Finding Text
Finding Type: Internal Control Over Compliance – Other Information on the Federal Programs: Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.224 and 93.527 Federal Program Name: Health Center Program Federal Award Periods: May 1, 2023 – April 30, 2024 May 1, 2024 – April 30, 2025 Federal Awards: 22H80CS08230, 23H8LCS51011C6, 23H8GCS48313 Federal Agency: U.S. Department of Health and Human Services Assistance Listing Number: 93.526 Federal Program Name: Grants for Capital Development in Health Center Federal Award Periods: September 15, 2021 – September 14, 2024 Federal Awards: C8ECS43699 Criteria: Under Federal regulations, non-Federal entities must maintain financial management systems and internal control processes that provide accurate, current, and complete disclosure of the financial results of federally funded activities. Condition: Northeast Washington County Community Health, Inc. implemented a new patient billing system during fiscal year 2024. Following implementation, management experienced significant difficulties reconciling patient accounts receivable, third-party payer revenues, contractual adjustments, and cash collections. As a result, Northeast Washington County Community Health, Inc. was unable to produce complete and auditable accounting records and financial statements until approximately two years after fiscal end. Cause and Effect: Northeast Washington County Community Health, Inc. had significant turnover in several key positions during the system conversion which led to capacity restraints that did not allow for adequate and timely testing, monitoring, or validating of the financial reporting impacts of the billing system conversion. The result of these delays led to the following: - Financial information was not available on a timely basis for management oversight. - The risk of material misstatement due to error or fraud increased. - Significant effort was required to reconstruct accounting records. - Financial reporting related to Federal awards may not have been complete, accurate, or timely. - Audit completion was substantially delayed. Recommendation: Management should create formal cross training opportunities that allow for continuous and accurate financial management processes in the event of turnover and capacity restraints.