Finding 6842 (2022-003)

FINDING NO. 2022-003: Ineffective Internal Controls over Sliding Fee Revenues Federal Program Name Health Center Program Project NO. H80CS00680-21-00, H80CS00680-20-03 CFDA # 93.224 Federal Agency Department of Health and Human Services Criteria/Specific Requirement: The Organization is responsible for establishing and maintaining an internal control system over sliding fee and clinic service eligibility requirements. Specifically, 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 follows: • Sliding fee discounts are applied to fees for health center services provided to all individuals and families with annual incomes at or below 200 percent of the Federal Poverty Guidelines (FPG); • A full discount is applied to fees for health center services provided to individuals and families with annual incomes at or below 100 percent of the FPG, or the health center applies only a nominal charge; • Fees for health center services are discounted based on graduations in family size and income for individuals and families with incomes above 100 and at or below 200 percent of the FPG; and • No sliding fee discount is applied to fees for health center services provided to individuals and families within 200 percent or more of the FPG. Condition: During the compliance testing of the Uniform Guidance “Special Tests and Provisions – Sliding Fee Applications” requirements, we noted the following exceptions: • Three (3) out of thirty-four (34) were missing applications. • Fourteen (14) out of thirty-four (34) sliding fee adjustments were calculated incorrectly based on the sliding fee schedule. • One (1) out of thirty-four (34) sliding fee adjustments were not properly applied to the patient’s account. Questioned Costs: N/A Context: Exceptions were noted in 18 of the 34 sliding fee patients tested. Effect: Lack of effective internal control procedures could result in unintentional or intentional errors that may not be detected in a timely manner by employees in the normal course of performing their assigned duties. Cause: Lack of oversight and lack of training over sliding fee applications and calculations. Recommendation: Management should take steps to ensure procedures over sliding fee applications are properly designed and operating effectively. Management’s Response: Management agrees with the finding.