Finding Text
Finding 2025-001 – N: Special Tests and Provisions Information on the Federal Program: Grantor: United States Department of Health and Human Services Program Name: Health Center Program Cluster Assistance Listing Numbers: 93.224 – Health Center Program; 93.527 – Grants for New and Expanded Services under the Health Center Program Criteria or Specific Requirement: Title 2 U.S. Code of Federal Regulations (CFR), Part 200.303 of the Uniform Guidance states the following regarding internal control, “The non-Federal entity must: (a) Establish and maintain effective internal control over the Federal award that provides reasonable assurance that the non-Federal entity is managing the Federal award in compliance with Federal statutes, regulations, and the terms and conditions of the Federal award. These internal controls should be in compliance with guidance in “Standards for Internal Control in the Federal Government” issued by the Comptroller General of the United States or the “Internal Control Integrated Framework”, issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).” Per 42 CFR sections 51c.303(e), (f), and (g) and 42 CFR sections 56.303(e), (f), and (g), health centers must prepare and apply a sliding fee discount schedule (SFDS) so that the amounts owed for health center services by eligible patients are adjusted (discounted) based on the patient’s ability to pay as defined by these subsections. Condition: Montefiore Health System, Inc. (the Health System) was unable to demonstrate that internal controls were operating effectively throughout the audit period to ensure the proper application of its sliding fee discount schedule (SFDS). During testing, three patients were charged self-pay balances when, based on the applicable sliding fee discount schedule, those charges should have been discounted. The exceptions occurred prior to the implementation of corrective actions associated with the prior-year finding. Management implemented enhanced controls effective October 1, 2025; however, the identified exceptions demonstrate that controls were not operating effectively during a portion of the audit period. Cause: Corrective actions associated with the prior-year finding were not fully implemented until October 1, 2025. As a result, controls designed to ensure the consistent and accurate application of the sliding fee discount schedule were not operating effectively during a portion of the audit period, resulting in instances where eligible patients were assessed self-pay balances that should have been discounted. Effect or Potential Effect: As a result of the control deficiency, eligible patients were charged self-pay balances that exceeded amounts permitted under the Health System's sliding fee discount schedule. Although the exceptions identified were limited to transactions occurring prior to the implementation of corrective actions effective October 1, 2025, failure to effectively apply the SFDS could result in eligible patients being charged incorrect amounts and increase the risk of noncompliance with Federal program requirements. Questioned Costs: None noted. Amounts charged to patients do not impact expenditures reported on the Schedule of Expenditures of Federal Awards (SEFA); therefore, no questioned costs were identified. Context: We tested 60 compliance samples from a population of 31,357 transactions for compliance with the Health Center Program Cluster special test and provision related to sliding fee discount schedule requirements. Three exceptions were identified in which patients were charged self-pay balances that should have been reduced based on the applicable sliding fee discount schedule. All three exceptions occurred during the first nine months of the audit period, prior to management's implementation of corrective actions effective October 1, 2025. Identification as a repeat finding: Repeat Finding 2024-001 Recommendation: We recommend management continue to monitor the effectiveness of the corrective actions implemented on October 1, 2025 and ensure controls operate consistently to verify that sliding fee discount determinations are supported, documented, and applied accurately in accordance with Federal requirements and organizational policy. View of responsible officials: Management concurs with the audit finding and will continue to monitor the effectiveness of the corrective actions implemented October 1, 2025. The total of noted exceptions was determined to be de minimis (less than $50). Standardized procedures have been implemented to strengthen patient screening and enrollment, including controls to ensure the timely collection and documentation of income and family size.