluster and TRIO Cluster Assistance Listing Number: R&D and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance Recommendation: We recommend that UEC strengthen its controls over expenditure recognition to ensure costs are recorded in the ...
Federal Program Title: R&D Cluster and TRIO Cluster Assistance Listing Number: R&D and 84.TRIO Type of Finding: • Significant Deficiency in Internal Control over Compliance Recommendation: We recommend that UEC strengthen its controls over expenditure recognition to ensure costs are recorded in the appropriate fiscal period and enhance payroll review procedures to ensure timesheets are submitted and reviewed in a timely manner to support accurate payroll reporting. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: University Enterprises Corporation (UEC), as the entity responsible for fiscal oversight, compliance, and financial reporting for sponsored programs, has initiated and continues to implement enhancements to strengthen internal controls and ensure expenditures are recorded in the appropriate fiscal period. These actions include strengthening period-end review and accrual practices to improve fiscal accuracy, reinforcing expectations for timely payroll documentation and supervisory review through formal communication and standardized procedures, clarifying roles and responsibilities across UEC and campus partners to support consistent compliance, enhancing documentation standards and internal review processes, and establishing ongoing monitoring to ensure sustained adherence to federal requirements. These efforts build upon recent communications and procedural updates issued to Deans, Principal Investigators, and campus leadership to reinforce compliance expectations and accountability. Contact(s) Responsible for Corrective Action: UEC Executive Director Planned Completion Date for Corrective Action: In action as of February 2026.
Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that UEC strengthen its reporting procedures to ensure required performance reports a...
Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that UEC strengthen its reporting procedures to ensure required performance reports are reviewed and approved prior to submission and that documentation is retained to support evidence of management review and report submission in accordance with Federal award requirements. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: Sponsored Programs, in coordination with the Office of Academic Research, will implement formal procedures requiring documented review and approval of all performance and annual reports prior to submission. Standardized processes, including approval documentation and retention of supporting records, will be established in accordance with Federal requirements. Roles and responsibilities will be defined, and compliance will be monitored. Targeted training will be provided to ensure staff understand reporting requirements and the updated procedures. Contact(s) Responsible for Corrective Action: Director of Sponsored Programs Planned Completion Date for Corrective Action: June 30, 2026
Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that the UEC strengthen its procurement procedures to ensure suspension and debarment...
Federal Program Title: Higher Education Institutional Aid Assistance Listing Number: 84.031 Type of Finding: • Significant Deficiency in Internal Control over Compliance • Other Matters Recommendation: We recommend that the UEC strengthen its procurement procedures to ensure suspension and debarment verification is consistently performed and documented prior to entering into covered transactions funded with Federal awards. Views of Responsible Officials: There is no disagreement with the audit finding. Action Taken in Response to Finding: University Enterprises Corporation (UEC) maintains an established process requiring suspension and debarment verification prior to contract execution. While procurement activities are coordinated in conjunction with CSUSB Procurement, UEC is responsible for ensuring that required verification procedures are completed and appropriately documented for all federally funded transactions. The instance identified represents a lapse in documentation, not a lack of control. UEC has reinforced expectations to ensure verification is consistently documented within the official project file and has strengthened pre-award review procedures to confirm compliance prior to execution. UEC will continue to monitor adherence to ensure consistent application of established controls. Contact(s) Responsible for Corrective Action: Director of Sponsored Programs Planned Completion Date for Corrective Action: June 30, 2026
Condition: During audit testing of the Sliding Fee Discount Program for the fiscal year ended June 30, 2025, NeoMed Center, Inc. identified deficiencies in the documentation, retention, and supervisory review of patient eligibility determinations. Specifically, patient financial information was upda...
Condition: During audit testing of the Sliding Fee Discount Program for the fiscal year ended June 30, 2025, NeoMed Center, Inc. identified deficiencies in the documentation, retention, and supervisory review of patient eligibility determinations. Specifically, patient financial information was updated in a manner that overwrote prior eligibility evaluations, resulting in the loss of historical eligibility records. In addition, patient files were not consistently closed or retained in accordance with established policies and federal program requirements. These conditions reflected weaknesses in internal controls over eligibility documentation and supervisory oversight, which increased the risk of inconsistent application of the sliding fee scale, noncompliance with HRSA Health Center Program and Ryan White Part C requirements, inaccurate patient billing adjustments, and potential misstatement of patient service revenue. Planned Corrective Action: Management implemented corrective actions to strengthen internal controls over the Sliding Fee Discount Program and ensure sustained compliance with applicable federal requirements. Policies and procedures governing eligibility determinations and sliding fee discount applications were revised to require preservation of historical eligibility records, standardized documentation, and proper file‑closure practices. Clear supervisory review responsibilities were established to ensure eligibility determinations and fee assessments are reviewed for accuracy, completeness, and compliance. Targeted training was provided to staff responsible for patient registration, eligibility determinations, and fee assessments to ensure consistent application of the sliding fee scale and adherence to federal program requirements. In addition, management implemented periodic internal reviews of patient files to verify compliance with documentation, retention, and eligibility reassessment requirements, and to promptly identify and remediate any deficiencies. These corrective actions were designed to enhance internal control effectiveness, support accurate financial reporting, and prevent recurrence of the identified condition. Key internal controls include: • Revised and strengthened Sliding Fee Discount Program policies and procedures. • Implemented controls to preserve historical eligibility determinations and documentation. • Established standardized eligibility documentation and file‑closure processes. • Defined supervisory review responsibilities and escalation procedures. • Provided targeted training to eligibility and registration staff. • Implemented periodic internal reviews of patient files to ensure compliance. Monitoring: Management will conduct periodic supervisory reviews of patient eligibility determinations and sliding fee discount applications beginning April 1st, 2026, to ensure compliance with established policies and federal program requirements. Monitoring will include sample testing of patient files to verify proper documentation, preservation of historical eligibility records, and timely reassessments. Results of monitoring activities will be documented and reviewed by management, and corrective actions will be implemented as needed to address any deficiencies identified. Responsible Official: Jose A. Guzman Machuca Time frame: This condition was resolved in March 2026 upon the implementation of revised policies, enhanced documentation controls, staff training, and supervisory review procedures
Condition: For the fiscal year ended June 30, 2025, NeoMed Center, Inc. earned interest on federal funds more than the $500 annual amount permitted under 2 CFR §200.305(b)(12). The excess interest was not remitted timely to the U.S. Department of Health and Human Services (HHS) through the Payment M...
Condition: For the fiscal year ended June 30, 2025, NeoMed Center, Inc. earned interest on federal funds more than the $500 annual amount permitted under 2 CFR §200.305(b)(12). The excess interest was not remitted timely to the U.S. Department of Health and Human Services (HHS) through the Payment Management System (PMS). This condition resulted from the lack of a formalized control process to periodically monitor interest earned on federal cash balances and to identify when the allowable annual retention threshold had been exceeded. Planned Corrective Action: Management implemented formal written policies and procedures governing the monitoring of interest earned on federal funds in accordance with Uniform Guidance requirements. These procedures require periodic calculation, documentation, and supervisory review of interest earned on federal cash balances to ensure compliance with the $500 annual allowable retention limit. Any interest earned more than the allowable threshold is identified promptly and remitted timely to HHS through the Payment Management System (PMS). Targeted training was provided to finance personnel responsible for cash management activities to ensure proper understanding and consistent application of federal interest requirements. Key internal controls include: • Implemented formal written policies and procedures for monitoring interest earned on federal funds. • Established monthly review of interest balances. • Implemented timely remittance procedures for excess interest through PMS. • Provided targeted training to finance staff on federal cash management and interest requirements. Monitoring: Management will monitor interest earned on federal funds monthly beginning April 1st, 2026, to ensure compliance with the $500 annual allowable retention threshold. Interest calculations will be reviewed and documented, and any excess interest identified will be remitted timely to the Payment Management System (PMS). Monitoring activities will be evidenced through reconciliations and management review documentation, which will be maintained for audit purposes. Responsible Official: Jose A. Guzman Machuca Time frame: This condition was resolved in March 17th ,2026 upon the implementation of formal monitoring procedures and remittance controls.
Condition: During the fiscal year ended June 30, 2025, NeoMed Center, Inc. used the advance payment method through the HHS Payment Management System (PMS) to obtain federal funds. In certain instances, drawdowns were requested based on aggregated projections and liquidity needs before specific eligi...
Condition: During the fiscal year ended June 30, 2025, NeoMed Center, Inc. used the advance payment method through the HHS Payment Management System (PMS) to obtain federal funds. In certain instances, drawdowns were requested based on aggregated projections and liquidity needs before specific eligible expenses were fully identified and ready for immediate disbursement. Although the funds were later applied to eligible expenses incurred within the authorized award periods, the absence of a documented, expense-level linkage at the time of each drawdown created a temporary timing difference between cash receipt and expense recognition. Accordingly, funds that did not meet revenue recognition criteria at the end were recorded as Unearned Revenue. Consistent with U.S. GAAP and federal grant revenue recognition policies, the Unearned Revenue balance of approximately $1.8 million as of June 30, 2025, represents federal funds received in advance, for which revenue recognition was contingent on incurring future eligible expenses. This balance was analyzed, reconciled, and recognized as eligible expenses were incurred, as supported by reconciliations provided to the external auditors, and was appropriately disclosed in the notes to the financial statements for the years ended June 30, 2025, and 2024. Planned Corrective Action: To prevent recurrence, NeoMed Center, Inc. adopted and implemented “Federal Fund Drawdown via HHS Payment Management System (PMS)” (Policy No. NMCIP 46), approved by the Board of Directors and effective March 2026. The policy requires drawdowns to be based solely on immediate cash needs, supported by a documented short-term cash forecast, and prohibits requesting funds for expenses not yet incurred or not ready for immediate disbursement. Key internal controls include: • Mandatory preparation of a cash forecast by award prior to each drawdown. • Independent review and approval by the Finance Department prior to submission of drawdown requests in PMS. • Monthly reconciliations between PMS, bank accounts, and the general ledger. • Monitoring of the time elapsed between the receipt of funds and their disbursement, with a maximum internal standard of three (3) business days. • Documentation and formal approval of any exceptions. • Adoption of an internal benchmark of 8.33% per month (1/12 of the annual award) as a control parameter. • Clear definition of segregation of duties; and • Periodic reporting to Senior Management and the CEO. Management concludes that this matter resulted from cash-management timing and not from misuse of federal funds. Monitoring: Management will perform monthly monitoring of federal fund drawdowns beginning April 1st ,2026 to ensure they are limited to immediate cash needs and supported by documented short‑term cash forecasts. Drawdowns will be reconciled monthly to the general ledger, bank statements, and allowable expenditures incurred within the approved period of performance. Any timing variances or exceptions will be reviewed and documented. Monitoring results will be reviewed by senior management to ensure continued compliance with Uniform Guidance requirements. Responsible Official: Jose A. Guzman Machuca Time frame: This condition was identified on February 20, 2026, and is expected to be resolved by May 2026, upon the implementation of formal monitoring procedures and enhanced remittance controls.
Corrective Action Plan Year-end June 30, 2025
Corrective Action Plan Year-end June 30, 2025
The following finding was noted during the audit of Federal programs in accordance with 2 CFR 200.
The following finding was noted during the audit of Federal programs in accordance with 2 CFR 200.
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