Finding Reference #: 2020-001
Description of Finding:
Significant Deficiency in Internal Controls over Compliance.
Identification of the Federal Program: U.S. Department of Health and Human Services; Health Clinic Program Cluster; CFDA 93.224: H80CS24112
Criteria or Specific Requirement: Recipients of federal awards must establish internal controls over reports that are prepared and submitted.
Finding/Condition: Pursuant to the reporting requirement set forth by the Department of Health and Human Services, the Clinic is required to file the quarterly Federal Financial Report (FFR) within 30 days of the end of the quarter and submit the single audit to the Federal Audit Clearinghouse within the sooner of 30 days of the issuance of the audit report or nine months after the end of the Clinic’s fiscal year. During our reporting period, we were unable to determine the submission of the quarterly reports and noted also that the audit was not completed and filed timely.
Corrective Action:
As of September 2024, the agency changed financial management from an employed Chief Financial Officer to a contracted fractional CFO with 10+ years of experience in FQHC financial management, the new CFO is also a Certified Public Accountant. Under the new financial leadership, the clinic has made forward progress in financial reporting and will be filing the 2020 audit by March 31, 2025.
Name of Responsible Person: Caleb Ott, Chief Executive Officer
Projected Completion Date: Completed at time of report.
Cause: A lack of California and FQHC specific financial expertise was a limiting factor in the oversight and management of required financial reporting. Additionally, the accounting software was corrupted and required specialized assistance to rebuild the data files and resolve the reporting issues. Finally, the impacts from COVID-19 and the subsequent complexity in financial management and reporting overwhelmed the existing financial staff and created delays in reporting that compounded year-over-year.