Finding 2025-002: Reporting – Material Weakness and Scope Limitation Federal Program: Health Center Program (Assistance Listing 93.224) Criteria: Pursuant to 2 CFR 200.303, the Organization is required to establish and maintain effective internal control over federal awards to provide reasonable assurance that the award is managed in compliance with federal statutes, regulations, and the terms and conditions of the award. In addition, the Uniform Data System (UDS) submitted to the Health Resources and Services Administration (HRSA) should be supported by underlying records and documentation sufficient to demonstrate the accuracy and completeness of the information reported. Condition: During testing of the UDS Universal Report, the auditors selected key data elements for testing to determine whether the reported amounts were supported by underlying documentation. The Organization was able to provide support for Table 9E, Line 1g and Table 9E, Line 1q. However, sufficient supporting documentation, reconciliations, reports, or other evidence was not available to support the remaining key data elements selected for testing. As a result, the auditors were unable to determine whether the reported information was complete and accurate. Cause: The Organization did not maintain adequate documentation and reconciliation procedures to support all data reported within the UDS Universal Report. Effect: The lack of supporting documentation increases the risk that errors, omissions, or inaccurate information submitted to HRSA may not be detected and corrected in a timely manner. Additionally, the auditors were unable to obtain sufficient appropriate audit evidence to determine whether certain reported UDS data elements were accurate and in compliance with reporting requirements. Questioned Costs: None. Context: Of the key data elements selected for testing, only two line items, Table 9E, Line 1g and Table 9E, Line 1q, were successfully reconciled to supporting documentation. The remaining key data elements could not be verified due to insufficient supporting documentation. Repeat Finding: This is not a repeat finding. Recommendation: Management should establish and implement procedures to ensure that all information reported within the UDS Universal Report is supported by detailed documentation and reconciled to underlying source records prior to submission. Supporting documentation and reconciliations should be retained and readily available for review. Management Response: Management concurs with the finding. The Organization recognizes that documentation and reconciliation procedures supporting the Uniform Data System (UDS) submission were not sufficient to demonstrate the accuracy and completeness of all reported data elements. During 2026, management will implement formal procedures requiring each UDS reporting element to be supported by documented source data, reconciled to underlying records, and independently reviewed prior to submission. These procedures will include a pre-submission review checklist and internal timeline so that all reconciliations and supporting documentation are completed and reviewed in advance of the UDS reporting deadline. Responsibility for preparation, review, and approval of UDS reporting will be formally assigned and documented. To strengthen this review, management plans to hire additional senior management personnel, including an Accounting Manager, to support the Accounting Department and oversee reconciliation of the UDS financial tables (Tables 8A, 9D, and 9E) to the general ledger and audited financial statements. In addition, management plans to hire a Director of Risk and Compliance, who will be responsible for overseeing the Organization's compliance with HRSA Health Center Program requirements, including the UDS reporting process. The Director of Risk and Compliance will perform an independent review of the completed UDS submission prior to certification, verifying that each reported data element is supported by documented source data and reconciliations, and will periodically monitor adherence to the procedures described in this response, with results reported to the Chief Executive Officer (CEO) and the Board of Directors. Any discrepancies identified before or after submission will be documented, investigated, and corrected in a timely manner, including through the HRSA UDS review and revision process where applicable. Management will also provide additional training to all staff involved in collecting, preparing, and reviewing UDS data, covering HRSA UDS reporting requirements, data definitions, and documentation standards. In addition, management will establish document retention procedures to ensure all supporting schedules, reconciliations, and reports are maintained in a centralized location and readily available for future review. New policies requiring timely account reconciliations and the retention of supporting records will be monitored and reviewed regularly by the Chief Financial Officer (CFO) to ensure they are consistently followed.