Finding Text
Criteria: Federal regulations require non-federal entities to maintain records that adequately support allowable costs and program activities. Specifically, 2 CFR 200.302 requires financial management systems to provide accurate, current, and complete disclosure of financial results, and 2 CFR 200.403 requires that costs charged to federal awards be allowable, reasonable, and adequately documented. HRSA program requirements further require health centers to maintain patient-level documentation to support reported encounters and costs. Condition: During audit testing of patient eligibility and sliding fee scale application, supporting documentation of income was not available for 25 of 40 patients sampled. As a result, the health center was unable to demonstrate that the sliding fee discounts were appropriately determined in accordance with program requirements. Cause: Per HRSA and UDS requirements, FQHC’s must determine patient eligibility for the sliding fee discount based on income and family size, and retain documentation to support income verification for each patient applying for the discount. Effect: As a result, the health center is in noncompliance with HRSA sliding fee discount program requirements, which represents a material weakness in internal control over compliance and results in an increased risk that patients received sliding fee discounts for which they were not eligible or that eligible patients were improperly classified, and that Uniform Data System (UDS) data related to patient income levels and sliding fee discount utilization may be materially misstated. Questioned Costs: Questioned costs could not be determined due to the lack of supporting documentation for the affected patients. Recommendation: We recommend that management reinforce policies requiring documentation of income and family size before applying sliding fee discounts, implement periodic review of patient files to ensure compliance, provide staff training, and accountability measures for intake procedures, and consider adding monitoring on a quarterly basis to ensure ongoing adherence.