Finding 2024-002 Material Weakness in Internal Control Over Reporting Assistance Listing Numbers 93.224 Health Center Program 93.527 Affordable Care Act (ACA) for New and Expanded Services Under the Health Center Program Federal Agency U.S. Department of Health and Human Services, Health Resources and Services Administration Passthrough Agency N/A Award Number/Year 2024 Criteria FFHC is responsible for preparing and submitting its annual Universal Report and Federal Financial Reports in a timely manner. Views of Responsible Officials and Planned Corrective Actions Friend Family Health Center Inc. and Affiliates (Organization) will implement the following corrective actions for the fiscal year ending June 30, 2024 to remediate the finding and address the cause of the finding. The Organization will implement the following corrective actions for fiscal year 2024 to remediate the finding and address the cause of the finding. The Organization has hired staff with higher technical accounting skills than the previous staff. The following staff have been hired full-time or will be hired soon: Payroll and Benefits Specialist, Grant Accountant, Senior Staff Accountant, Accounts Payables and Receivables Specialist, and a Purchasing Specialist.• The Organization has implemented a new accounting system – Sage Intacct. Additionally, we have implemented a grants project tracking module to better help with grants and contracts reporting and compliance. • All grant related year-end audit procedures have been transitioned to the Grant Accountant who has experience with financial audits and compliance and reporting for City, State, and Federal grants. • The Organization will ensure that Finance personnel receive a minimum of twenty-five (25) hours of training annually of relevant accounting topics including updates to generally accepted accounting principles, generally accepted government accounting principles, nonprofit and governmental financial reporting, and other related accounting trainings. • The Organization will ensure that any personnel involved in financial reporting have the technical expertise to help with the preparation, review, and analysis of the Federal Financial Reports and the Universal Report. The target date for full implementation of these corrective actions is December 30, 2025. The responsible party for the planned resources will be Wendy Thompson, Chief Executive Officer (312) 682-6110. Our address is 340 E. 51st St., Chicago, IL 60615. • The Chief Financial Officer (CFO) will be responsible for the implementation of the corrective action plan and will oversee all related finance activities. • To ensure timely submission of Federal Financial Reports (FFR) to HRSA, Friend Health will implement a robust internal calendar that includes all HRSA reporting deadlines along with earlier internal due dates for preparation and review. Designated financial and grants management staff will be responsible for compiling and verifying the required data well in advance of the submission deadline. Friend Health will conduct regular internal reviews to ensure accuracy, completeness, and compliance with HRSA guidelines. Additionally, staff will be provided with ongoing training on HRSA reporting requirements and utilizing reporting tools or software that streamline the FFR preparation process. These proactive measures will help maintain compliance and prevent future delays. • The Organization will document accounting policies and procedures to reflect the new month-end processes and provide training to staff on current and future policies.